Common Myths when Shopping for a New Car

Common Myths when Shopping for a New Car

Posted on September 30, 2021

The process of buying a car in Canada may seem simple but there are some common myths you should ignore if you want to get the best possible value for your money. We polled our dealers and our London auto loans team to come up with a few common myths when shopping for a new car and the truths behind them.

Myth #1 New cars tend to be more reliable than used cars

There is a common misconception that you don’t have to worry about mechanical issues when shopping for a new car because the car is brand new and its usually used cars that are usually plagued with issues.

To a certain degree, this bias was true once, but that was well over a decade ago.

If you purchase a used car from a reputable dealership you should be able to drive with peace of mind knowing it will be dependable.

Myth #2 The auto dealership will get you the best financing

Car dealerships do offer on-the-spot financing to help their customers but the dealership is well compensated by the lender.

Most car dealerships receive the bulk of their income from originating auto loans so they will use incentives like offering a lower sticker price to win your business.

Some dealerships can make securing auto financing very convenient but there is no guarantee that you are getting a good deal. Thanks to the internet, you can do a simple search online and get multiple quotes from a variety of lenders.

These no-obligation quotes do not hurt your credit and give you some insight into what is currently available.

We’re not like that of course and every loan we provide is the most competitive we can find!

Myth #3 You need perfect credit to get a great auto loan in London

Some manufacturers offer 0% car loans for well qualified customers. Even if your credit is less than fantastic, there are options available to you.

Interest rates are currently at historic lows and show no signs of rising any time soon. Since the cost of borrowing money is low, lenders can offer car loans to consumers at competitive rates, even if those borrowers have credit issues.

If you are wondering whether you have good credit, 650-680 seems the minimum score for a competitive car loan.

If your credit score falls under 650, you may need to get someone to cosign the loan or you will need to come up with a higher down payment on your end.

Myth #4 All credit scores are the same

If you checked your credit score with services like Credit Karma, you may get one number but this number is not fixed. Each auto loan provider in London has its specific requirements.

So, Credit Karma may say your credit score is 700 but the prospective lender, based on their scoring system would only rank you a 675.

You need to be aware of these nuances, especially if you are borderline good/bad credit.

Myth #5, You need to act fast or miss out

The fear of missing out (FOMO) is a very powerful force that salespeople leverage when trying to close a car deal. You should never feel like you have to make a decision immediately or you will not be able to buy a car.

This is a very significant financial decision and you need to be completely comfortable with it.  Only when you are completely satisfied with the terms of the financing and vehicle should you move forward with the purchase.

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

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