4 Common Car Loan Mistakes to Avoid in Canada
4 Common Car Loan Mistakes to Avoid in Canada
Posted on September 16, 2022
Car finance is both simple and complex at the same time. It’s easy to acquire a car loan for most of us yet the various terms and conditions can be very complex. We see the same car finance mistakes being made all the time in our industry, which prompted this post.
We asked our Oakville auto loans team to collect the 5 most common car finance mistakes they see and offer solutions. We hope they help!
1.  Not reading the loan paperwork
You may be dealing with an auto loan expert or may be in a dealership dealing with someone who does this for a living but you should never take someone’s word on a contract.
A loan is a contract that costs you a lot of money. Even if you totally trust the person you’re dealing with, it’s your responsibility to make sure you know exactly what you’re signing up to.
2.  Rushing into a purchase
We are all guilty of impulse buys at one point or another. That’s fine if it’s a new jacket or pair of sneakers but it isn’t quite so fine if it’s a new car.
A new car purchase and auto loan application should only be undertaken after research, planning and plenty of forethought.
It’s a long term commitment and not something you want to rush into without spending a lot of time budgeting, researching and assessing.
3.  Not using a down payment
No money down auto loans are common but that doesn’t mean you should use one.
A down payment improves your chances of being approved for the loan. It also lowers the chances of going upside down if you buy a brand new car.
Down payments can also lower the loan amount, lower monthly payments or shorten the term. All things that can save you money in the long run.
4.  Not preparing your paperwork
Auto loans require a lot of paperwork. Proof of ID, of address, of employment, of income, bank statements, savings and more. If you’re trading in your old car, there’s all the paperwork for that too.
Having it prepared in advance means the lender has everything they need to assess your application quickly.
Not having it prepared means lots of back and forth between you and the lender while you hunt for the paperwork and send it over to them. This can extend the application process significantly!
5.  Borrowing more than you can afford
There’s an argument that says if you need to borrow an auto loan over 72 or 96 months, you cannot really afford that loan. We don’t necessarily subscribe to that as you are completely free to do what you want, how you want.
However, we would ask you to carefully consider whether you can afford that loan or not and let us help you properly assess whether it makes financial sense.
We will use all our skill and experience to deliver the lowest possible Oakville auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.
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