Canada Car Loan Before Car Dealerships – Car Financing Application
Car shopping can feel stressful, particularly for those with bad credit or no credit. Applying for a loan before you even set foot into the dealership showroom can save you hassle, time and money. All you need is to set aside a few extra minutes to apply for loans that you may qualify for and select the loan that best fits your lifestyle. Sounds simple, right?
Start off by doing your research, know your credit score and learn about your credit history. With a little preparation and analysis you can drive off the lot in the car of your dreams. Learn how to qualify for auto loans in Virginia!
It may seem enticing to apply for the loan that is outright offered to you at the dealership, however shopping around for an auto loan before you enter the car dealership has major benefits that can save you more money and relieve some of the pressures of car hunting. Pre-approval for a car loan also puts you in control of your financing options, plus you have the luxury of spending time to review your options and select the loan terms that best fit your needs and budget.
Learn about your credit history
The first step in the auto loan process is reviewing your credit history and knowing your credit score.You can check your credit report and score quickly and easily online by visiting Equifax or Transunion. If you have good credit, then you’re likely to qualify for low-interest rates or special promotional offers from lenders. For those with bad credit or no credit, finding a loan at a lower interest rate or shorter term length can seem daunting, but it is not impossible. One out of three of Canadians have bad credit.
Once you have your credit score and history you can calculate the appropriate interest rate that you should pay. Armed with this knowledge, you can match your numbers against the numbers that your lender gives you and select the best loan option that matches your budget and lifestyle. Plus, you are more likely to spot bad credit car loan scams that can cost you more money both upfront and long term.
Shop around for a loan to save more
Regardless of your credit history, reviewing your auto loan options is an important step in securing the great car that you want at reasonable financing terms. You can see your loan options inVirginia by clicking the Apply Now button.
Many buyers will feel pressured to accept a loan that is offered to them by the dealership or by their bank. Shopping around for loans can give you a range of APR options and financing terms so that you can compare rates and select the loan that will cost you less over time.
How to pick the best auto loan
The auto loan marketplace offers buyers a variety of loan options with varying interest rates and term lengths. With so many financing options available it can be difficult to figure out the best financing option for you. Use these tips for selecting the best auto loan for your needs.
Ready to apply? Click here to instantly see your auto loan options!
- Focus on the total cost of a loan
After you’ve been approved, selecting the right loan can make the car purchasing process easier and less expensive. Focus on the annual percentage rate (APR) when comparing loans. A lower APR can save you money across a longer period of time. A common mistake that buyers make is focusing strictly on the monthly car payment amount without necessarily factoring in APR cost along with car price and fees. Think of it like this, a $17,000 car loan at 5% APR would cost you less than a loan of the same length of term at a higher APR of 8%.
- Be vigilant about the term of the loan
Along with APR, the term of the loan can impact the total out of pocket cost that you pay for your car. When buyers focus solely only on monthly payments and not on the total cost of the car, they often do not factor in the APR along with the term of the loan, or the amount of time that it will take to fully pay off the total loan amount. This is a mistake that can cost buyers hundreds or even thousands more for their car. Loans that take longer to pay off accrue more interest, thus you pay more over time even if your monthly payments appear to be smaller. And that doesn’t even take into account that longer loans often have higher interest rates.
Often times buyers have an ideal monthly rate that they hope to pay for a car, and as a result they extend the length of time that they will pay off their loan, in order to pay lower monthly payments. This practice can actually cost you more over the length of time that you pay off a loan, particularly if you only qualify for loans with higher interest rates.
The average car loan term for Canadians is 8 years! And that doesn’t even include gas, insurance, and upkeep. Plus, you may even be in the market for a new car by the time you finish paying your car loan.
Selecting a shorter term means that a buyer will pay higher monthly payments, but will pay less money over time. A good rule of thumb is to try to keep the length of the loan as short as you can afford. This might mean putting more money into a down payment, trading in an older vehicle or even adjusting the scope of vehicles that you are considering purchasing.
- Think about building equity
One last concern with long-term loans is that they lengthen the time before your payments begin building equity in the vehicle. It can take months of payments before you build equity into a car, which means that a car is worth more than you owe on it. This will impact you if you want to trade the car in or sell the car, as the amount you owe won’t be covered by the price of the car, a situation called being “upside down.” If the car were stolen or destroyed, your insurance payment also may not cover the entire cost of the loan, another example of being “upside down.”
A great way to keep from being upside down is to make a significant down payment. A trade-in or down payment of at least 15% of the total cost of the car will give you a good foundation to build equity on top of. Think you’re ready to apply? Click here.
How to apply for loans/ Where to shop for a bad credit auto loan
New Car Canada offers buyers a FREE, easy to use tool for simple car loan approval. This is a single stop to review financing options, see available cars and find cars near you. Simply tell us the car you want and in a few simple steps we present you with financing options and connect you with a network of local dealers. Click here to get started!
Get a quote for the vehicle you want with no obligation to buy. Bad credit is okay! Fill out the application, see available cars and click to get approved. You only need to meet three criteria for approval and YOU can finance the car that you want up to $50,000 inVirginia.
Think your credit history has doomed you from qualifying for the car you want? You can apply to be accepted for an auto loan if you meet just three simple criteria:
- You possess a valid driver’s license
- Are able to obtain car insurance
- Make at least $1,800 per month in income
If you meet these three criteria for acceptance, you can drive away in the car of your dreams!
Financing a car can be quick and easy with the right preparation! Make sure that you do your homework and search for the best company that can help you with your auto loan. Consider all your options and don’t decide too easily. Do a shortlist and find out which offer is best for you, your current situation, and your financial status. It is always wise to weight your option and see for yourself which offer works best. Ask questions and don’t be afraid to do so. You can prevent unwanted issues if you ensure that all your questions were addressed before you confirmed your application.
You can find and finance the car you want in Virginia.
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