Buying a car is a daunting experience, especially for first-timers. However, once you understand the process behind it, especially once you comprehend the whole procedure behind car loaning, it can be a thrilling and rewarding experience. Loaning a car can help you afford cars that you might not be able to otherwise, but it is important to apprehend the process behind it before you get enthusiastic about car shopping.
What a car loan is, in essence, is basically borrowing someone else’s money to purchase a car. You then pay back that money on an installment, but with interest serving as the fee for borrowing the lump sum. Of course, if you’re talking about a beater you can generally pay for it directly with cash. But when we’re mentioning a lightly used modern car, financing it through a loan will be one of the best method to pay for the car.
Research
If you’re looking to apply for a loan, it’s likely that you should have already formed a general idea of what you want and what you’re looking for. You should also have done your research and identified the amount you’re able to spend monthly on a vehicle. This is where you begin to shop around for a reputable dealership. The easiest way to know whether if a dealership is trustworthy is to discern what lender’s network it works with. A venerated dealership would work with only massive and revered loaners that they liaise with closely. Garston Motors, for example, works the best auto loans lenders like Canada Trust, National Bank of Canada, Carfinco and Auto Capital.
Getting you approved
Once you have grasped a firm idea of what you want, and are ready to proceed to the next step, cooperating with a dependable dealership is critical. The best car dealership will be negotiating and drive for a lower interest rate. If you’re earnest about the purchase, have a good credit score and has an extensive credit history to back you up, lenders will likely want to fight for your business and propose attractive interest rate.
To receive a quote from the loaner, you will of course have to fill out a loan application form. Don’t be afraid to apply to multiple loaners at once, in fact, doing so in a short period is more beneficial to your credit score than spacing out your applications. It will generally include a lot of information regarding your financial background and employment history, and answer it truthfully. Otherwise you risk getting rejected or worse. If you do get rejected, the loaner is legally required to inform you of the reason they declined your application, and learn from the reason, inquire if you have to.
Afterwards, before you get the green light, you will have to sign the loan documents. This is where you should take all of the time you need and read the fine print. Ensure that everything is as discussed prior, and never hesitate to ask questions if there’s anything you’re uncertain on.
Of course, rather than waiting for a dealership to offer you a loan, if you know what you’re doing you can apply for a loan standalone. This is also known as a pre-approved car loan. If you manage to secure a pre-approved loan before you go shopping, you will be at an advantage as the dealer has to fight for the financing rate offered by the loaner you sought for. Once you have a car loan and have your car, it’s always a good idea to insure your car to save yourself and satisfy your loaner alike. Else, the loaner may purchase a costly insurance coverage to cover their collateral.
This only covers the surface of the entire process. If you’re still intrigued, do contact us at Garston Motors, as we have our own financing experts that can provide you with advice and answer your questions. Even if you have a bad credit score, you can still apply for a reasonable car loan. Therefore, if you’re struggling with poor credit, or intend to explore your financing options, talk to us and we’ll try our best to sort you out with a deal you’re content with.