If you are looking to apply for a car loan, it is very important to do some research before you begin the process. Not only do you want to spend a good amount of time identifying the car you want to buy, but you must also put in some thought into how you are going to get a competitive auto loan. With so many lenders offering these loans in Canada, customers are often overwhelmed with the choices on the table. Making the right decision is crucial, because you do not want to find yourself saddled with a high interest or unfavorable auto loan. Here are some tips on how to get the best deal on an auto loan:
- Credit Score
When you are looking for Toronto used car financing, it is very important to have some idea about your credit score. Even though most lenders and lender-matching sites are going to request a credit check before they provide you with any offers, you should research your credit score independently. Having a good sense of your credit score will help you during discussions with car dealerships and lenders, especially if they attempt to dupe you into thinking your credit score is worse than it really is.
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- Shop Around
One of the best things about applying for car loans online is the fact that you can shop around until you find the deal that best suits your interests. By using websites that match lenders with car buyers, you can get anywhere from 5 to 20 very good loan offers in your inbox within one or two days. Then you can take your time to assess each of these offers before you make a final decision. Carefully look at the loan term, interest rate and any other relevant conditions in the contract before you commit to an offer.
- Bad Credit is NOT a Deal Breaker
Many people think bad credit auto loans are not a viable option for them, but they are mistaken. Many lenders in Canada now offer loans to individuals who have inferior credit, especially if the individual can demonstrate they earn a substantial salary each month. As long as you meet the lender’s monthly income standards, they will make you an offer for an auto loan. But the higher APR associated with bad credit auto loans does mean the transaction may cost you more money in the long-run.
- Consider the Overall Sum, Not the Monthly Payment
Many lenders and car dealerships entice customers into picking their loan or vehicle by touting the monthly cost associated with the contract. They will say “you are only going to have to pay X amount of money per month.” But how many months are involved in these contracts? Most times you hear an enticing monthly offer from a dealer or lender, it means the loan term is anywhere from 60 to 72 months. Avoid such a pitfall by focusing on the total price you will have to pay for the car, inclusive of the APR on the auto loan.