If you are thinking about starting a business and need a car to operate the business, then we have compiled some of the key things you have to do to save money when buying a car for business.
Entrepreneurship is alive and well in Canada. If you are a business owner or thinking about starting a business but need a car, then you are in the right spot. We have done the necessary legwork to help you make the right decision when you buy a car for your business.
New Business Vs. Established
When you buy a car for your business, prospective lenders want to assess the risk and determine how likely you are to repay the loan as promised.
Most new businesses fail within the first 5 years. Since new businesses have such a bad track record, the lender will want you to provide some personal guarantees.
These guarantees can be in the form of a down payment, collateral, or a co-signer who will take responsibility for the loan should you default.
Since applying for a business loan to buy a car, tends to be difficult. What you should do is apply as a retail borrower, you can do this if you are self-employed and running your business as a sole proprietor.
Finding The Right Lender
Many lenders offer auto loans but you do not have the time nor resources to screen them all. To save time and money, buying a car for business from a local well-established car dealership is a great idea.
The dealership has a huge network of lenders they work with regularly. Since the dealership has an existing relationship, they can negotiate a better deal than if you tried reaching out to these lenders on your own.
With interest rates at record lows, you will be able to get a competitive rate but you need to have the necessary credit to qualify.
To qualify for prime auto loans in Canada, the minimum score is 680 but preferably 720. If your credit score is above 650, the dealership is still able to help.
If you are not sure whether you qualify, you could check your credit score on Credit Karma or ask the dealership for help. The dealership is eager to help you qualify for a loan and will do everything they can to advise you on what steps must be taken.
Picking The Right Car for Your Business
When the dealership has secured approval, it will indicate what is the maximum approved loan. You can then look at the different vehicles in the inventory to find the one best suited for your needs.
Some carmakers are offering no payments for 90 days. This is a fantastic offer when buying a car for business. Those 90 days give you a chance to generate some cash flow. There are special conditions you must meet to get the 90 days no-payment promotion, so be sure to ask your dealership for details.
The Canadian economy is poised for a massive recovery and your business can benefit from this opportunity provided you get the new car you need. Contact your local dealership and find out what options are available before the window of opportunity closes.
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!