Car loans aren't only available for brand new cars. The used car market in Canada is extremely robust. Many Canadians are finding great deals in this space and getting approved for the auto financing they need.
There are a few important considerations to make before you try to get approved for car financing on a used car.
3 steps to getting a used car loan in Ontario
1. Assessing your budget
Even before you set foot in a car dealership or bank, you will want to take a closer look at how much you will need to budget in order to afford your vehicle. Like buying a new car, you need to take into account the cost of not only the monthly loan payments, but also the insurance, gas, and maintenance. If you decide to make a down payment, that should also be factored in.
2. Deciding on your term
After you have developed your budgeting plan, you need to decide how many months will it take you to pay for the car. You can gain a better understanding of how much you can afford every month with our car loan calculator.
3. Choosing a lender
Deciding where to apply for an auto loan can seem like a daunting process, especially if you don’t know where to look. Traditionally, car dealerships and financial institutions are the first places borrowers think of, but these lenders can be somewhat limiting with regards to who they give loans to.
Alternatively, Canada Drives helps individuals facing all kind of credit situations. This online services provider connect customers with national lenders and local dealerships that know how to help. Now it's easier than ever for drivers with poor credit to get approved for the car finance they need.
Here's how Canada Drives works:
- Complete our fast online application. It’s FREE to apply, only takes 2 minutes, and is 100% secure. We DO NOT NEED your Social Insurance Number (SIN).
- Once you get pre-approved, one of our experienced finance consultants will help find you the most affordable deal.
- We'll match you with a dealership in or near North Bay that specializes in bad credit auto loans.
- Within 48 hours of applying, you will be connected with dozens of nearby cars, trucks, vans or SUVs to choose from. Then, simply pick your vehicle and drive away!
What to watch out for when buying a used car in Ontario
Purchasing a vehicle is a big decision, but these steps can help simplify the process:
Know what you can afford
If you already have a vehicle in mind and are aware of what it costs, you will be able to identify how much to budget. During this step, you will want to also keep in mind how much you can actually afford and not choose a vehicle that is valued too high. If you pick a car with a monthly payment that's not affordable, you'll either get declined for finance or you'll stuck with a monthly payment that's simply too high. This is why more and more Canadians are choosing to get pre-approved online before they pick out a car.
When you get pre-approved online, a lender (such as Canada Drives) will tell you what price range you can afford so you can shop for your next vehicle with peace of mind. Canada Drives will even match you with a nearby dealership with dozens of options based on your preferences and approval amount. And the best part? There's no obligation to purchase; if you don't like the car, you can simply walk away.
Check the book value
It is also important to take note of the book (or listed) value of the used vehicle you are considering. This is critical as you do not want to end up paying more for the car than you have to. The internet is a great source of information, helping new and used car buyers gain a greater understanding of the value of a specific vehicle. The main information you will need to know to help determine this value includes the vehicle’s make, model, year, mileage, and the overall condition of the vehicle itself. See Canadian Black Book to enjoy the best price transparency.
Request a vehicle history report
Always remember that used vehicles don’t come straight from the manufacturer. Before committing to a used vehicle, buyers need to be aware of its history. Otherwise, you could end up with a car that’s barely roadworthy. With most dealerships, any car you look at will come with its own vehicle history report. The vehicle history report will let you know if there have been any past problems with the car you have your eye on. Private sellers are not obliged to offer vehicle history reports to interested buyers, so make sure you ask for it or download it yourself.
Ask about the vehicle emissions test
In Ontario, all vehicles aged seven years or older are subject to a Drive Clean emissions test every couple of years. If you have the vehicles VIN, you can check the testing history on the Drive Clean website. Or, you can ask the seller to perform a Drive Clean emissions test to confirm there are no emissions problems before you buy.
Look at the Used Vehicle Information Package (UVIP)
With the UVIP, you can check the lien/debt information. This is mandatory and must be provided by the seller.
Examine the vehicle
It’s important to know what you’re looking at when you go to view a used car, especially when you’re working with a private seller. Follow these steps to ensure you cover all your bases and find a vehicle that’s worth your hard-earned money.
Should I buy from a private seller or dealership?
You need to decide if you’ll buy a car from a dealership or one from a private seller. There can be advantages and disadvantages to both, and you should be aware of these before moving forward.
A credible dealership is more likely to have done a proper vehicle inspection and servicing, whereas a lot of private sellers will not take such measures. If you discover that the car has a problem, you can go back to the dealership and they will address the situation. In the case of a private sale, this may not be possible.
One of the luxuries of working with a car dealership is that your dealer will organize all the paperwork and ensure that everything is in order before you drive off the lot. In a private sale, it's up to you to ensure all paperwork is complete.
If you are in the market for a used car and want to get approved for a car loan, Canada Drives makes it easy. Regardless of your credit situation or what town, city, or province you reside in, Canada Drives can connect you with the best used car dealerships in your area. Apply online and get approved today!