Car Loans in Cambridge Ontario: Getting Approved

Car Loans in Cambridge Ontario: Getting Approved

Posted on September 27, 2022

Buying a car is a significant financial decision and you need to arm yourself with the knowledge to get the best value for your money. We think all buyers should be able to make informed decisions, hence this post.

We tasked our Cambridge auto loans team to explain the basics of how to get a geat Cambridge car loan. It’s easier than you might think!

Not All Auto Loans Are Created Equal

Cambridge auto loans can be categorized into either prime or (A-paper) or sub-prime (Alt/B-paper). Depending on your credit profile you will fall under one of those two categories.

Consumers with a credit score of 680 or higher will usually qualify for prime which is a very competitive rate. Individuals with credit scores under the 680 range will usually pay higher interest because they are considered higher risk.

It would be a great idea to check your credit score now if you haven’t already so you where you stand.

Finding the Right Lender

The old-school way of getting auto loans was to go to your local bank and apply for one. That model was common before online shopping became normal.

Thanks to the internet, you can get auto loan quotes from a plethora of lenders who are all vying for your business.

When comparing the quotes that are being offered by these lenders, it would be prudent to read the fine print.

What some lenders will do is quote a low-interest rate and you may think that “hey, what a great deal”. But fees are being levied in other ways, a term that is used is “loan origination fee” or something that sounds similar.

These are ways the auto loan providers can increase their revenues while still appearing to be competitive.

Putting Your Best Financial Foot Forward

Before applying for any type of auto loan in Canada, you should request free copies of your credit report from Equifax and TransUnion.

There have been reports that well over 30% of credit reports in the US have errors in them. These errors can bring down your credit score which drives up the cost of borrowing.

After you have reviewed your credit report, if there are any mistakes you will need to notify the respective credit reporting agency.

By law, they will need to correct the errors if you can prove it is an error, but you should document everything to protect yourself.

Picking the Right Car

Now that you know what is the maximum auto loan you can afford, it is time to go car shopping.

Do you have a particular vehicle in mind? Are you buying new or used?

If you are buying used then the price of the car has to match the current fair market value or the lender will not approve the loan.

Best Time to Buy a Car

Monday or the end of the month/quarter are usually the best times to buy a car. On a Monday, things are slow and the salespeople will want to start the week off strong with a sale.

Traditionally, car salespeople have sales targets and the cut-off time is the end of the month/quarter. These salespeople will be motivated to “make a deal happen” to hit their goals.

Never feel rushed or obligated to buy from any particular dealership. Buying a car is a major financial commitment and you owe it to yourself to weigh all of your options.

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