Car Loans in Waterloo Ontario: Getting Approved

Car Loans in Waterloo Ontario: Getting Approved

Posted on September 28, 2022

Unless you are very wealthy, you will need a car loan when buying a new car. Us mere mortals need help financing such a large purchase and that’s what this post is all about.

Those who need auto financing should follow these suggestions to avoid making the wrong decision.

Our Waterloo auto loans team is on hand to provide the essential information on car buying for newbies!

Car Buying for Newbies in Waterloo - The basics

To secure an auto loan, the lender will ask you to fill out an application. The application is going to ask you a series of personal questions like where you live, where you work and how much you earn.

Some applications may ask for your social insurance number (SIN) but you are not required to give that. The lender should be able to decide without your SIN.

Credit Report

When deciding on whether to offer an auto loan, the lender will get a copy of your credit report from either TransUnion, Equifax, or both. The report will contain details about you, debts you may have, and whether they are in good standing.

Along with the credit report, the lender is going to look at your credit score. These scores are calculated using a formula that is distinct for each auto loan provider.

The formula is called the Vantage Score and dictates the type of loan you qualify for, if any.

Prime vs. Sub-Prime

If you have good credit and a stable income, you should qualify for a “prime” auto loan. These loans have preferential interest rates and good terms.

On the flip side, if your credit does not meet the criteria for prime then you may be a candidate for sub-prime.

Sub-prime loans can help consumers who do not qualify for a prime loan but the interest rates are significantly higher.

Don’t Focus on Monthly Payments

A common question that car salespeople ask when you are on the lot is how much per month are you willing to pay. This is a question to gauge your budget and also determine whether you are a serious buyer.

Prospective car buyers that focus solely on the monthly payment will end up regretting it. What auto loan provides do to win business if offer low monthly payments but extend the tenure of the loan.

The longer the loan, the more interest you will end up paying more than anticipated.

Best Times to Buy a Car in Waterloo

When shopping for a great deal on a new car, timing is everything. A great time to be shopping is near the end of the year when new inventory becomes available.

The dealership will want to make room for the new cars and will offer very competitive terms on existing stock.

To get the best possible value, consider using Kelly Blue Book to find out which vehicles retain their value and are reliable. Along with Kelly Blue Book, you can also look on websites like Autotrader.ca for insight into what vehicles are lemons and which are not.

These resources are helpful but you need to take the car for a test drive yourself. Only you can determine whether the car is a good fit for you and your unique needs.

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