Most folks aren’t able to buy a car in cash and so they need to take out a loan. When it comes to explaining car loans, it’s important to understand what things can influence customers’ monthly payments. This is because how much someone pays is determined by three main factors: the down payment, the interest rate and the loan term.
What do those terms mean? The down payment is the amount a customer pays toward the total cost of a car. The more money someone can put down, the less money they will have to borrow. However, customers don’t always need to have a down payment to walk away with a pair of keys in their hands at the end of the day. A zero down payment means that the principal of the loan covers the full cost of the vehicle.
The interest rate is how much someone pays to borrow the money. Making payments on car loans each month means the customer is paying back the interest on the loan along with the overall balance of the loan. The loan term is how long a borrower has to pay back the money. Loan terms can range from as short as one year to six years or more.
The interest rate offered to a customer depends on a several factors. One factor is the customer’s credit score. This number is based on things like paying bills on time and using available credit without maxing it out. Another factor is the length of the loan term. The shorter amount of time borrowers select to pay back the loan, the lower interest rate they are typically offered at our dealership.
Car loans help customers take cars home. We work to make the buying process effortless, including offering on-site financing. By working with several lenders, we can provide competitive loan rates. This makes buying a car a simple one-stop shopping experience.
When you have a poor credit history, you can expect to pay a higher interest rate when you purchase a new or used car. However, knowing that you’ll be paying higher interest doesn’t mean that you have to settle for the worst payment/interest combination. Consider the following tactics for saving money when you obtain bad credit car loans.
Get the Shortest-Term Loan You Can
Shorter loans typically have lower interest rates than longer-term loans. However, you do need to be realistic about the monthly payments you can afford and don’t forget to factor in auto insurance, gasoline, and maintenance. If you must have a long-term loan now, ask about prepayment penalties. You may be able to shorten the length of the loan if circumstances improve over time.
Skip the Expensive Features
You don’t need a sunroof and you can probably get by without paint protection. All of the little add-ons offered by the salesmen will quickly add up and, when you consider interest, even a smaller addition to the main price will become very expensive in the end.
Do Not Take Out Other Loans
It is very common for many people to get excited about the idea of the new job that makes the purchase of a car possible. With the promise of extra spending money, those people may head out and open up accounts at shopping centers. Remember that each credit inquiry will affect your credit score and every open account will also damage your score. When you need to buy a vehicle and you’re already working with a loan for people with bad credit, you can’t afford the extra hits to your score.
Ultimately, you can benefit from the existence of bad credit loans. Just be sure that you are aware of your options and the steps you must take to save money on those loans. Work to improve your credit score and be prepared to work for the best possible circumstances.
If you have had experience with buying a car, you likely know it is a good idea to arrange financing before beginning your search for the perfect vehicle. One of the best places to look for car loans is at the financial institution you already use to do your banking. By prequalifying for a loan, you will have a better idea of what your budget is and the ability to make a responsible decision.
Besides giving you a firm budget, prequalifying for car loans also gives you some bargaining power. As a dealership, we work with several different lending institutions in order to best serve our customers and get them the best rates possible. When you show up on the lot with prearranged financing, it gives our salesman a challenge. Their goal is to see if they can find a deal on a loan that will beat what you have already found.
Quite often, our lending institutions are willing to give a slightly lower interest rate on a new loan in order to get a new customer. Your hard work will pay off when you get a lower rate than you thought you could. If our dealership is unable to find you a lower rate, you will know for certain you’ve found the best rate available.
When comparing different loans, whether offered by your lending institution or the dealership, make sure you are comparing all of the features. For example, don’t just compare monthly payments. If one loan is for 24 months and another for 36 months, the second loan may have lower payments, but you will be making payments for an entire year longer. At the end of the loan you will likely pay more for the 36 month loan than the 24 month loan.
Spending some time doing a little research before beginning your car shopping can save you a lot of time and money. By being prepared, you can rest assured that you found the best car loans available.
There are auto dealerships in various territories and provinces offering car loans, even if you have less than perfect credit. The loan approval process may seem daunting. There are common pitfalls you can avoid that make obtaining auto financing a lot easier.
- Not Knowing Your Credit History
Your credit history plays an important role in the loan application process. For example, your credit affects the interest rate. Generally, the higher the credit score, the lower interest. Get copies of your report from credit bureaus. Identify and correct inaccurate information. Sometimes making these changes can boost your credit rating.
- Not Knowing the Total Cost
Many car buyers only focus on keeping the monthly car payments low. That’s fine, but there are other factors that determine what you can afford. Always include costs such as taxes, maintenance, gas and insurance.
