5 Tips On How To Save Big On Your Car Loan Canada

Everyone loves to get an advantage to save cash on their spending; sometimes advantages come in general as discounts and or promotional offers but most of the time it requires your knowledge and strategy to get the benefit of savings on merchandise and services. If you are planning to get car financing and looking to save big on your next new or used car loan in Canada, the most exhausting part of the process involved in buying a car, after settling on a price, is acquiring the right kind of loan for your vehicle. Most car consumers usually get excited about going after their favourite cars which makes them enter the car dealership unprepared for the car loan application process, and that kind of behaviour, lack of knowledge and planning have been costing these consumers millions of dollars every year.

A win-win situation is the best transaction that suits both, the car dealer and the buyer and if you want to create one; you should follow these 5 tips before sitting down for the negotiation: check your credit report, surf before buying a car, go local, speak the language and be better prepared to negotiate.

5 Tips To Save Big On Your Car Loan Canada

1) Check your credit report

The very first step that always requires you to get into any kind of financial transaction starts with your credit report; You will not find any personal finance advice, magazine, or book that doesn’t refer to the importance of knowing what is on your credit report. Despite the fact that modern media has been beating us over the head with this advice for the past couple of decades, most people do not know their credit scores or check their credit reports on a regular basis. You can get a copy of your report by directly contacting the credit bureaus: Equifax and TransUnion.

Being unknown about your credit score and the other details of your credit report before applying for a car loan is a monumental mistake. You want to have any blemishes on your report resolved before you apply for a car loan because the results of your lender’s credit inquiry directly impact your interest rate.

Get your credit report first; it will reflect your financial position. Your credit report includes basic information about you – name, address, social security number, etc.; your late payments, any outstanding debts you have, the amount of credit available to you; any public records on you such as judgments and bankruptcies; and inquiries into your credit from potential employers or lenders.

And just because you have caught up on late payments, cleared outstanding debts, or cleared up any judgments does not mean these blemishes are automatically removed from your credit report. Sometimes, you need to follow up with the creditors to make sure they report your reconciliation of debt to all three credit bureaus.

In addition, identity theft and/or fraud can result in false, unfavourable records on your credit report. In January 2006, the Federal Trade Commission reported that more than 686,000 people reported identity theft and fraud complaints in 2005. Stolen identity and fraud can result in major credit report issues.

2) Better surf before buying a car

You will be far less tempted to impulse buy, driving away from the car dealership with a car you can’t afford if you have established boundaries in your mind before you begin.

You can save big money on your car loan if you have a budget and type of car in mind before you go shopping. One easy way to accomplish this is to go online and check out different car dealership websites.

You can compare and contrast vehicle makes models, styles, features and pricing.

3) Go Local

There are many national auto websites, but did you know that many local car dealerships are now online as well? You can easily find online websites that offer Canadian car loans not even in provinces and territories but also in cities where you reside; you can get a website that offers car loans in Ontario and as well as car loans in Toronto at the city level. The advantage of working with a local car dealership can outweigh working with the manufacturer or a national website when you want the best in quality customer service, a relationship for the lifetime of your car and the best deal on your auto loan.

The advantage of getting a loan through a local dealership is similar to the reason every town in America has a locally-owned restaurant that has regulars: local businesses have a sincere investment in the community. That interest often leads to better customer service, a more customized approach to selling, and the ability to get you a better loan than you will receive from a lender who doesn’t know – or care – who you are.

Lastly, the local dealership may have more than one location, increasing your options for finding the car you need but offering the same uniform auto financing options. So, if a customer goes to one car dealership and doesn’t find what they need, they can visit another location and expect the same quality customer service.

4) Speak the language

There’s nothing more frustrating than going through the entire car-buying process, thinking you have a good deal, and learning down the road that you were taken advantage of – simply because you had no idea what your sales rep was talking about, make sure you have an understanding of some of the basic industry terms that could be thrown at you during your transaction. With this knowledge, you won’t misunderstand the details or find yourself signing a contract or paperwork that you don’t understand.

5) Be prepared to negotiate

If you’ve followed the four of the previously stated steps in this article, you will be armed with the necessary tools to negotiate the best rate possible for your car loan. There’s nothing wrong with shopping around and checking with other lenders to see what kind of rate they can offer you, but you must remember that numerous inquiries into your credit report may go against you.

And, when you go through the dealer for your auto loan, the sales rep wants a long-term relationship with you. This motivates them to work harder to get the best rate possible for you. In contrast, an online or off-site lender’s interests begin and end with the loan – but the car dealer wants you to: come back and have your car serviced, return when you want to purchase your next car, and tell your friends about them, further strengthening the dealership’s reputation in the community and increasing business.

Before you sit down to get your next car loan, take the time to do a little homework so that you can feel confident about securing the best deal for your auto financing. Investing a little time and effort before making the deal can go a long way in creating a win-win situation for you as a buyer and the car dealership. These 5 tips on how to save big on your car loan in Canada are general steps to benefit personal finance that can work anywhere in the world.