880 Walkers Line, Burlington, ON, L7N 2G2, Canada

Car Loan From a Bank in Canada: Good Idea or Not?

Car Loan From a Bank in Canada: Good Idea or Not?

Have you ever wondered how car financing works in Canada? It may not be as interesting as keeping up with the latest news from Hollywood. Still, you should familiarize yourself with how car loans work, so you can save money the next time you buy a car.

Not All Lenders Are Created Equal


The automobile industry brings in billions every year, and the companies that provide car loans each specialize in a particular type of customer.


In the past, lenders used a "one size fits all" approach to lending.


However, with deregulation, financing will never be the same again.


It Comes Down to Your Financial Profile


Twenty years ago, if you wanted a car loan, you would go and meet with your local bank manager.


The manager knew you and your family; your children probably played hockey with the manager's kids.


Those days are long gone, now when you want a car loan from a bank in Waterdown, you would fill out an application.


An automated system would look at a couple of variables to determine which profile you fall under.


These profiles can range from "prime," "Alt-A," or "Subprime" these are classifications that indicate how likely you are to repay the loan as agreed.


The software makes this determination by looking at your credit score. If your score is over 720, you are in prime territory and can get the most competitive car loans in Waterdown.


If your credit score is above 600, you will be able to get a fairly competitive car loan, and anything under 600 is considered subprime, and you will pay a premium.


You should always keep track of your credit by signing up for credit monitoring services with platforms like Credit Karma.


There is no cost for this service, and it protects you from any unpleasant surprises when you do apply for credit.


Why you should not apply for car loans online


There are people who do everything online, and while it may seem tempting to apply for a car loan over the Internet, you should not go through with it.


The websites that advertise car loans online are not actual lenders; they are firms that collect your contact information and sell it to the highest bidder.


There is also the risk that your information could end up in the hands of identity thieves.


Where to get the best deal on a car loan in Waterdown


Contrary to popular belief, if you want to get the best deal on a car loan in Canada, you are not going to find it online.


Your best course of action is to go through a local dealership. The dealership will already know which lenders are going to offer the best deal based on your profile and can negotiate the most preferential terms on your behalf.


What makes the dealership stand out from all of the other firms is their ability to help you no matter your credit situation; even if you are in subprime territory, the dealership will get you approved for a car loan; you just need to take the next step and reach out.



If you're ready for a car loan in Southern Ontario, we'd love to help with that! simply fill in the form below to get started.

Car Loan Pre-Approval

    Car Loan Approval



    Categories: Auto Loan

    Tags: ,