While the focus of this conversation is financing a car in Ontario, these suggestions will work throughout Canada.
What model of vehicle are you interested in?
There are gas-powered cars, hybrids, and EVs; depending on the vehicle, your financing options may differ slightly.
Take EVs, for example; a few years ago, the number of lenders that would finance the purchase of an EV was considerably lower when compared to lenders that finance gas-powered cars.
This was until major carmakers like Ford started to roll out their line of electrified vehicles.
Lenders started to pay closer attention when companies like Ford were getting behind EVs.
While the EV market in Canada is relatively new, it is growing rapidly and will reach critical mass in a few years, especially since the Trudeau Government banned the production of gas-powered cars in 2035.
Whether that will actually happen, only time will tell, but you need to think both short and long term when buying a car.
Deregulation of the auto finance industry
Something that has changed the auto finance industry in Ontario for the better is deregulation.
You are no longer forced to deal with local credit unions and banks; now, you can get a car loan from anywhere in Canada.
These lenders are all competing for a piece of the billion-dollar car finance industry in Canada. If your credit score is high, you can get approved for a car loan with competitive interest rates. The sweet spot for a low-interest rate car loan is 720.
While the interest rate will be competitive, “competitive” is a relative term because interest rates as a whole are going up throughout Canada.
The Bank of Canada is facing mounting pressure to reduce inflation, and the only way it can do that is by raising interest rates.
Even if you have the best credit score in Canada, you are going to end up paying more to finance the purchase of a new car because the prime interest rate that all lenders pay is increasing.
The only effective way you can reduce the total amount of interest you pay is to move fast and secure a car loan. (this is not a pressure tactic, just an economic reality that you must bear in mind)
Where to get the absolute best car loans in Ontario
When looking for the best car loans in Ontario, you may be tempted to go online, but that is not the best option.
The source of the most competitive car loans in Ontario is through a local car dealership.
While, at first, this may seem counterintuitive, the local dealership will have relationships with all of the lenders in Ontario and the rest of Canada.
This access means you are able to get a great car loan and have peace of mind knowing the dealership is going to be there to help you on a going-forward basis.
If you need a car, don’t put off making a buying decision any longer; with each passing day, inflation is driving up the prices of a new car.
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!