How to Find a Great Low Interest Car Loan in Canada

How to Find a Great Low Interest Car Loan in Canada

Posted on January 27, 2023

The car market in Ontario, and the rest of Canada, is experiencing unprecedented growth. There is a shortage of new and used cars, fueling increased demand. If you are in the market for a new vehicle, you can get a great low interest car loan in Simcoe, provided you're willing to be flexible.

Waiting period for new cars

Due to the shortage of semiconductors, it can take weeks for your new car to be delivered if you have very specific requirements.

However, if you are flexible, you can buy a new car today. It would be in your best interest to buy a car today, as interest rates will start to rise.

The Bank of Canada has indicated rates have to rise to curb inflation. During the pandemic, the Bank of Canada kept interest rates artificially low and pumped money into the economy.

When interest rates begin to rise, it will drive up the borrowing costs of all financial products, including car loans.

How to negotiate a competitive car loan in Simcoe

There are three components of a car loan in Simcoe. The first is the amount financed, interest rate, and term of the loan. If your budget is tight, you can extend the loan term.

By extending the term, the monthly payments are reduced, which makes the loan more affordable. The downside of a longer-term is you end up paying more interest.

The amount financed is the money you borrow to pay for the car. If you are flexible, you can shop around until you find a vehicle that meets your needs and is priced just right.

The last component is the one that deserves the most significant attention, the interest rate. Rates are low, but to access them, you will need to find the lenders that offer the most competitive rates (we will show you how to find them in a bit)

What constitutes a qualified borrower?

The first thing that is required is a verifiable source of income. Lenders want to know how much you are making and whether it is consistent.

If you are working a typical 9-5 job, the lender would look at your payslips and how long you have been with the current employer.

Most Canadians now have a side hustle, so you will need to bring along information about this income source.

The most accepted way to prove this income is with your bank statements.

Having Good Credit is Key

To qualify for a great low interest car loan in Simcoe, you will need a credit score near 700. The higher your score, the lower your interest rate. Having a high credit score is not enough. You will also need a solid income.

Lenders are worried about taking on bad loans, and will carefully assess every application. To satisfy the income verification portion of your application, you will need to provide bank statements and pay slips.

Head to a Dealership

The only way you can access the lowest car loans in Ontario is with the help of a dealership. Dealerships have the ability to access wholesale lenders and pass the savings on to you.

The dealership can also help you find a loan if you are experiencing credit issues. You will need to contact the dealership and explore your options. It will be the best call you make all day.

Just remember that interest rates are going to rise, so you need to find a new car fast, or you could be priced out of the new car market.

We’d love to help you find the perfect car loan. Simply fill in the form below and we’ll get back to you ASAP! 

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