Getting the Best Car Financing Deal
When you’re shopping for a car, you always want to set yourself up to get the best car financing deal possible. Getting a great deal means getting a car that you love at a payment you can afford. While everyone wants this, so many Canadians end up settling for less and buying a car they don’t love and paying more than they can afford. We wrote this article to help Canadians learn about tips and tricks to get the best deals on car financing.
Trick 1: Know Your Credit Score
Your credit score will be one of the most significant factors in determining whether or not you get good financing terms. Therefore, it’s important that you know your credit score so you have a better idea of the interest rate you’ll end up having to pay on your loan. If you want to find out your credit score for free, Borrowell offers a free credit score tool. The better your credit, the less you’ll have to pay in interest, so if you think you can wait 6 months to buy a car in order to improve your credit score, this may be worth considering.
Trick 2: Use a Car Loan Calculator
Now that you know your credit score and have a better idea of the interest rate you’ll likely have to pay, it’s time to figure out what you can afford. One of the best ways to do this is to use a car loan calculator. With a car loan calculator, you can fill out basic information like how much of a down payment you want to put down, the trade-in value of your car, the estimated interest rate, the cost of the car and the length of your term. Once you’ve plugged in this information you’ll be able to see what your payments will look like whether that be monthly, bi-weekly or weekly.
Trick 3: Down Payments and Term Lengths
While the car loan calculator should have helped you get an estimate of what you can afford, you need to decide on a down payment and term length. For down payments on a car, most experts suggest you put 20% of the car’s price as a down payment. Not only will a down payment make your monthly payments smaller, but it can also reduce your interest rate as lenders will be having to loan you less money, making it less of a financial risk for them. Secondly, for your term length, you want to keep it as short as possible without making your monthly payments unmanageable. The shorter your term, the quicker it’ll be until the car is yours. A shorter-term car loan also means paying less interest which could save you thousands of dollars.
Trick 4: Get Pre-Approved for a Car Loan
The last trick to get the best car financing deal is to go through a pre-approval agency like Car Loans Canada. When you apply for a car loan through us, we will match you to one of our many dealerships across Canada that will best suit your needs. This way when you go to a dealership, you and the dealership know exactly what you’ve been approved for so you can focus solely on choosing a car.