There are moments when it is time to purchase a vehicle. Whether this is your first, second or third purchase, there is always a consideration to take in. Do you buy a new car or a used car? One might think that buying a used car would be the way to go because used cars […]
There are moments when it is time to purchase a vehicle. Whether this is your first, second or third purchase, there is always a consideration to take in.
Do you buy a new car or a used car?
One might think that buying a used car would be the way to go because used cars often come at a lower price than a new car. However, a new car could be a better investment because you are guaranteed a car in mint condition with no repairs (and no extra costs) needed.
Here are some of the advantages and disadvantages to buying a new car or a used car.
Buying a New Car
- Less money will be spent on maintenance and repairs. A new car requires only regular maintenance (unless there is an accident).
- If major repairs are needed, chances are that your car’s warranty will cover most (if not all) the costs.
- There are more financing options with incentives such as cash rebates and better interest rates. The financing rates are also lower on new vehicles.
- Buying a new car means buying a car with the latest advanced technology which can account for enhancing comfort, performance and safety.
- Higher fuel efficiency and lower emissions – a greener initiative.
- You are more likely to pay more money upfront than you would for a used car.
- The value that you bought the car at will depreciate the longer you own it, which means that when/if you sell it, you will not be making a profit.
- Insurance is higher when buying a new car and you will most likely need a more comprehensive plan than a used car, which leads to more costs.
Buying a Used Car
- Costs exponentially less than buying a new car – this makes it easier to save up money to purchase a car.
- Insurance is lower and you may only need collision coverage.
- The depreciation on a used car is much less than the depreciation on a new car – which means that you don’t lose as much money.
- Registry renewals are cheaper.
- You run the risk of having the car come with higher maintenance and repair costs.
- The warranty could be expired and therefore if any big repairs are needed, it comes straight out of your pocket.
There are a variety of things to take into consideration when buying a new car or a used car. The advantages and disadvantages are weighed pretty evenly against one another. The choice to buy a new car or a used car depends entirely up to you and your personal preferences. It all comes down to the current various factors in your life. You need to consider several things such as: how much you are willing to spend, how much time you plan to invest in taking care of your car and your preferred lifestyle when it comes to your vehicle.
There are numerous tips which you will need to follow when going about getting an auto loan so you can get the best possible deal, so make sure to look into what your options are as well as what you can do to reduce your interest rate while still getting the amount you need. The fact is that getting an auto loan is a serious matter so you shouldn’t take it lightly. With all of the different lenders out there, you will have to do your research before choosing one in particular.
CHOOSE THE RIGHT LENDER
The lender that you decide to go with when trying to get your auto loan will be immensely important, which is why you will have to devote enough time to considering as many of them as possible before you make your final decision. You should make an effort to speak with a few different lenders personally so you can ask them certain questions such as how much interest you could expect to pay with each of them. Although your credit will partially determine what your interest rate is like, the lender that you choose will also play an important part in this.
Those who have bad credit will find it a bit harder to get a low interest rate with their auto loan, though there are some things you can do to pay less. Finding the right lender for the auto loan you need is obviously important, so you will need to devote enough time to doing this. After you have taken the time to go online and see what you have to choose from when it comes to auto loan lenders, you will be able to make a good final decision on a person or financial institution that can help you out.
DETERMINE YOUR CREDIT SCORE
Since your credit is going to be such a crucial aspect of getting your auto loan, you will need to know what it is. This way you can get the very best loan to get a new vehicle in the near future. You will be able to go online to get a copy of your credit report so you can find out what it is like. Getting your credit report is quick, easy, and free so you won’t have to go to much effort or any expense to get it. Just make sure that you look into some of the different lenders that are in your area as soon as possible.
DETERMINE THE AMOUNT OF MONEY YOU NEED TO BORROW
Another thing which you should take into consideration is the amount of money you borrow, because you will not want to borrow a penny more than you absolutely need. It will be very important to go to a credit union first so you can reduce your chances of paying a high interest rate. Typically credit unions are the place to go for just about any time type of loan, because most commercial banks tend to charge high interest rates and many private lenders are not reputable or trustworthy at all.
