Is it time for a new car? Whether you need a more reliable ride, want to swap your SUV for a more economical vehicle, or your sports car into a family wagon, you will most likely need financial assistance. And, like your mortgage, the wrong car loan can literally loose you thousands of dollars in the long run. This is something we all want to avoid, especially with the global financial crisis knocking on our doors.
So how can you find the best cars loans?
In any metro area, there are dozens, if not hundreds of different auto loan companies just begging for your business. You just need to know where to look. It is often hard to determine which the best option is for you and your driving situation, which is why more and more people simply go with their dealer finance plan and forget it.
Know your options
There are other ways to finance a car than just the traditional dealer financing option. Although dealer financing is most likely the easiest option, it is also usually the most expensive. There are several others, often more economical options out there. Most of these involve getting your money from a bank. For starters, you can use equity from your home if you are currently paying of a mortgage. This can be determined through a line of credit or a home equity loan, which may end up cheaper. Talk to your Toronto financial institute about your options. Other options include a revolving line of credit, credit card, personal overdraft and short term financing.
Use an online wizard
Compare and calculate with various online wizards. You can get quotes from several different financing and insurance companies with a few simple questions. You will be able to find out the best auto loan for your situation depending on your age, your driver history, driving frequency and of course your credit score. It is imperative to know your credit score before shopping – you will know roughly what interest rate you can expect (and therefore know if a rate is artificially high) and prevent unnecessary applications for credit – every one will lower your score a bit, and many dealers reflexively run them. Spend a couple of minutes on the net and you could save hundreds of dollars a year or more. Seemingly small fluctuations in interest rates really add up over 3 or 4 years.
Understand the Terms and Conditions
When it comes to finding a car loan, it may seem like the representative is speaking a different language. You probably just want to get through the paperwork and get your new car on the road. However, you need to slow down and stop. Before you get the green light, you need to read the fine print regarding the term of the loan (is it one year? Is it five years?), interest rates (variable or fixed rates), insurance, repayments (are you on a weekly or monthly plan) and other fees and charges such as annual fees, paying the loan early fees and especially defaulting on a payment fees. All of these terms and conditions must be discussed when determining the best car loan in Toronto. While it is a bit more effort to be prepared, if you think about it in terms of money saved versus hours worked, it will easily amount to $50 to $100 an hour or more, so take the time before you buy.