- Not Test Driving Cars
Take cars for a test drive. Think about how and where you drive on a daily basis. Drive the automobile the same way you normally do. Take your time with this process. Don’t rush back to the dealership. Pay close attention to how the vehicles handles.
- Not Reading the Fine Print
It’s not a good idea to sign a loan agreement without reading the terms and conditions. Make sure you understand everything before signing on the dotted line. As a rule of thumb, shop around for the best auto loan.
- Not Having the Necessary Paperwork
There are several documents you need when you apply for a car loan. The most common requirements are proof of insurance, pay stubs and driver’s license. If you don’t bring the right paperwork to the dealership, it can delay your approval.
There are reputable auto dealerships in Canada that finance car loans for consumers who have bad or no credit. By avoiding the above mistakes, you increase your chances of getting the quality vehicle you need.
The price of today’s vehicles is more than what most Canadians can save without years of effort. Because it’s usually not feasible to wait for years to get a new vehicle, many of them depend on car loans. Securing a loan clearly offers welcome peace of mind because it allows people to pay for their vehicles over time. It also gives them more choices while shopping for the vehicles of their dreams.
Car Loans Set Realistic Parameters
Whereas some potential car buyers go through the loan process after picking out specific cars, others see what kind of financing approval is possible for their situations and then use that information to guide purchasing decisions.
Maybe you’re in the market for a family car. On the other hand, perhaps you want a sporty option that’s the envy of all your friends. Whatever the case, a car loan gives you an idea of which vehicles are within your price range and won’t disrupt your budget.
Use Your Loan to Open Up More Possibilities
Perhaps you have cash in hand for a car but know the amount isn’t going to result in a car that meets your minimum expectations. Instead of just settling for a vehicle that falls far short of your needs, you can apply for a loan and see if that financing option makes it possible to buy a much more modern vehicle with all or most of the features you love.
Car loans let people work out ways of paying for vehicles over time and thereby affording options that are more luxurious, newer or both. Financing is also ideal if you are a very responsible person and know you’ll have no trouble making periodic payments, but just can’t afford the entire up-front cost of your new ride.
Make our dealership the first and only stop for information about car loans. After meeting with us, you’ll see that financing could make it possible to buy a vehicle that’s otherwise out of the question.
I am often asked why our dealership approves bad credit car loans. Or rather, why we help buyers with questionable credit get a decent auto loan. There are good reasons why we do this, and I’m happy to share those with you. If you are one of those bad credit buyers, maybe this will give you shopping confidence.
- Not Every Credit Score – or Buyer – is The Same
Two buyers might show up at our dealership with the same credit score. Though they share the same number, I know the reasons why each buyer’s credit score is what it is could be very different. One buyer might be habitually delinquent on payments. The other may have gone through a short-lived financial crisis that he is working his way out of. This bit of information is sometimes enough to secure a loan.
- An Auto Loan is a Safe Bet for a Lender
I’m probably giving away a secret when I tell you that auto loans are generally a safe investment. It is true that if a borrower falls too far behind on his payments, the car can be reclaimed. But that’s not why many dealers want to approve bad credit car loans. In most cases, borrowers will pay back their loan in full. More importantly, if that borrower has a good experience at our dealership, he will recommend his friends and family. That’s the real value.
- We Want to Build a Relationship with You
In most instances, buyers who purchase a new car from us will return over time to purchase another vehicle. Often, those buyers will have worked hard to re-establish their credit and can feel comfortable knowing they can secure a new loan. If we treat that customer right, he may purchase a car for his spouse and his children. We may work together for many years to come.
If you’re looking to finance your next car through our dealership, there are several things you should know about how car loans work. We’ve broken the basics into easy to follow sections so you can gain the knowledge you need to get the best deal on your loan.
Lowering Your Loan Amount Can Save You Money
There are three factors to look at when you’re searching for a new car loan. The first is your actual loan amount that you receive through your financing company. You can lower the amount you borrow by making a down payment or trading in an older vehicle. This, in turn, will lower your monthly payments because you’ll have less to pay back.
Lowering Your APR Can Save You Cash Too
The next factor in the basics of car loans is your annual percentage rate. This is the interest rate that you negotiate with our dealership. Taking the lowest APR possible will save you money over time by decreasing your monthly payments. Less interest equals less money spent.
Stretching Out Your Payments Can Cost You Money
The last piece of the financing puzzle is your loan term which can be spread out over 3 – 6 years. You’ll end up paying less per month, but because of the time added on to your loan term, you’ll pay much more money in interest than you would if your term was shorter.
