There are a lot of things to research before buying a car. One of those things is your financing options. In Canada, car financing is not as hard to understand as you may think. The requirements are generally the same all over the country, which makes this financing guide by GFA Financing easy to understand no matter where you happen to live.
Check Your Credit
Your credit score will heavily impact the amount and type of offers you receive. In addition to your credit score, your income and work history are considered. Most credit scores will range between 300 and 900. Anything over 650 is considered a very good score, but even if you have less than 650, you can still get financing. Many companies offer agreeable terms to consumers, even if they have less than stellar credit.
Check Your Financing Options
Once you have your credit score in hand, it’s the perfect time to talk to the dealer about their available financing. You should find out what offers are available and if there is manufacturer financing for your car choice. There are also other financing options available, including those from local credit unions, your credit card company, and banks. Your dealership will be able to best explain your options to you by considering your credit score and various other factors.
Think About Payment Terms
Understanding your loan terms, including how long you plan to take to pay off your financing, is important as they will play a big role in your final cost. Longer loan terms may offer easier to manage monthly payments but will result in paying more interest in the end. Shorter loan terms have higher monthly payments, but you will end up paying less interest over time. Find out which loan terms are best suited to your financial situation.
Trades & Down Payments
Any type of financing will involve either a trade-in of an older car or a down payment towards the purchase of a new car. The more you offer upfront in the form of trade or down payment, the less you will owe for your new purchase. You also have the option of trading in your old car as well as making a down payment towards the balance. The more you contribute, the lower your interest rates will ultimately be.
Pay Ancillary Cost Separately
Many dealerships will add in ancillary expenses to the total amount of your loan. Keep in mind that you have to pay interest on any financed amount. Paying extra expenses like taxes or fees separately will drastically reduce your long term cost.
Get Your Paperwork
Once you have covered the financing and the terms, you will need to check the paperwork. Your dealer will go over each step to ensure that you have provided all of the required information and that you understand the agreement. Make sure that you make arrangements for car insurance and any other incidentals. You will also need to pay the fees and sign all of the paperwork so that they can be filed accordingly. After your paperwork is complete, you will get your keys and warranty information for your vehicle.
How We Can Help
Financing for your car is not as complicated as you may have initially thought. However, since not all dealerships are made equal, our last piece of advice is that you should find a dealership you can trust. At GFA Financing, we are proud to have some of the most knowledgeable and welcoming staff in the industry. We ensure that our Toronto car loan and financing solutions are easy to understand and are happy to discuss your options with you at length. That way, you can make an informed decision before any purchase. If you are looking for more information on our auto loans, give us a call at 1-888-721-0731 today.