Tips to follow when trying to save money on a new car

Posted by on Aug 18, 2022 - Archived under Bad Credit Car Loan Tips

If you are in the market for a new or used car, these tips are going to help you save money both over the short and long term.

The fact is that in Canada, you need a car if you want to live a normal life; there is no way around it.

While public transit is a noble idea, we are decades away from having a viable option in major areas like the GTA and Montreal, but most Canadians don’t live in those areas.

Having a long-term mindset

When buying a car, you need to think long-term, especially since the average car loan is just under 60 months; you are going to have this vehicle for quite some time, so you need to make sure it meets your current and future needs.

If you have a young, growing family, then the vehicle you select must be reliable so consider getting a car from a company like Ford, which has been around for the better part of a century.

The changing auto finance marketplace

The auto finance marketplace in Canada has dramatically changed since the onset of the Covid-19 pandemic.

In the past, your car financing options were limited to your local bank or credit union, but that is no longer the case; you now have a large number of lenders vying for your business, but we will explain how to lock in a great car loan in a bit.

How to give yourself a fighting chance when trying to secure a car loan in Canada

You must take a closer look at your credit score to see whether you meet the current loan underwriting requirements by most mainstream lenders.

The minimum credit score needed for a prime car loan in Canada is 680, this requirement can change from lender to lender, but if your score is in that range, you will qualify for the most competitive interest rates in the current market.

Notice we mentioned the “current market”, as the Bank of Canada increases the prime lending rate; you are going to pay more interest even though your credit score is high.

The credit score is just one element; something else you will need to focus on is your income.

Lenders will also want to know if your income is sufficient and stable enough to qualify for the loan. If you are working a traditional 9-5 job, then you should be on the job for a least six months and ideally a year or more.

Self-employed borrowers face additional underwriting requirements; they usually need two years’ worth of income tax assessments and bank statements before lenders will consider their application.

Finding the best deal on a car loan in Canada

We mentioned earlier you have a vast array of potential lenders you could do business with, but you should never try to negotiate with these lenders on your own.

What you should so contact your local car dealership and enlist their help. The local car dealership will review all of your particulars and negotiate the most competitive deal possible on your behalf.

If you are serious about buying a new car, then this is the best path to take, so contact your local dealership now.

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!

Let’s get in touch! 

Dixie Auto Loans