If you look up Canadian auto news for the previous year, one of the thing you will see time and again is reports on massive drops in car sales, particularly towards the end of the year. This dip in figures is in part attributed to the fact that Canadian banks, the Bank of Canada included, raised their interest rates.
The increase in interest rates (between 1.25 and 1.5%) seem negligible, however given the stated increase is on an existing mark up, 1.25% – 1.5% could add up to a lot in Canadian dollars. Furthermore an increase of this much means Canadian car buyers end up paying a lot more interest cumulatively.These two things makefinancial matters a little more complicated for Canadians looking to buy cars in 2019.
As a Canadian car buyer, despite having put aside money and made certain arrangements, you might still be falling short on the finances required to buy your car. Even if your credit scores are in your favor, you might not want to end up taking an auto loan that could potentially break you from a bank.
The question is, what do you do? How do you buy that car you’ve been working towards?
If you’ve been thinking of buying a car and are not really wealthy, it’s probably something that has been in the pipeline for a bit. You might have already made arrangements and saved on finances for your intended car purchase.
What you need now is that last push to take you across the finish line – more specifically you need to go the extra mile with your saving. You need to be financially clever and here’s how you do it.
If you’re trying to save a little extra, don’t be hasty about your decision to buy a car. Be diligent. Start be taking a minute to think about what your needs are. Do you prioritize space, aesthetic, fuel efficiency, speed, some other vehicle attribute maybe? Be very clear on what you require out of the car you’re about to invest in. Once this is done, proceed to search for options.
Being clear on the kind of vehicle specifications you are looking for allows you to navigate your options better by way of budget and getting your money’s worth. Make sure you know what to want before looking about.
Different automobile brands offer different features and specifics. You might have ideas about the kind of car brand you want to go for but this may have nothing to do with actual functionality. When it comes to cars, we sometimes make the mistake of prizing brands over other factors like how appropriately the vehicle suits our needs.
Don’t do this. If you are clear on the kind of vehicle specifics you are looking for, explore different brands. You might find a car which suits your specifications ideally built by a different manufacturer than the one you had in mind. At times, being flexible by way of the manufacturer whose vehicle you purchase allows you to save a whole lot.
Further, you’re not really compromising by way of functionality at all. By considering different brands you could get the engineering and specifics you want at a better price.
When you go out to buy a car (or anything else), it is easy to get blown away by the choices and options that are offered to you. A car salesperson’s job is to excite you, entice you and eventually sell you a car. Fancier cars might fetch better commissions and when it boils down to it, the salesperson needs to look after themselves as much as they have to look after you.
For this reason, it is not uncommon for people to get excited or rushed by what seems like a sweet time based deal and make irrational purchases. The problem with this is, when the excitement dies down, the car you have on your hands might be costly to drive, impractical and simply not a good fit. It could also end up costing you a lot more during purchase than is manageable.
If youwant to save money when you buy a car, don’t be hasty!
When you’re doing the costing for the car you’re looking to buy, remember that your insurance costs vary depending on the vehicle you purchase. Further, where you get your vehicle insurance from also plays a part.
If you have a vehicle or a few options in mind, look up insurance rates online so you have a clear idea of the figure you’re working with. If it seems unmanageable, maybe switch your vehicle choice to plan B and try again. If you’re set on the vehicle, model and make and have found out an estimate of what the insurance will be like, look into insurance companies and settle the particulars you can in advance.
Don’t just rush into whatever insurance is offered to you at the dealership. Sorting it out on your own saves money.
When you go to buy a car, the salesman might try to throw things in and add to the deal you’re already making. This could be anything from custom paneling (on the physical side) to extended warranties (on the financial).
Though some of this might seem tempting at the time, if you’re looking to save money on that car purchase, don’t go for any of it.If you really need to make additions to your car you may do so later. Further, if you’re worried about potential repairs and feel the extended warranties are a good idea, trust us they aren’t. You can cross the repair bridge when you reach it and probably find a good auto mechanic closer to home!
