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Common mistakes to avoid when shopping for a used car loan in Hamilton

Common mistakes to avoid when shopping for a used car loan in Hamilton

If you don’t have the budget to purchase a brand new car but need a more reliable, fuel-efficient vehicle, then you should consider buying a good quality used car.

The used car market in Canada is experiencing unprecedented growth, which is great news for car sellers, but as a buyer, you will need to exercise a greater degree of caution.

Stay with our Hamilton auto loans team until the end of this conversation, and you should be able to find yourself a good deal on a top-notch used car.

Steer clear of private used car sellers

The single biggest mistake you can make when trying to buy a used car in Hamilton is to buy from a private seller.

There are websites like AutoTrader and Kijiji Autos, which private citizens use to sell their used cars and while you could, in theory, find a good deal, the risks of getting stuck with a lemon or ripped off are just too great.

If you bought from a private seller, you are not protected by the same consumer protection laws that cover you when you deal with a licensed and bonded local business.

Financing the purchase of your used car

When trying to finance the purchase of a used car, there are some important things you must take into consideration.

The first is that traditionally, the interest rate on a used car loan is higher than what is being quoted on a brand new car loan.

The reason for this is the amount of work that goes into underwriting a used car loan is essentially the same as a new car loan but the amount being financed is considerably lower.

Since the amount of money being financed is lower, the lender has to charge more upfront to cover the overhead costs.

With new car loans, the carmaker usually offers financing and has access to capital at a lower rate than what traditional used car loan providers can secure; this is why used car interest rates are higher, even if you have good credit.

Credit score needed to get a good used car loan in Hamilton

The used car marketplace is in a state of transition. If your credit score is 700 or higher, you should have no issues finding a lender that is willing to give you the most competitive terms.

If your credit score is under 700 but over 600, you can secure a decent car loan, provided your income is sufficient to qualify.

Who has the most competitive used car loan terms in Hamilton?

When looking for the most competitive used car loan terms in Canada, you should check out your neighbourhood dealership.

These local dealerships can access lenders that are not available to the general public and can also give you top dollar trade-in value for the current vehicle you are driving.

If you really want to save money and get a great deal on a used car loan in Canada, head on over to your local dealership now and start reviewing the options that are available to you; it is going to be the best decision you made this month.

If you need help or advice on anything to do with auto loans in Hamilton, contact Car Nation Canada today, we can help!

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