There are many options when it comes to car financing, but the best option is to compare your options and find what’s right for you. We’ll take you through these options so you can get an understanding of what is best for you.
Financing a car is ideal if you want to purchase an expensive vehicle at once and pay it off over time with small monthly payments. Every option has its own pros and cons, so it’s important that you understand the difference between them before deciding which one is right for your situation.
However, keep in mind that interest rates on used cars tend to be much lower than those on new cars. They’re less risky investments for lenders since use vehicles don’t depreciate as quickly or lose value as fast (if at all).
Pros of financing a car
- You can get a new car with a lower monthly payment than if you paid cash.
- Financing allows you to have a more flexible cash flow.
- If you maintain a good payment history, it can help increase your credit score.
- You can get approved for financing with zero down.
- You can get an extended warranty with your financing, or even better: purchase the vehicle with an extended warranty already included! This means that any repairs will be covered by this extra cost and not come out of pocket.
Cons of financing a car
- You will have to pay interest.
- Your monthly payments will be higher than leasing the vehicle.
- Milage limitations.
- Risk of losing the vehicle if you’re unable to keep up with the payments.
Paying cash for your car
Paying cash for your car is the best option if you have the money on hand. You don’t have to worry about interest rates, credit scores and monthly payments. You also don’t have to worry about insurance or depreciation because there are no loans involved in this method of your car purchase.
Where to get auto financing in Canada?
If you’re looking to buy a new or used car, there are several options when it comes to financing. Here are some of the best places to go:
- Dealerships
- Banks and credit unions
- Online dealerships
Car financing through Dealership financing
Dealership financing is usually the most expensive option. There are many hidden costs associated with dealership financing, including:
- Fees for appraisals and inspections.
- Credit insurance (e.g., GAP) that’s often required by dealerships to protect them from losses if you default on a loan and they must repossess your car.
Dealership financing is usually only available for new cars, not used ones – so if you want an older model or one with higher mileage than what’s available at a dealer, this may not be an option for you. And finally, dealership loans are difficult–if not impossible–to get approved for unless you have excellent credit scores (720+) and solid income history.
Car financing through Bank lending
If you have good credit and are looking for a long-term loan, bank lending can be a great option. Bank loans tend to be more expensive than other financing options, but they also offer more flexibility in terms of payment plans and interest rates.
If you’re considering getting a bank loan for your car purchase, make sure that the lender has approved you for the amount of money that works best for your budget–and don’t let them talk down from their original offer!
Car financing through online dealerships
Online car dealerships are a relatively new but rapidly growing way to finance a car. Online dealerships offer a variety of financing options. You can apply for a loan online and get approved within minutes, then shop for your next car from the comfort of your own home.
Online financing is also convenient because you don’t have to go anywhere in person to complete the transaction. This means you can get everything done from the comfort of your own home. If you visit the dealership to look at cars, it’s much easier than having to negotiate with salespeople who will try their best to push you into buying something that costs more than what you have budgeted.
When financing through an online dealership, there are fewer surprises when it comes time for them to give you a quote on how much you’re looking to pay. The quote will include all fees associated with buying/financing a vehicle as well as insurance costs if applicable; this way there won’t be any hidden charges later when all is said and done.
Get Connected with a dealership and the best financing option
Drive Away will connect you with one of our trusted dealership partners and find you the best financing option for your situation. All without having to go through all the hassle of searching online, visiting dealerships, or calling different banks and lenders yourself.
Can I Get Pre-Approved With Bad Credit?
We work to help you get the best rate possible, even if you have been turned down before. That means all credit types are welcome, regardless of your credit history.
If you are unsure about what you can qualify for, take a couple of minutes to complete our free pre-approval application to find out what type of loan you can get approved for before you start your search for a car. After you get your vehicle, we will work with you to further improve your credit so you can access lower interest rates sooner rather than later.
If you’re looking to buy a new car, financing is one of the best ways to make sure that you get a great deal on financing. There are many different financing options available, and each one has its own pros and cons.
It can seem overwhelming at first glance, but not to worry! Drive Away acts as your personal helper to get you into the car you want. Learn more or get started today!
