BUYING A CAR, WHETHER NEW OR USED, IS A BIG INVESTMENT. TO HELP YOU MAKE THE RIGHT CHOICE, HERE ARE SOME THINGS TO CONSIDER.
A question of budget!
When it comes to buying a vehicle, we have to juggle our budget, our needs and our preferences, but it's the budget that must be the determining criterion to avoid any financial nightmares. It has to be calculated realistically, without sacrificing bread and butter. Finding the best available financing for comparable vehicles is the next step in securing the best possible deal.
Find the best rate!
With a healthy credit history, manufacturers very attractive promotional rates are within our reach. To stimulate sales of certain models, manufacturers sometimes offer rates as low as 0%, as is currently the case with Jeep, which is a huge discount. For example, for 2 comparable SUVs financed at 2.99% and 7.99% respectively, the difference in cost on a $40,000, 60-month loan is $5,500. That's a solid argument to consider when choosing a vehicle. Of course, the more desirable the models, the less attractive the offers. Manufacturers also offer attractive rates on their certified pre-owned vehicles.
Credit Denials and Solutions
With a low credit score (649 and below), access to low manufacturer rates or regular bank loans may be limited or even impossible. The question is: "Who can finance me and at what rate? The best way to proceed is to consult with a credit analyst who specializes in financing (not a tank salesman) to obtain a competitive auto loan. There are several institutions competing for the 2nd chance loan market today. A skilled analyst will put them all in competition to get the best possible deal for his client.
Dealerships that specialize in 2nd chance credit and offer a wide selection of newer vehicles are the best option for obtaining both financing tailored to your needs and a quality vehicle. An auto loan that respects your ability to repay is an effective way to rebuild your credit.
Advantages of a Newer Vehicle
Choosing a late-model used vehicle offers a number of advantages. It's less expensive than a new car and easier to finance than an older model, especially if it's still covered by the manufacturer's warranty. For example, the basic warranty (which is automatically transferable at no cost) is 5 years / 100,000 km for Kia or Hyundai, and even up to 10 years / 160,000 km for Mitsubishi. As a result, the risk of having to pay for costly unexpected repairs is low, which is taken into account by financial institutions when considering a loan. Although the initial cost may seem higher, a newer vehicle with a warranty offers long-term savings as maintenance costs are limited to normal use.
Financing an Older Vehicle
It's difficult to get an auto loan for a very old vehicle. Since it's likely to end up on the scrap heap before it's paid for, it's not solid collateral for a lender. These vehicles are therefore financed with a personal loan or paid for in cash.
Happy Driving!