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How to Pay Off Your Car Loan Early

You have just chosen your new car and negotiated the terms to pay for it. You may be content at first, but that five-year note may take the edge off your excitement after a while. You may begin to feel as if there is no end in sight, but there are some practical ways you can shave quite a few months off the life of your loan and pay less interest overall.

Make Payments

The simplest way to pay off car loans in a timely manner is to make payments on time and never skip a payment. If your payment is late, the lender might tack on a fee to your loan principal. Not only does this increase the amount you owe, you will also be paying interest on that fee. Your lender may occasionally offer you the opportunity to skip a payment as a reward. While this may be tempting, fight the urge to skip. Skipping a payment only adds time to the life of your loan.

Round Up

Paying a little extra than the contract terms require each month is another good way to pay your loan off early. If you budgeted for $300 a month, but your finance plan only requires you to pay $250, go ahead and pay the higher amount that you planned every month. This not only takes months off the terms of your loan, it also lowers the amount you pay in interest.

Pay More Often

Some lenders charge penalties for making extra payments, but if your contract terms will allow for it, try to make an extra payment every once in a while. An easy way to do this is by making a half-payment every two weeks. Over the course of a year, instead of the 12 payments you would have made if you had paid once a month, you will make 13 full payments.

Your car loan may seem like it lasts forever. With a little extra effort, however, you can pay it off faster than you originally planned.

Do Your Homework for Hassle-Free Car Shopping

Setting out to shop for used cars can be daunting. There are thousands of cars out there, and selecting the perfect one takes time, patience and common sense. A snap decision based on eye appeal might leave you with an expensive car that doesn’t suit you. Nor do you want to snatch the cheapest car and find yourself the proud owner of a lemon.

Before you head to the car lot, decide how much you can afford for the down payment and the overall car. Arrange the necessary financing. A good rule of thumb is to keep car payments lower than one fifth of your net pay.

Once you are at the dealership, shop with purpose. Have an idea of what you want, research and compare prices, and make sure you get key details on used cars of interest from the seller. Ask about the car’s history and performance. You can fact check vehicle records easily through several online databases.

When you’ve found one or more used cars that appeal to you, get cozy with them. Test seats, explore trunks, pop hoods and check fluids. Go over each car for structural issues. Don’t worry about minor scrapes, but do watch for misalignment such as closed doors that don’t align with the frame, a sign of previous damage. If you’re not sure what to look for, bring a car-wise buddy or consult the owner’s manual.

Last but not least, take the car out for a spin. Accelerate to highway speeds, test the car on corners and hills and brake hard to check for braking capability. Consider driving the car to a mechanic for an inspection. When you settle on a car, your next step is to negotiate with the dealer. If you’ve done your research, you will know the car’s value and can bargain accordingly. If you have prearranged financing, the dealer may compete by offering lower rates to your benefit.

Doing your homework is key to finding the right used cars. Follow the steps above to buy a car that will go for thousands of kilometers.

Buying a Used Car: How to Choose a Payment Option

When the time comes to buy a used car, there are many financial factors to consider. Perhaps your budget will narrow your used car choices, or you may not be aware of the payment options available. We are ready to show you some ways you can pay for your vehicle and to show you that the make and model you desire most may well be within your reach if you plan carefully.

Consider the Time Frame

As you consider payment options, one of the first factors you might want to think about is how long you will be paying for your car. Whether you secure a loan through the bank or choose in-house financing with us and depending on your credit, your loan could be as brief as two or three years or as long as five. It is important to understand the exact terms of the length of your loan before you sign off on a vehicle.

Give Yourself Time

Even if you find yourself needing a new vehicle for your commute to work or school, you should avoid jumping into a deal right away. Take the time to consider your options, as this may help you avoid hefty payments that might be hard to handle later on. For example, ask yourself whether your current car is a valid trade in or if you can secure a down payment that may help lower the cost of a vehicle.

Review Your Budget

One mistake many people make when they shop for used cars is to miscalculate how much they can afford to pay monthly. To avoid this error, you will need to factor more than just the car payment into your auto ownership budget. The cost of insurance, gas and other taxes and fees that will need to be paid when you purchase a vehicle should all be included in your budget to ensure you do not overextend it.

Buying a used car can be a challenge, especially if you are unsure of your payment options. However, being prepared and asking the right questions can help you get the car you want at an affordable payment.

Our Straightforward Car Loans Make Car Shopping Enjoyable

Think of the car features that you definitely want in your next vehicle. Would you like leather seats and a moon roof, or do you want plenty of seats and cup holders? Do you think you have a short list of favourite vehicles or are you open to anything that fits your budget? Even if you are undecided on a car just yet, we can take the worries out of getting the best car loan for you.

