Financing a new car could be stressful for customers. Combined with bad credit history and it can be an anxious time indeed. Whether you live in Vancouver, Fort St. John, Calgary, Regina, Winnipeg, Toronto, Thunder Bay, Windsor, Ottawa, Montreal, Halifax, St. Johns, or anywhere else in Canada, one should be prepared when shopping for a car loan with less than decent credit. There are some steps you’ll want to take before stepping into a dealership to ensure a smooth transaction. We’ve enlisted some useful tips for you to make your car finance process less stressful.
Tip 1: Discern Your Needs
What do you expect from your vehicle? You don’t want to purchase a car that is larger than you need, or amenities that do not really serve a purpose. It can be alluring to buy a vehicle with all the advanced bells and whistles, but avoiding these will cut back on the overall costs.
Other points to consider include gas mileage, your total daily commute, and anticipated routine maintenance. Get a clear idea on what you actually need and what costs will be involved in meeting those needs before going into the dealership. It will mitigate the temptation to deteriorate your financial situation with a car that isn’t right for you.
Tip 2: Budget
Whenever you think about signing up for a long-term financing arrangement that includes monthly payments, setting a realistic budget is important. Verify prices online to get a strong feel for the actual prices of makes and models you are considering for purchase. Realizing the true market value of a given vehicle helps you avoid overpaying. Another crucial consideration is the cost of insurance: before visiting a dealership, equip yourself with quotes from reliable insurance providers.
Bear in mind that the longer a loan contract is, the smaller the monthly payments will be. Ultimately, you will pay more in interest on a more drawn-out arrangement. Many bad credit loans include 24-36 month terms rather than the standard 48-60 month terms. This is because it reduces risk to the lender should you default. They will have received more money up front. Budget for those smaller loan terms when calculating which kind of vehicle you can truly afford.
Tip 3: Credit History
It may come as a surprise how few people check their own credit histories on a regular basis. You may want to regularly check up on your status, especially in these days of increasing identity theft. Before applying for a car loan, you may want to access your credit report by contact one of the major Canada credit bureaus: Transunion Canada or Equifax Canada. You can obtain this information once per year free of charge. It is advised to have this information before purchasing a car. Beware of firms posing as credit bureaus and stick to the two we have suggested for your own safety and security.
Buying The Car: With proper homework, you can feel confident walking into the dealership with the facts and figures you need to make an educated and financially sound choice of vehicle.
Tip 4: Stick To The Budget
You make the effort of setting up a budget-time to stick to it! It can be somewhat nerve wracking to heed your budget once you’re surrounded by shiny new wheels, but it’s crucial to think about the long term. Add-ons will mount up your payments and accumulate interest, both of which can hinder your ability to make consistent payments on a bad credit loan.
Tip 5: Read Carefully Before Signing
Contracts might read boring, but do yourself a favour before signing and read every clause. Once you put your name, you are legally obliged to that auto loan contract and there is no turning back. It is your responsibility as a consumer to go through your contract. If you have questions, ask. If you feel pressured by the dealer, decline to sign until you can process the terms carefully before signing. Never sign anything that demands suspicion, and be wary of any dealer who brushes off your questions or tries to rush you through a contract. Get Pre-approved here.
Tip 6: Retain That Contract
Before stepping out of the dealership, you should carry a copy of your fully signed and dated contract in hand. Do not wait for it to arrive in the mail, and be sure it has been filled out with one hundred per cent accuracy and completeness. Keep it in a safe place, and for good measure, scan a digital version for online storage as well. If you need to refer to it in future, accessing it will be so much easier this way.
Tip 7: Make Your Payments On Time
If you have a bad credit car loan, you are likely already aware of the repercussions of late or missed payments in your financial life. Set up automatic payments if keeping track of bills is hard for you, and whenever possible, pay more to help decrease interest in the longer term. If you find yourself challenged with making the agreed-upon payments, don’t throw your hands in the air and avoid paying. Contact the loan provider immediately to see what options are available to you if you feel you might miss a payment, for example, deferred payments. As the high-risk recipient of a loan, even one missed payment can lead to the repossession of your vehicle, not to mention further damage to your credit situation.
Building credit is not a destination but a journey that requires effort. At Canada Auto Experts, we help Canadians build credit faster with an affordable car loan custom-made to individuals need. If you have bad or no credit, sign up for an online car loan application here or call 1-855-550-5565 and get approved today.