How Does Financing a Car Work in Ontario Canada?
Financing a car is a popular option for many car buyers as it allows the buyer to have reliable payments over a period of time rather than having to pay the full balance at the time of purchase. When it comes to purchasing a new or used car most people will either obtain financing through their car dealer or at a bank. In this article, we will help break down what you should know about auto financing as you prepare to finance a vehicle at the dealership or through your bank.
How Does Auto Financing Work?
Financing a car works by allowing you to choose a down payment amount and then having your regular payments be set with the current interest rate. The interest rate of a vehicle can vary and will depend on factors including your credit history as well as if the vehicle is new or used. Financing makes your life easier by giving you payment options including weekly, bi-weekly, or even monthly allowing you to pick an option that works best for you.
Should I Finance a Car Through a Bank or a Dealer?
When it comes to obtaining an auto loan, choosing to finance at the dealership can be a convenient option. By financing with a dealer who works with major Canadian banks, you can eliminate some of the back and forth when it comes to getting approval and have access to the best rates all in one place. You may also qualify for promotional rates at the dealership that you would not otherwise receive at a bank.
At the dealership level, a financing manager will assist you with the credit application walking you through the process and ensuring that the terms of your auto loan suit your needs. It can be helpful to finance at the dealership to save your time and ensure you get the vehicle you desire at terms you are comfortable with.
What Is a Good Finance Rate for a Car?
From time to time dealerships will offer promotional rates for auto loan financing that could be as low as 0%. Your best financing rate for a new car will often be the promotional rate offer by your dealership. In most cases, these rates will be lower than what you could expect from a bank.
What Is a Good Finance Rate for a Used Car?
Many people ask if it is possible to get low or even 0% financing rates for used cars. As used car financing goes through the rate at the bank you cannot expect 0% financing at a bank. Though it will vary you can expect approximately 6.99% on a used vehicle at the standard rate. If you are wondering how much will a bank finance on a used car, the answer will be dependent on your credit history and other factors. In many cases, banks will finance a used car for up to 65 months and the amount will be dependent on what you qualify for.