The world of finance speaks a language of its own, and it’s often incomprehensible to many Canadians looking for the best auto loans in Halifax. So, with the usual Laneway Auto proactive approach to transparency, here’s a list of the main terms used on the auto loan market, with easy-to-understand definitions.
But before getting down to the nitty-gritty of each and every term you might hear during your used car purchase journey, here’s an overview of each step along the way.
Auto Loans Turn Dreaming to Driving
Does your dream car seem impossibly far away? Don’t despair – our vehicle financing experts are always happy to help you pick the best auto loans in Halifax. Even if you can’t afford your dream car right now, they can draw up a plan that steers you closer towards your ideal wheels with each successive purchase over the years. So here are the six simple steps that can make your driving dreams come true.
Step 1. Prepare a Realistic Budget:
This means listing your monthly incomes and expenditures, and then working out how much you can afford to spend each month on a car. This includes not only the repayments on your auto loan, but also road tax, licensing fees, maintenance and repairs, fuel, and parking.
Step 2. Boost Your Credit Score:
During those exciting months between deciding to buy a new (or new-to-you) and actually signing the paperwork, wise buyers know that they can save thousands of dollars over the next few years by increasing their credit score before applying for vehicle financing in New Brunswick. This is because higher credit scores mean lower interest rates – and a couple of percentage points add up to serious savings over a loan term of up to nine years.
Step 3. Find the Best Interest Rate:
How much you actually pay for a car depends on the interest rate – which in turn is based on your credit score. For buyers with credit scores of 670 and up, interest rates will normally be under 6%. But consumers with lower credit scores can still sign up for great auto loans in Nova Scotia, at higher interest rates and with longer terms that keep monthly instalments affordable.
Step 4. Discover the Trade-In Value:
No matter how old your current car may be, it still holds some residual value, which can be used as part of your down payment on your next set of wheels. For a fair deal, check out its trade-in value here, and include this amount in your auto loan calculations.
Step 5. Calculate your Down Payment:
As a rule of thumb, plan on putting down at least 20% of the purchase price for a new car, and no less than 10% for a used vehicle. Remember, the larger your down payment, the smaller your auto loan, so it’s worth saving hard for a few months before your purchase. When you really can’t afford the recommended amount but still need wheels, you should put down as much as you can, but always leaving your emergency funds untouched.
Step 6. Decide on an Auto Loan Term:
Once you’ve got your financials straight, it’s time to check out the best auto loans in Nova Scotia (and Atlantic Canada) by keying your data into this easy-to-use car loan calculator. You need the car sticker price, your probable interest rate (based on your credit score), and the largest down payment you can manage. Then tinker with the loan duration, to find a monthly repayment that fits into your budget. Pick the shortest term you can afford, to avoid falling into the negative equity trap, with an upside down loan.
Step 7. Prequalify for Your Auto Loan:
Now you’re ready for the final step – applying to prequalify for your car loan. Don’t worry about downgrading your credit rating, as this no-cost step is completely confidential. Just tell us which of our vehicles you fancy, and one of our vehicle financing consultants will handle everything else.
When you’re looking for auto financing, transparent transactions are good indicators of dependable vendors – like Laneway Auto, which has been financing used vehicles for thirty years. If you aren’t sure about anything, our certified consultants are happy to walk you through every step in the vehicle financing process.