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How Exactly does Car Financing Work in 2021?

How Exactly does Car Financing Work in 2021?

Car prices in Canada are going through the roof, even used cars are selling at all-time highs. With inflation running at epic levels, if you have been thinking about buying a new or used car, you have to act quickly before you are priced out of the market.

Our Binbrook auto loans team outlines how car financing works and how to get a good deal on your next loan.

Establishing your maximum car-buying budget

This is a critical step since the prices of cars are in a state of flux, you have to work out what is the maximum you can afford and work from that vantage point.

If you are not sure what is the maximum you can afford, some online calculators can give you a ballpark figure. A better option is to get pre-approved for a car loan by going through a local car dealership.

Some websites let you access auto loans online, but you do not know if you will satisfy all of their underwriting requirements.  By working with a local dealership, you will know what is the maximum loan you can get and can also identify which vehicles in the dealership inventory fall within your budget.

Getting a Binbrook car loan with bad credit

An added benefit of working with a dealership is their ability to help identify which lenders specialize in bad credit auto loans. Do not take the term “bad credit” to hear, it is not a personal reflection on you as a person.

Some lenders do give special preference to borrowers with bad credit but the trade-off is a higher interest rate. The dealership saves you time and hassle because they already know which lenders are viable and whether you will satisfy their underwriting guidelines.

The dealership is also capable of providing you with some tips on what you can do to boost your credit score in the short term.

To start, make sure your bills are paid up to date, and if anything is in collections to pay those collections off as soon as possible. (credit karma is a free app that lets you check your credit score)

The credit score is just one component in the auto loan underwriting process, your income is also very important. What type of job do you have or are you self-employed?

Each lender will have its documentation requirements but you should have your latest payslips and income tax notice of assessment. It does not hurt to bring along your bank statements as well, these documents help substantiate your income.

When you enlist the help of a local dealership, you are going to have a better outcome. First, you are getting a Binbrook auto loan at a very competitive rate based on your financial profile.

Another distinct benefit is the car you buy from the dealership, whether it is new or used will be in pristine condition so you don’t have to worry about whether the vehicle is reliable or not. The last and most impressive benefit is you know the dealership is there to help you any time you have questions or require support.

Now that you understand how car financing works in Canada, you should contact your local dealership ASAP.

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

Categories: Auto Loan

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