HERE IS WHAT A SATISFIED CLIENT HAD TO SAY
“I currently live at home with my parents, I pay no rent. My income is low but due to my limited expenses I thought I can quality for a car loan. When I got turned down time and time again, I felt depressed and my dream of owning a vehicle is slipping away. No one would take me seriously and no one would give me a car loan. After my research I came across Auto Credit Financial’s web site. And I didn’t think I would get approved. But some one called me the same day with the good news. Thank you ACF you made my life a lot easier, and I would certainly refer my friends to you in the future. THANK YOU!”
APPLY NOW and you have a high possibility to be approved in just 2 hours.
If I was asked what most of the conversations I have had with consumers at AutoCreditFinancial started out with, one phrase starts almost every credit interview… Can you approve me for a car loan with (fill in almost any blank here and it’s been asked). While every circumstance is in itself unique, the best way for me to address it is to look at the basic qualifications for the extra analysis that the financial institutions impose on a challenged car loan application.
In our AutoCreditFinancial.ca network we have connections with Canadian Chartered Banks, regional and provincial credit unions, finance companies, buy here pay here dealers and private lenders.
Here is a Summary of major stipulations and factors underwriters consider when you apply for any car loan:
CREDIT SCORE (FICO OR BEACON FROM EQUIFAX OR TRANSUNION)
Your credit score shows up on the top of the lenders computer when they pull your credit bureau and usually gives a first impression to the human on the other side of what they may expect when they look at it. Your credit score is like a bowling score not a golf score. The higher the number the better. The number on the credit score doesn’t guarantee you an approval, however a score below a lenders threshold can get your application declined. This is why it is important for a professional like at AutoCreditFinancial.ca to direct your application to a lender that will look past this number if there have been or are current problems keeping it below their threshold Beacon Score From Equifax.
INCOME AND INCOME RATIOS
Many lenders bring minimum income requirements to the table and again this threshold must be met for the application to get looked at. However what a lender is looking for is your capacity to get a car loan and have the money to pay it. They are looking to answer where the money will come back to pay them back for the loan and taking on the risk. Lenders minimums start at $1250 with most around the $1700 range. However Regional Income Guidelines are Common with the Banks as parts of Canada have higher living expenses.
TOTAL DEBT SERVICING RATIO (TDSR)
To calculate your TDSR take all your monthly credit obligations, including the car payment you are seeking, and divide it by your gross income (before taxes pre-tax income).The target the lenders are looking for is usually in the 40-50% range with some making the exception up to 67% or two thirds of gross income.
PAYMENT TO INCOME RATIO (PTI)
This is an important ratio to most lenders. Lenders offering 100% Approval usually rely most heavily on this ratio as car payments are usually the highest of priority above other credit obligations as the car gets you to and from your work place. Target for a payment no more then 15% of your income while most lenders look to cap out around 20% on the high end.
STABILITY AND CHARACTER
Most lenders want to see how long you have been at your residence and job to determine how stable your application will be. If you frequently move provinces you may find that regional lenders may not want to deal with your application as their collateral may not be accessible in the event you do not pay. Knowing you have been at your job for 10 years improves your application in how consistent the income is from your job. Lenders may also look for you to be passed the probationary period (3 months in Ontario, 6 months Alberta) while some only require only a job offer as a basic requirement.
LOAN TO ASSET VALUE (LTAV)
Usually only the lenders and dealers can accurately calculate the actual Loan to Asset Value of your purchase value. Some lenders use a booking chart based on year and kilometres while others use the Actual Canadian Black Book KM Adjusted formula. Regardless of the number used in the calculations lenders like to lend only on a percentage about the wholesale value of the Vehicle. You arrive at this number by dividing the selling price and the wholesale black book value of the vehicle. Target is 120% of wholesale or below, while some stretch as high as 150%. On “Guaranteed 100% Approved Financing” on Vehicles the ratio may be below 100% to ensure the lender can get the full asset value if they need to reclaim the vehicle collateral. Most will permit a higher LTAV amount if you choose to include a service contract, extended warranty or guaranteed asset protection (GAP insurance).
Many people ask what the minimum downpayment is. While some lenders ask for a specific commitment level from the customer, the most common need for a down payment is to change into a favourable rating the income or LTAV ratios.