Look for the simplest deal you can find. No extras. No add-ons. It’s one of the best ways to keep your costs manageable.
There was a time in Canada, say a decade to a decade and a half ago when buying a used car was shady business. It was hard to tell what you were buying, who you were buying from and if the price was right among other things.
According to one online report published by CTV News, the fact that buyers today have access to more information and choice has led used car dealers and dealerships to step up their game. Used car markets today are more reliable than ever due to increased transparency regarding the condition of automobiles sold as well as sale prices.
Furthermore, the fact that used car markets have become more competitive has led to the possibility for many buyers to find vehicles in brilliant condition available at very reasonable prices.
Lastly, for those who may not know much about Canadian finance, auto loans for used cars are a thing!
Getting an auto loan or financing for your car as we discussed earlier is tricky business. Apart from the fact that you need good credit scores to receive an auto loan, you need to get an auto loan from the right place. The rates you received again might also be tied in with your existing credit scores.
As we mentioned earlier, banks have increased their interest markup and are extremely fussy about who they issue their auto loans to. Further, the wrong bank loan can hang like a noose around your neck for a lot longer than is necessary.
There are other options such as credit unions that in many cases may offer better loan rates and options than most banks around you. Alternatively, there are also financial institutions such as ours. We work to facilitate loan approval for clients on a case by case basis. We do this in a number of ways depending on the client’s credit scores as well as personal requirements.
This is possible as we work closely with numerous loan issuing institutions and car dealerships. We don’t just connect our clients with the right loans. We help with finding car deals, selling old vehicles and doing everything to facilitate the process of buying a new car for our clients. Finally, even in instances where clients might not be eligible for loans from elsewhere, we have our own internal financial channels to personally help those we work with purchase the cars they want.
If you connect with a financial institution such as ours, you stand to save a lot of money by streamlining your processes.
This may not always work however in many cases it does. The trick here is to go in for your car or automobile purchase towards the latter half of the month. The closer to the end of the month you buy your car, the better it is for you by way of finance.
This is because many dealerships set personal monthly sales targets for their employees. Where some dealerships offer further incentives upon crossing these targets, others simply have a required minimum.
Employees working for dealerships where the only requirement is meeting the required minimum are more inclined to offer you discounts and price cuts when they have done their bit. In other words, around the last week of the month!
You might be someone who has an old vehicle in decent condition that you want to get off your hands before you buy a new one. There are two ways you could go about this situation. One is by selling your car to one dealer and using the money to buy from another.
If this is the route you’re looking to take, don’t discuss the sale of your old car or related specifics with the new dealer. This might backfire when you’re trying to ask for a discount or a better price.
On the flipside, if you’re looking to trade in, just be careful that you do so via a reliable mediator. Trade ins can be tricky business which end up costing you a lot instead of helping you save.
The best way forward is usually to sell your old car to a dealership before you buy a new one.
Finally, regardless of who you approach for your car or auto loan, the basics will be the same. You will receive a loan for which you need to put down a certain initial amount. Following this, you will need to pay a monthly sum for a pre-decided period of time until the cost of your vehicle and the loan markup have been returned in full.
When looking for the right car loan, it is easy to get confused and make your calculations based on monthly payments. Don’t do this. Sometimes keeping your monthly payments higher so you can free yourself of debt quicker is not a bad idea. Especially if larger monthly payments offer a reduction on the total or overall markup.
As opposed to focusing on monthlies start any and all calculations keeping in mind the total price of your vehicle with the required additional costs. Doing so will help you pick a loan that saves you money. Keeping monthlies low will cost you more in the long run!
The tips and pointers have been discussed keeping in mind you’re looking for an auto loan or are looking to buy a car in Canada. Some of the tips above might not apply to those south of the border and in other parts of the world however some are also quite standard.
In any case, just remember that even after you’ve cut back on your power bills and didn’t get that new pair of boots this Christmas, cars can still cost a bomb! That being said, the tips above should help you ensure that you get the car you want and stay within budget!