Four Important Steps to consider before your next car loan

Four Important Steps to consider before your next car loan

Buying a car is the second largest investment after buying a house. It can be a stressful time, and there are many things to keep in mind to ensure you’re getting the right car and financing. Talking to friends and family is good, but sometimes it can only add more stress and confusion. Everyone has a different opinion as to what the “right” car is or how to “get a deal.” All that may be fine, but what is the best car FOR YOU, and what is the best financing option FOR YOU?

We’ve compiled four of the most important steps to think about ahead of time before your next car purchase. Read these steps now and keep them in mind when the time comes to start your car shopping journey. Instead of being stressed, you can be prepared and enjoy the process.

 

  1. Research.

Take the time to research. The times of merely trusting your Uncle or your dad’s friend on car buying are long gone. Be your own trusted advisor. Your car shopping experience starts online, and the internet is the best place to dive into your research. There are plenty of very reputable sites that can help answer your car-related questions such as Autotrader.ca or Wheels.ca. Just as important, you should be taking the time to research your financing options. The more information you have, the better you can make a decision that fits your lifestyle.

 

  1. Financing.

Whether you are going to finance your new car through the dealership, or from an online lender or through the bank, you should take the time to review all your options and choose the best one for you. Take the time in advance to understand the rates and terms of the agreement. To be even better prepared, you can find out in advance what your credit score is. You can visit sites such as Credit Karma or one of the credit bureaus to check your credit score. If your credit score is below zero, then it may be a good time to work on building up your credit before applying for a car loan. You can find out how to improve your credit score here. During this time, it’s also a good idea to consider a down payment on your car loan. Do you want to save for a little money down on your loan? A down payment may increase your chances of getting better rates or qualify for certain dealer promotions.

  1. Timing.

When you are ready to pull the trigger on your new car, keep in mind that there are certain times during the month or year that offer better purchase benefits. For example, dealerships offer higher savings at the beginning of the year on last year’s models. They have to make room for new model year inventory, and they are more likely to offer higher savings to make room on their lot. So if you’re not picky about the model year and still want to a new car, then January, February may be a good time to get a good deal. The manufactures oftentimes also offer their best incentives in September and December. The end of each month is a good time to also confirm a deal you may have been working on, as the sales reps and sales managers are likely more aggressive with their discounts and offers to close the deal to meet their monthly quotas.

 

  1. Be Prepared.

When you’ve chosen your car, and you’ve narrowed down your financing options, it’s a good idea to get prepared for the final transaction ahead of time.

–    Contact your insurance company and review any changes that may occur to your policy. Have them contact the dealership ahead of time to get any information on the vehicle they may require to finalize your documents. You need your proof of insurance before you can drive the car and leave the dealership.

–    Make sure you know what the required list of documents are from the finance company. Do you need proof of income, or your Notice of Assessment (NOA)? You will most likely need to take in a void cheque, proof of insurance, and copy of your valid driver’s license. If you have a co-signer on the agreement, you will need to provide the required documents for them and have them present during the document signing.

–    Take the time to read all the documents when you are signing.

 

Thinking about these steps ahead of time can avoid some stress during your car buying journey. It can also give you some tools to save you some money and time. The more prepared you are, the more confident you can be in knowing that you’re making the right choices.

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