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Burlington Money Myths Exposed

Burlington Money Myths Exposed

The world of auto loans and finance is a convoluted one and often difficult to understand if you don’t work in it or have an avid interest in it. We often come across myths and mistruths that we cannot imagine people believe. Then we remember how complicated this industry is.

 

That’s what posts like these are about. Our Burlington auto loan team collated common questions and comments so we can clarify as many points as possible on our blog.

 

Only people with lots of disposable income can save money

 

We hear this a lot and it isn’t true. Anyone, with any type of income can save money. It doesn’t matter whether you save $50 a month or $500. As long as you save something.

 

You can use those savings for a car down payment, keep it as an emergency fund, use it for the kids or whatever you like.

 

Simply making your own coffee for the commute to work could save anything up to $25 per week. I’m sure there are other savings you could make that don’t impact your lifestyle too much.

 

Credit cards are evil

 

This is another popular misconception. A credit card is not inherently evil. Just like guns, the card doesn’t get people into trouble, people do. Credit cards are a financial tool you can use to make life easier or more convenient.

 

As long as you pay off your balance in full each month and don’t use the credit card to buy things you wouldn’t normally buy, a credit card is perfectly safe.

 

You can say the same for auto loans, personal loans or any financial product. Use them correctly and they enable you to do a lot. Use them incorrectly and they can get you into financial trouble.

 

As long as I set up automatic payments for the minimum, I’m covered

 

We always recommend setting up automatic payments for all your outgoings including credit cards. In one sense, using automatic payments does mean you’re covered. It means you won’t ever miss a payment and will keep positively impacting your credit score.

 

On the other hand, only paying the minimum can mean even a modest credit card debt will never really be paid off. Minimum payments are a safety net. They should not be your default setting for paying off debts.

 

Having no debt means I should be able to get an auto loan

 

You would think so wouldn’t you? Being good with money should predispose a lender to think you’re a good bet. But how do they know that? They don’t know you. The only way they can assess whether you’re a risk or not is by your credit report.

 

If you don’t use credit, there won’t be enough in your credit report to let them assess your risk. If they don’t know whether you’re a good borrower or not, they will err on the side of caution and bet that you’re not.

 

This won’t prevent you accessing an auto loan in Burlington but it may make the loan more expensive.

 

We will use all our skill and experience to deliver the lowest possible Burlington auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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Categories: Auto Loan

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