Apart from buying a home, one big investment most of us make is when we buy a car. Although you wish that you could pay cash and get over with it, when buying a car, it is sometimes not advisable to do so, especially if you have a cash crunch.
The reality is that most people prefer to get an auto loan to pay for their car, whether it is a used car or a new one. As auto loans attract significant interest over your payment period, you may want to know about all the aspects of the auto loan before accepting one. Prior to buying a car, here are a few critical things that you need to keep in your mind about car loans.
Your credit score
It is no surprise that just like any mortgage or loan, your auto loan is dictated by your credit score. It is one of the single most influential factors in determining what kind of loan you can get and what your interest rate will be. No matter which entity you are going through (bank, auto loan dealer or the dealership themselves), a lot depends on your credit score. It is important to note that not all lenders have the same parameters when deciding your loan. While some look at a basic score, some may require additional information about your financials before approving a loan. If you aren’t sure what your credit score is, you can access a credit report from three main bureaus for free.
It is always a better option to walk into a car dealership with a financing offer from a lender or bank in your hand. Not only does it improve your chances of landing a good deal, but also helps you to cover the cost of the car. There is no denying that pre-approved loan does give you extra leverage to negotiate the best buy price for your vehicle as you are perceived as ‘cash buyer’ since your financials are ready and in place.
Calculate cost before an affirmative answer
It is natural to get hung up on getting your car payment down to a specific amount. However, many critical factors are important before you set your monthly payments. The APR may have a limited effect on the monthly amount. More important factors include your total loan amount, what is your down payment or how much you’re putting down, and the loan term (the repayment time). You can use an auto loan calculator to get a clear idea on these parameters. An in-depth study of these parameters can help you save a lot in the long term.
Financing your vehicle is one of the best ways to get the car of your choice without worrying about an immediate cash crunch. Uncomplicate the process by getting in touch with a financial partner that works with you and helps your unique financial situation to get a profitable deal. With Canada Wide Vehicle Finance, you can be assured of finding the best borrowing option for your car loan. Talk to an advisor today to get a lucrative vehicle loan based on your credit score, preferred down payment and affordable monthly options.