Car Considerations

The first impression of a vehicle comes down to two factors, ergonomics and personal preference. You should have ample head and legroom, feel that the window layout gives you good visibility, and like how the gauges and controls are laid out. If members of your family have car seats, it is a good idea to bring them along to see if they work well with the cars you are test driving.

If you have a set color or feature combination in mind that does not come around every day, you may have to look longer to find what you want. But, if you know what your top three colour and make combos are, you may be pleasantly surprised by the number of cars available to test drive. Conversely, if colour is not important to you, you may get a great deal on a car in a less popular colour.

Financing the Transaction

When you have found the vehicle you want and are ready to make a purchase, we want you to know the total price of the used car you’ve decided to buy. We itemize any extended warranty and interest costs in all of our car loans. Of course we are always happy to consider your current vehicle as a potential trade-in, and we offer extended warranties for our used cars. This is a great way to handle any unforeseen repairs covered by the warranty.

Our financing staff are experienced in setting up a loan with terms that will fit your budget. Come visit us soon to see how enjoyable car shopping can be.

Can You Get a Loan for a Used Car?

If you are like many car buyers, you want to buy a used car instead of a new one. For many reasons, that makes a lot of sense. You might wonder, though, if car loans are available for used cars. Generally, the answer is yes. Here are some things to consider when applying for a used car loan.

Think About Purchasing at a Dealership

If you need to finance your used car purchase, you should consider buying the car from a dealership. Generally, dealers are in a better position to finance used cars than other institutions. In fact, many dealers routinely finance used car loans. While there are exceptions, banks, credit unions, and financing companies generally prefer to finance new cars. Because they have a better chance of realizing a return on their investment with new cards, traditional financing companies often have rigorous application processes for used car loans. While you might ultimately be successful, getting such a loan from a conventional lender can be extraordinarily stressful. Thus, if you want to finance a used car, you should probably buy your car at a dealership.

Know Your Credit Score

Like with financing a new car, you will be better able to negotiate beneficial used car loan terms if you know your credit score. Before you start shopping for your car, request your score from one of the credit bureaus.

Don’t Choose Too Old of a Car

The newer your used car is, the greater your odds of securing financing. While there is no absolute limit, generally cars older than four or five years are more difficult to finance. On the other hand, if you run into trouble financing your older used car, you might look for a new car. Often, those who are unable to get a used car loan have no problem with new car financing.

Before you shop for used car loans, consider the unique challenges of applying for one. By knowing what to expect, you will be in a better position to secure financing for your used car.

What Pre-approval Means for Car Loans

Car loans can be expensive over the life of your vehicle if you do not plan ahead. High interest rates and long terms will add to the cost of your car over the years. It may be tempting to go straight to the dealer and test drive some vehicles when shopping for a car. Before doing this, consider becoming pre-approved for a loan. Shopping for a loan before shopping for a car will give you a better understanding of your buying power and the overall cost of your potential vehicle.

Preapproval is a preliminary loan application. A potential lender will review your credit, your income, and possibly several other factors. They will then tell you how much they are willing to lend you, what the interest rate on the loan will be, how long you will be expected to make payments on the loan, and if any down payment will be required.

As the borrower, you do not have to commit to accepting the loan at that time. Banks, credit unions, and dealers offer preapproval, so there are several financing options to choose from. Preapproval allows you to shop at all these locations before committing to a loan.

With a good credit score and a large down payment, you may be preapproved for a very large loan. While this may make it tempting to purchase a more expensive vehicle, be careful to not overextend yourself and exceed your monthly budget.

If you are not approved for a large enough loan, preapproval allows you enough time to prepare to compensate for the difference. Consider a larger down payment, a cosigner, or a longer term loan to make your car loan offers more agreeable.

Pre-approval helps you know how much car you can purchase, how long it will take you to pay for that vehicle, and what the long-term costs of the loan will be. Car loans can be intimidating, but pre-approval may make the borrowing process easier to understand.

3 Reasons to Buy a Used Car

If you’ve ever turned on a TV — and chances are you have — you were probably inundated with commercials for shiny new cars for only a single paycheck per month! When your family is in the market for a new car, a used cars service could offer you something just as beautiful as what you see in on the new lot. That’s not the only benefit, either.

Used Cars Are Cheap

It might seem obvious, but used cars are cheaper, and it goes beyond a simple price tag. Perhaps you prefer luxury cars, but could never afford one right off the lot. For what you’d spend on a brand new Toyota, you might be able to find the luxury car of your dreams. Even if you prefer something family-friendly over a sports car, you could save up to 50 percent by purchasing something used.

It Might Be Safer

It seems like a different car recall is in the news every day. Purchasing a new car leaves you vulnerable to undiscovered mechanical issues. If you opt to buy one that is a few years old instead, it’s more likely that any problems were already discovered and fixed, leaving you with peace of mind.

