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Financing A Used Car In Canada

December 7, 2018

Financing A Used Car In Canada

Not every Canadian can afford to finance a brand new car. Buying a vehicle from dealerships that sell used vehicles is a viable solution for many. Canadians buy used cars all across Canada and there is a large selection of auto financing options available.

Getting a vehicle loan, whether for a new or used vehicle, can be a long-term commitment which requires thorough planning. Despite the initial low price, you have to make a number of considerations when planning to purchase a previously-owned vehicle.

Assess your budget

Before going to a car dealership or any alternative credit source, it is important to evaluate your budget or how much you will need to complete a loan program successfully. You need to consider the cost of not only the down payment but also weekly or monthly loan payments, and even the insurance in some cases. Therefore, it is important to determine what you can afford. Develop your budgeting plan before taking a step further. For example, determine how many months will it take you to conclude the loan term. The duration of your loan term can play a key role in determining the interest rate and your financial capacity to pay back the loan.

Interest rate

Some people will instantly discard the idea of buying or borrowing for a used vehicle. There are advantages to financing a used car. Due to the lower cost of a used car, the loan term is likely to be shorter. The insurance rates on used cars are also lower than what you expect to pay for a new car. However, people who choose to finance a used car are given high interest rates to make the loan safer for the lender. Even if the interest rate is high, financing a used vehicle can save you money down the road.

When it comes to auto financing, the interest rate can make or break a deal. Make sure to choose the right rate no matter how tempted you are to buy a particular vehicle. Finalizing a deal on a higher rate can sometimes be discouraging, but do keep in mind, qualifying for that loan and making payments on a regular basis can significantly increase your credit score over time.

Make considerate decisions

There are numerous technical aspects which must be considered before making a vehicle purchase. For instance, as it is required by law, when it comes to buying or selling a used car, both buyer and seller are required to sign a form stating that the vehicle is free of all liens and that the vehicle is in good mechanical order. As a buyer, you must obtain a copy of this form for your record before you conclude the deal. Moreover, take note of the value of the vehicle you are going to finance. Whether you want to pursue a loan for a used car or a new one, always go to a trusted and reputable auto loan provider.

If you are in Edmonton, Find My Auto is one of the most trusted source for getting auto loans on affordable terms. Regardless of your credit history, we are committed to ensuring fast car loan approval. For more information, contact us or fill out our form to get started!

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