Hamilton Car Loan Myths Busted
Hamilton Car Loan Myths Busted
Posted on January 12, 2021
It’s a new year and hopefully, a new beginning. Many of you will be considering a new car this year and we are here to help. We begin doing that by busting 5 common car loan myths we hear often when dealing with customers.
Auto finance is a complicated subject with many confusing terms and a whole lot of paperwork. We do what we can to ensure you know what you’re getting into as much as possible. This blog forms part of that effort.
So what are those 5 car loan myths that need busting?
- You can’t get a car loan after bankruptcy
Not true. You can access auto finance after bankruptcy. It will be expensive and will require the use of a specialist lender but it can be done. You can expect close scrutiny of your financial affairs and be required to prove you can afford repayments but you can definitely get a car loan after bankruptcy.
- You can only get car loans from the dealership
Not true. Dealerships will often have access to subsidized finance or have relationships with lenders that get great rates, but they aren’t your only option. You should shop around for an auto loan whenever you consider one. If nothing else to show you exactly what’s out there.
Once you have shopped around, check out our deals. We are confident that our auto loans are some of the most competitive around.
- Shopping around for car loans will impact my credit score
Not true for the most part. If all you do is use auto loan calculators or go for pre-approval, your credit score should not be impacted. If you actually apply for car loans hunting for a good deal, this can impact your credit score.
Loan calculators do not usually query your credit report. Pre-approval performs a soft inquiry on your credit report that does not impact your score. Loan applications perform a hard inquiry which is recorded and which can lower your score.
- I need a down payment to buy a new car
Not true. We recommend using a down payment with an auto loan but it isn’t mandatory. There are come very competitive no money down loans out there that don’t require a down payment.
No down does mean a higher monthly payment, a higher loan amount and a risk of going upside down but it is still a relatively safe way to buy a car.
- You should always go for the lowest monthly payment
Not necessarily true. You should always go for the loan with the lowest interest but not necessarily the lowest payment. That’s especially true if the lowest payment requires a longer loan term.
As interest is charged over the term, your monthly payments may be lower but the overall cost of the loan could be much higher. If you have no choice, this is an option but if it can be avoided, it makes sense to pay as little interest as possible even if your monthly payment is slightly higher.
If you need help with any aspects of auto loans, you know where to come!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!