CanadianCL“Approximaely 87% of new cars purchased in 2012 were financed with Canadian Car Loans”. These… nationwide loans offer some of the best car finance terms for new car loans and used auto loans. Buying a car in Canada, is an exciting time. There’s a lot to think about when it comes to Canadian car loans. Unless you’re able to pay cash for the vehicle, you’ll need to cover the costs associated with new car loans or used car loans over a period of time. Canadian car loans are most common way of paying for a car over time. These nationwide loans offer some of the best auto loan rates and car finance deals. The subject of Canadian car loans can be a little intimidating. Here are some key things you should know before you sign your car finance purchase contract.

1. Know and understand your credit rating.

Everyone’s credit history is a result of how they are paying off previous debts. Qualifying for the best auto loan rates for Canadian car loans is challenging enough. Before you look for best car finance rates, understand your credit status or “rating” before you make an offer on a car.

  • Excellent credit - people with a perfect credit record. They have a proven history of making payments on time and paying off debt in a timely fashion. This usually allows prompt approval for Canadian car loans and may qualify for best car finance rates.
  • Bad credit - refers to people who have a history of late or missed loan payments. Credit approval may take longer, or may require searching for the appropriate lender. Interest rates could be affected. Canadian car loans for bad credit car finance are available at dealerships offering bad credit car finance.
  • No credit - refers to people who have no, or very little, credit history. Many Canadian car loans no credit car loans and offer reasonable car finance rates. Many of these people usually are young, new Canadians and students. Because there is no established history for these individuals, anyone who considers advancing credit to them must assume some risk. This can mean higher interest rates or credit refusals.
  • Bankruptcy - refers to people who have declared bankruptcy in the past. Canadian car loans for bad credit car finance are available at dealerships offering bad credit car finance. Bad credit car finance is common but credit approval tends to be more difficult and bad credit car finance rates are higher.

2. Know how to obtain your credit rating.

There are many ways to obtain your own credit report, including by mail, by phone, in person or online. There are two credit reporting agencies in Canada; Equifax and Trans Union who both offer this service. Canadian car finance rates are depended on your credit rating. Often repairing credit is easy and improves your chances for the best car finance rates for Canadian Car loans.

3. Know what’s involved in “zero percent financing”.

Zero percent offers are popular, and tempting. They may, however not be the best car finance deal, meaning paying more for the car. Be sure you understand the complete cost and implications of a zero percent arrangement before you go ahead.

4. Know about additional fees.

All fees must be declared by the dealer. Be sure you understand the car finance fees charged for “administration” or “documentation” services, which cover the dealer’s cost of preparing the paperwork.

5. Know about financing versus leasing.

With leasing, it might be the best auto loan rate and paying less per month than you would with financing. But you will not own the car without a “buy-out”. Be sure you’re aware of the amount of the car finance buy-out as well as any end-of-lease obligations (like mileage and/or damage charges).

6. Know about the time involved.

If you’re buying a car for an immediate need (such as an upcoming trip), allow sufficient time for application and approvals. Generally, you can expect an instant decision when your car finance application is processed. The approval process could require additional time depending on your situation and car finance deal.

7. Know how much you can borrow.

It helps to know what your budget allows for and how much credit you can obtain. Be sure to have your numbers figured out before you shop, and before you fall in love with a vehicle you really can’t afford.

8. Know which words to be wary of.

The deal may be tempting, but if it’s accompanied by terms like “Going out of business”, “bankrupt”, “fleet sale”, “closing” – be certain you get a full explanation. Car finance deals may or may not be the best car finance deal for you.

9. Know that your contract is final.

Remember to check if there is a “cooling off period” before you sign a contract. Once you’ve signed the contract, you’re expected to fulfill the terms of the car finance arrangement. You may be able to negotiate car finance terms for an auto loan refinance – but only before you sign the contract. Be sure to read the contract in detail and ask if anything is unclear.