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Finding The Best Car Loan Rates in Canada?

admin March 30, 2022 0 Comments

Not all car loans are created equal. Rates are tied to the type of car you’re buying, equivalent credit scores, the type of finance charge structure the lender employs, and your preferred method of payment. However, if you need the best car loan rates in Canada right now, these factors don’t really matter because you need to work on them on a long term, like improving your credit score, and that takes time.

So what can you do right now to ensure you get the best car loan rates? Follow this guide to know exactly that:

So How to Get the Best Car Loan Rates in Canada Now?

Your best bet to receive good car loan rates in Canada even when your credit score is not the greatest is by getting Pre-Approved! Vehicle finance approval is a game-changer for car buyers as you can conveniently shop around for cars while also saving money. Here are a few reasons why you should get pre-approved.

1. You Know in Advance The Vehicles You Can Get: 

Once you get pre-approved, you can conveniently and accurately look for vehicles that you know you can afford. Everything, including the car’s price, expected loan amount, and approximate interest, is in front of you before you go to the dealership.

This way, you can crunch some numbers and get a precise idea of how much you’ll be paying monthly and whether your current expenses can be adjusted around it.

2. You Get Access To the Best Auto Finance Rates Available:

Your car loan rate depends on various factors that you cannot change right now, like a credit score, for instance. So what you can do to get the best car loan rates in Canada right now is negotiate with the salesperson. This means you go in, tell the salesperson your preferred car and let them try to get financing options from car manufacturers for you as well.

You are not bound to take the loan you’ve been pre-approved for, so if the sales guy comes with a better rate, go with it; otherwise, get your own financing.

What To Do If You Can’t Get Pre-Approved?

Not getting pre-approved can be frustrating and cause you to miss out on getting the best car loan rates in Canada. Here are two things you can do to ensure you can benefit from pre-approval:

  • Build Credit: This one is a no-brainer; the most common reason for loan denial is bad credit. So start making your current debt payments on time and consult with a credit counselor to get a step-by-step process for building credit.
  • Get a Co-signer: You can also ask a friend or family member to co-sign with you on loan. But remember, they’re putting themselves on the line for you, so if you are not sure you can make timely payments, do not ask to co-sign.
  • More Down payment: You can save money for a higher down payment to decrease the amount of loan; this can also increase your chances of pre-approval.

Once you get pre-approved, you’ll know what interest rate you will be paying, and you can adjust your car budget based on that to lower or increase the loan amount.