Buying a Car When You Still Owe Money On Your Current Vehicle
Buying a Car When You Still Owe Money On Your Current Vehicle
Posted on December 27, 2022
The demand for new and used cars has never been higher in Canada. If you currently have a car that is a few years old, you should consider trading it in for a new one and saving some money in the process.
Used car prices are at all-time highs
Typically, a car loses a significant amount of its value when you drive it off the lot but that is no longer the case. With such a drastic shortage of cars available in the market, prices are trending upward.
The reasoning behind taking out a Cambridge car loan now
The interest rate on your current Cambridge car loan is probably on the high side. Interest rates dropped to historic lows due to the pandemic but now that vaccination rates are up, the economy should begin to stabilize and that means interest rates will shoot up.
If you were to wait until you paid off your current car loan, the new loan you get could carry a much higher interest rate and there is no guarantee you will be able to find a car.
By taking the initiative and getting a new car now, you are protecting yourself from paying more interest than necessary.
Qualifying for a new car loan in Cambridge
It may be more difficult to secure a new car loan now than it was a few years ago. Since the pandemic, lenders are more cautious when giving out loans, especially with low-interest rates, the lenders have to issue more loans to try and optimize their profits.
In the past, you could get a prime car loan with a 650 credit score, now you need a 680 and some lenders now require a 700.
The trade-in value of your car
Even if you have a great credit score and stable income, the trade-in value of your car is another variable that needs to be worked out.
When a dealership appraises a car, they usually give two quotes, the first is an all-cash offer and the other is the trade-in value of the vehicle. The trade-in value is always higher because the dealership is able to sell you a new car which gives them more wiggle room on pricing.
Getting the right deal
To get the best trade-in value and low-interest rate Cambridge car loan, you will need to reach out to a local car dealership and go check out their inventory. The dealership will be able to help give you advice on how to raise your credit score if you are experiencing any issues with credit.
These dealerships also have an extensive network of lenders they work with so you know they will be able to get you a great deal. Interest rates are on the move, so it would be smart to contact your local dealership and at least find out your options.
The sooner you lock in a low-interest rate car loan, the happier you will be, just make sure you bring along all of the receipts to show your vehicle was properly maintained.
We will use all our skill and experience to deliver the lowest possible Cambridge auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.