In today’s online world, traditional financial institutions – like banks and credit unions – aren’t the only places offering auto loans. In response to rising demands from their customers, dealerships and online retailers also offer a wide variety of financing options. This is a smart choice, particularly for second-hand vehicles.
Although faster and easier to negotiate, buying a car privately cuts back on the available financing options: basically, cash or a bank loan. However, buyers with black marks on their credit scores may find their account managers less than welcoming. Other private-sale risks include hidden flaws and even ownership scams, particularly on deals touted as ‘Quick Sale Bargains’.
In contrast, online retailers and dealerships are linked to a wide range of lenders, specialised in working with low or even no-credit customers. An additional benefit: buying a car from a recognised business offers peace of mind, knowing that the vehicle has been professionally inspected and serviced. Even if the price is higher than a private sale, the guarantee of a clear title and reconditioning warranty far outweigh any additional fees.
Canada’s Used Car Market Booming
An unexpected side-effect of the pandemic, second-hand car sales have been booming all over the world, as commuters avoid mass transportation. In parallel, many income-strapped families in lockdown sold off their second cars while working from home, and unable to travel.
As a result, online vehicle inventories are packed with hundreds of great deals, with dealerships necessarily going digital and showcasing their wares to far larger markets. Because these prices reflect that steep first-year 20% drop in value, pre-loved cars often put their buyers in a positive equity situation right from the start, or bring them to this status in just a few months.
So here are five solid reasons why Canadians are choosing second-hand cars today:
- lower price;
- slower depreciation;
- low-upkeep and reliable
- frequently well-equipped;
- often still under warranty.
Picking the Perfect Used Car Loan Option
Yes, it is possible to find a 0% loan for a used car, although this is rare. Often featured as special offers and seasonal deals from manufacturers, these facilities are usually earmarked for buyers with flawless credit ratings.
For the average consumer, a Certified Pre-Owned car is an excellent – and affordable – choice. Often eligible for special financing from some manufacturers, the initial payments on these vehicles may be far lower than for brand-new models. When warranties are still in effect, CPO loans can be as long as 84 months, or more. Offering protection against unexpected outlays like major repairs, flexible extended warranties can be included under most loans as well.
Browsers to Buyers
In fact, online retailers have streamlined the entire car purchasing process through high-security platforms. Prospective buyers are ushered through sophisticated websites, becoming owners in just four user-friendly stages:
- Browsing online inventories, sorting them by parameters that include the make, model, year, price, and lifestyle;
- Applying for pre-approved loans and shortlisting their preferences while waiting for acceptance;
- Closing the deal, adding in any extras, like licensing, insurance, and extended warranties;
- Arranging delivery, picking the most convenient times and dates for their new wheels to drive up right up to their front doors.
Instead of swimming with these sharks, prospective buyers can explain their needs to a reputable car dealer with bad-credit financing facilities. Thanks to modern technology, many retailers can now approve loan applications based on bundled soft enquiries at far greater depth than just credit ratings.
- Takeaway: Remember, there’s no free lunch – and there’s no free money either!