You Don’t Have to Skip the Warranty

Many people worry they’ll end up purchasing a used car that doesn’t run for long, but most dealerships offer certified pre-owned cars. Certified used cars are usually slightly more expensive than traditional used cars, but the certification means the car was professionally inspected and, if it had any problems, was professionally repaired. Certified used cars come with a warranty that ensures you can drive the car for a set amount of years, at least.

If you’ve been trying to decide between purchasing a brand new vehicle or buying a used one, our used cars service could be just what you’re looking for. Whether you need something for the whole family or something to impress your friends on the weekends, we provide a range of vehicles for a wide variety of budgets.

Effective Ways to Lower the Cost of Your Loan

Few things are more exciting than getting a brand new car. That being said, you don’t want to let your excitement blind you to taking steps to reduce your car payment. There are a few strategies we recommend for reducing the overall cost of car loans.

BOOST YOUR CREDIT SCORE

If you’re still a few months away from buying your car, do everything you can to improve your credit score, even if you feel you already have a good score. Every extra point you add helps to minimize you as a risk and maximizes your savings on your loan.

EXTEND THE LENGTH OF YOUR LOAN

You’ll likely have the option of choosing a seven-year car loan. Even if you can pay your car off faster, a longer loan term is a great way to lower your monthly payments. With this fact in mind, know that your longer terms are likely to result in higher interest over the life of your loan. Only you can decide if this sounds like an ideal situation if it means you can easily afford your monthly payment. S

AVE UP A LARGER DOWN PAYMENT

It’s best that you save up as much as possible to cover your initial down payment. The more you save, the less you have to borrow and the lower your monthly payments will be. If this means being saddled with your old wheels for a few extra months, it could very well be worth it in the long run. It’s always best to focus on long-term gains over the short-term sacrifices.

BUY A LESS EXPENSIVE CAR

It’s always best to buy well within your means. While a less expensive car may not be as flashy and luxurious as a top-of-the-line ride, the less expensive car may be better for your future finances. After all, no one wants to spend a majority of their money on a car payment. Do everything you can to lower your car payment as much as possible before signing any documents. A little foresight can save you a lot of money. 

How to Save With Dealer-approved Car Loans

People want to save money on products they buy, and this is most true of products that cost more. Cars are one key example. People certainly are inclined to make any effort to save money on car loans when the overall price can represent such a large sum. Car dealers have access and industry insight that can save people money in the long run. Working with one can potentially save anyone looking for a car a reasonable amount of money.

Preferred Lenders

Dealerships often negotiate car loans through a bank. Because these companies have so much business, they often qualify for special rates at a number of financial institutions. This can be advantageous for many customers looking for a good deal. The connections a dealer has can lead to a better price for consumers. It is important to check with a dealership to find out what sort of options it can provide.

Less Down

People looking for car loans through a dealership could also qualify for less down on competitive rates. It could benefit a person looking for such loan to pay less in the beginning and enjoy good rates such as those that a dealership can provide. Even if the dealership cannot guarantee better rates for less down, it still can offer competitive rates for a potentially smaller amount of money. Working with a dealership can be important for anyone who wants more personalization with his or her car loan.

More Options

Another opportunity a dealership can provide is more options. Dealerships have been selling cars for years, and they can leverage their industry knowledge to create a better end result. A person in such a situation should consider reaching out to the professional service with particular requests.

Anyone looking for car loans should explore his or her options and see how a dealership might be an essential part of owning a new car.

What Preapproval Means for Car Loans

Everyone likes to get a good deal. When you are offered a low monthly payment on your car loan, that might seem like the best deal of all. In the long run, however, that low monthly payment might actually end up costing you hundreds of dollars more than you intended to pay. In order to understand the true total cost of car loans, you must look at three different factors.

Loan Amount

The initial amount you borrow is called the loan principal. The amount of principal you have left at the end of every billing cycle is one half of the equation that determines how much you will pay in interest. To lower the total amount you pay on the entire loan, it is a good idea to start with a lower principal. If you are able to pay 20% of the initial $25,000 cost in a down payment, that is $5000 of the purchase price that never figures into the interest you are charged.

Loan Rate

The other half of the interest equation is the interest rate itself. Bargaining for a lower interest rate can significantly reduce the price you ultimately pay for your next vehicle. A great credit score and other factors, such as dependable income, can lower your risk factors with the lender and thus can result in a lower APR, saving you a great deal of money.

Loan Term

A lower monthly payment might be tempting. When you accept a lower monthly payment, however, you are lengthening the term of your loan, postponing the date when the car will be paid off and costing yourself a lot of money in the process. You will pay significantly less interest with a 2- or 3-year loan term than with a 4-year loan.

When negotiating the terms of car loans, fight the urge to take it easier than your monthly budget can handle. Factor in the amount, rate and term of your loan to get the best deal overall.