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How to Buy your First Ever Car in Ontario [2022]

How to Buy your First Ever Car in Ontario [2022]

If you are looking to buy your first car, these tips are going to help you make a better-informed buying decision. There are a few questions that we need to run by you before we get started though.

 

Are you applying for financing by yourself or with another person?

 

Since you're going to buy your first ever car, perhaps you do not have well-established credit . One way you can save money on borrowing costs is to have someone with strong credit cosign the Kitchener car loan.

 

This cosigner would need to have sufficient income to repay the car loan plus all of their other obligations; the interest rate would be considerably lower.

 

Should you be unable to find someone with strong credit to help cosign for your loan, you could try to secure a competitive car loan on your own.

 

Pulling your credit report from TransUnion and Equifax

 

You are not doing a hard pull when you access your own personal credit report. Your account is only impacted by a “hard inquiry” if you apply for a credit facility from a third party. Too many credit inquiries in a short amount of time will hurt your score.

 

Credit scores will range from 300 all the way up to 900. Most Canadians are in the mid to high 600’s; if your score is over 700, then you will have no problem securing a competitive car loan from most lenders.

 

Assessing your finances

 

After you have looked over your credit report, the next item is your finances. Having good credit can help you get approved for a car loan in Kitchener, but you also need to have adequate income.

 

Lenders will want to know how much money you are earning monthly and also what are your current obligations.

 

You cannot have more than 35% of your total income go towards servicing debt. This is called the debt-to-income ratio.

 

When calculating this ratio, you must also include the projected new car loan.

 

If you are not sure what to put in, the median car payment in Canada is just under $600, so you can use that as a safe number.

 

However, once you have added that to your calculation, if you are over the 35% threshold, you will need to look for ways to reduce your debts by either paying them down or increasing your income.

 

How to access the most preferential car loans in Kitchener

 

The only way you can access the most preferential car loans in Ontario is to work with a reputable car dealership. Local dealerships must exceed industry standards set out by OMVIC.

 

The dealership is going to help you qualify for the most competitive car loan, but it goes further than that.

 

You can test-drive all of the different cars at the dealership until you find the one that you love the most. Once you have found the car you want, the dealership will shop around to get you a competitive loan based on your circumstances.

 

This level of personalized service is not something you can find online and is just another reason to visit a local car dealership.

 

We’d love to help you buy your first ever car. Simply fill in the form below and we’ll get back to you ASAP! 

 

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    Categories: Car Loan

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