Get BC Auto Loan Rates That Fit Your Budget
Before you enter into a contract for a car loan, doing some research will help you get the best BC auto loan rates. There are online auto loan calculators that can be a useful tool to help you determine the monthly amount you want to pay. In addition, following these seven steps will put you on the path to achieving the best possible loan rate for your credit score.
1. Become familiar with your credit history by ordering a free copy of your credit report from Equifax Canada and TransUnion Canada. Take this opportunity to examine it and fix any mistakes so you can improve your credit score. Once you know your credit score, you can have a better idea of the possible interest rates available to you. You also want to examine your finances and decide what’s affordable for you before you approach a lender. This will ensure lenders match you with a fit that meets your needs.
2. There are some things you can consider doing to reduce the cost of the car and lower interest rates. Many lenders will take off a little if you:
• Sign up for automatic payments
• Provide a co-signer or collateral
• Don’t accept extras such as extended warranties or security systems
3. Don’t assume you’ve found good BC auto loan rates until you’ve shopped around and seen all your options. A lender is not obligated to give the best rate you qualify for, so when you meet with a dealer, make sure they know you’re shopping around. This will increase your chances of getting a better rate.
4. Before you approach a dealership, compare options for good BC car loan rates at the bank where you have your checking and savings account, your neighborhood credit union, and online lenders. This way:
• You’ll know what rates are available to you.
• You’ll find it easier to tell if the dealer has unnecessarily marked up the rate.
• You’ll have more leverage when you negotiate with a dealer.
• You’ll have a good idea of what you can afford.
5. Take the contract document home and read it thoroughly before you sign it. If the dealer discourages you or insists that it’s not necessary, drop the deal and go to the next lender. Remember that this is a long term contract you’re entering, and you don’t want to discover hidden costs later on.
6. Choose the shortest loan term possible. You can receive the best BC auto loan rates if you can compress your payments into a short period. It may seem like a low monthly payment is the way to go, but don’t be fooled by low payments. Low monthly payments mean that you’ll have to pay off your loan for the next five to seven years. When payments continue for more than four years, you could end up paying more twice as much interest than if you were making a higher monthly payment for three years.
7. Avoid entering into an agreement that has conditions. If the loan is “conditional” or “contingent”, it can mean that the interest rate or monthly payment can change at a later date, and you can end up with a deal that is worse than when you started. Ensure that the monthly payment, the length of the loan, the interest rate, and the down payment are finalized before you sign the contract.