Taking a Lower Monthly Payment Can Cost You Extra
As stated above, normally lower monthly payments come with a longer loan period. While you pay less each year, you pay that amount for an additional 1 – 3 years, costing you more money over time. Try not to judge a loan based on monthly payments. Consider paying a bit more to save you additional costs.
Financing car loans with us is easy if you know what to look for. We’re willing to work with you to get you the best rates you can afford. Just keep these basics in mind and negotiate your best terms.
People need to go places to earn an income whether they have good or bad credit. Transportation becomes an issue when someone has bad credit, because people in such a situation have limited options to get around. Sometimes a person does not have a choice other than buying a car, even if it means finding bad credit car loans. There are several ways to make the loan application process more productive. While none of these alone may be the silver bullet that gets a loan approved, altogether these steps represent a positive step towards car ownership.
An essential step towards owning a vehicle with bad credit car loans can be to find a car dealership that will offer assistance. Some dealerships even specialize in helping people with bad credit, though such experience is not necessary but merely helpful. The right dealership can provide more insight into a person’s individual situation. Anyone looking to own a car should investigate the various dealerships and support provided by those professional services if he or she is worried about dealing with the process alone.
Approved in Advance
Another way to find a vehicle with bad credit car loans can be to seek approval in advance. A bank typically reviews several aspects of a loan seeker’s life, including how much a person spends, a person’s credit score and how much a person makes. Then the bank can make a decision about how much a loan seeker can spend on a car, “pre-approving” the loan seeker to match the promised money with the right vehicle.
Credit Score Boost
An important tip to keep in mind is that a credit score should always be increased whenever possible. If someone is looking for bad credit car loans, he or she should also find ways to immediately increase his or her credit score, which may have an impact on a credit decision. Even minor fixes have the potential to help a person majorly.
Anyone looking for bad credit car loans should work with a dealership to find the right financing to get back on the road and back working.
So you need a new car. It may have happened unexpectedly, perhaps your car broke down and you could buy a new one with the money it would take to get it fixed. The problem is you don’t have enough money to buy something else without some sort of financing. I can help. I specialize in car loans for everyone. Even if you think you can’t get financed, come talk to me. If you have a steady income, I will most likely be able to help you. I’ve been doing this for many years, so let my experience work for you. Getting any sort of loan can be a scary experience, but I’ll do what I can to put your mind at ease. You’ll walk out of my dealership with a new or used car and even be able to sleep at night, knowing that you haven’t signed your entire life away (I’ll even let you keep your firstborn child) for a car.
I realize that car dealerships (and the salesmen or women that work there) have a long ways to go before they’ll be considered trustworthy. I’m doing what I can to improve that. My customers are everything to me. Any success I have is thanks to all of you. I promise to repay the favor by working as hard as I can to get you in the car you want at a price that you’re comfortable with. If you don’t believe me, please feel free to check online to see the many favorable my customers have. I like to build a relationship with my customers so that they feel they can come back. Believe me, there is no better compliment to my work than seeing a repeat customer, especially when they’re buying a car for a spouse or a newly licensed child. When someone trusts me with the safety of such precious cargo, I never take that lightly.
We know that choosing your next vehicle is an important choice. After all, we spend so much time with our cars that they almost become part of the family. However, when it’s finally time to retire your old vehicle, and begin a journey, we hope you will consider the advantages of buying a used car from a reputable dealership.
Pre-Inspected Used Cars
Unlike private sellers, we offer a far more streamlined way of guiding you through the process of buying your next automobile. First, you have the satisfaction of knowing that the used cars you’ll be looking at have already been inspected by trained experts in the field and provided with any necessary repairs. We take pride in our work and will do everything possible to make sure you leave our dealership with the fullest confidence that your used car is safe and ready to go.
Secondly, if you find the perfect car, but it’s just out of your price range, we can provide options to help you finance your purchase. If you have a vehicle already that you would consider trading in, we will gladly inspect it to see if we can trade-in your older vehicle to cut the costs of buying your next one. Also, at your discretion, we can help you look through a number of car loans so that we can find one that meets your needs.
We want you to have the very best without feeling uncomfortable or overwhelmed by all the paperwork. Let us handle all your paperwork, including title and registration, so that you can quickly get back on the road without having to head to the transportation services of your local province.
We are ready to help you make your next car purchase a smooth and pleasurable experience. Let us be your valuable partner to help guide you through the many choices and benefits that used cars provide. We’ll do our very best to ensure that your experience is a satisfying one that helps you get the car you’ve always wanted. We look forward to seeing you!