THE NO GO AREAS FOR MOST (BUT NOT ALL) LENDERS
This is the most common call I get. A scenario where someone has been denied credit instantly and has lost their home. These are called system declines most often as a computer can read that the underwriter will see something that is an automatic decline. These are different by each credit provider. I have listed some below. These are not rejections for all lenders, they are system declines for some lenders:
- Currently in credit counselling (or Less Then 6 Payments in)
- Government or Small Claims Judgements
- Double/Doubles (Not the Coffee) Refers to Multiple Bankruptcies or Declines
- Past due child support (Family Responsibility in Ontario
- Unfinished Bankruptcy
Most car dealers, finance managers and lending institutions discard these applications far too easily. AutoCreditFinancial.ca has taken many of these same scenarios and turned them into approvals. That is why the approach taken to focus on the individual strengths of the applicant is the philosophy we use in getting the highest ratio approved in Canada.
HERE IS WHAT A SATISFIED CLIENT HAD TO SAY
“I have graduated from Ryerson University recently, and after getting my new job I was excited to enter the working world. Thinking it may be the right time to get a car, I walked in to a dealership trying to buy a new vehicle. I was only informed then due to my limited credit history I couldn’t get a loan from them regardless how much interest I paid. Disappointed I had to take the bus to work every morning which made my day extremely difficult. I was so relieved when I got the news from AutoCreditFinancial, now I can finally have a car I need!”
Yours Truly – Rod M
Check out how easy the credit application is now to understand and APPLY NOW. You have a high possibility to be approved in just 2 hours.
With 46 Percent of Canadian consumers with credit concerns, the resources available on the internet are making it more accessible than before to put in an application for and receive financing from a lender or directly a dealer that deals specifically in approved car financing, leases and loans with a bad credit history.
However, during the recession various lenders who helped with bad credit loans, left the Automotive Market Place in Canada. Wells Fargo Auto Finance, HSBC and AmeriCredit were national lenders leaving. With fewer challenged credit lenders and less buy here pay here dealers participating in subprime auto financing, resources as found on www.AutoCreditFinancial.ca are becoming more popular than ever. Auto Credit Financial specializes in approved car financing through a national network of lenders and in house dealers in Canada. All connections have extensive experience in helping individuals and companies with credit issues get approved into new, pre-owned, off lease and and low-mileage used cars.
The service provided has closed over tens of millions of automotive loans for customers in Ontario, British Columbia, Alberta, Nova Scotia, Quebec and Saskatchewan. We deal with most credit concerns and we through providing the fastest, most non-threatening, online car loans for people with bad or new credit.
We help car buyers with all credit find car dealers that will give them a second chance or even third chance. This make our Approved car loans the fastest turn around time to get you driving. Auto Credit Financial works with the most reputable franchised new, used and pre-owned car dealerships in Toronto, Halifax, Calgary, Vancouver, North Bay, Ottawa, Montreal, Moncton and Kingston making our expanding network on of the the largest loan referral to ensure that each customer gets the best car loan possible, even with a poor payment history.
No matter what your credit report and beacon score happens to be, there is help. Auto Credit Financial has worded with people that have perfect, good, poor, or non- existent previous credit history. We also have helped many that have little money or no money to put down. Credit scores of our consumers have been impacted by bad circumstances such as double bankruptcies, multiple repossessions outside of proposal at various times, current delinquencies on existing obligations, repossess than 6 months ago and collections from cell phone companies or pay day loan places.
Now that you know that there is an easy way to get approved car loans if you have had credit challenges. There is no hassle, no obligations and no pressure. We are Canada’s Car Loan Experts for people with all credit. Bottom Line we make it make it easy for you.
HERE IS WHAT A SATISFIED CLIENT HAD TO SAY
“Owning my business has always been something I was proud of, until I got turned down for a car loan from a big dealership. The reason behind my decline was the fact I couldn’t proove my income. I didn’t want to borrow money from my family given the fact everyone in my family thinks I am doing well. After I contacted AutoCreditFinancial, I was surprised how quickly my loan documents got approved, even without the proof of my income. I would like to thank you guys for your hard work on my case.”
APPLY NOW and you have a high possibility to be approved in just 2 hours.