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When you Buy a New Car in Dunnville, Remember this.

When you Buy a New Car in Dunnville, Remember this.

If you are in the market for a new car in Dunnville, these are some of the most common mistakes you should avoid.


Unfortunately, while some of these suggestions might sound like common sense, there are some Canadians who are not aware of these things.


Your local bank will not give you a great deal


Your local bank is great at processing your direct deposit payroll or helping you save money on a mortgage, but the big 5 banks are not going to give you the best deal on a new Dunnville car loan.


These loans are small dollar amounts compared to mortgages, so the banks tend to charge a higher rate to offset the costs that come with underwriting these loans.


You may be scratching your head; why would a bank that has access to prime interest rates from the Bank of Canada charge a higher rate on a car loan when they get such a good deal from the government?


These banks have to lend large sums of money in order to generate a profit, these banks have a lot of overhead to cover, and their margins are razor-thin.


When they issue a mortgage, it could be anywhere from $500,000 to $1,000,000 or more while the average car loan is around $50,000; if you had to choose which deals would you focus on?


Banks are happy to issue credit cards because they are generating in excess of 20% per year from those products, but car loans are not that profitable.


How to get a great deal on a loan when you Buy a New Car in Dunnville


We covered why the big banks are not going to give you a great deal, there are lenders who will, but you need to do some preliminary work on your end.


First, do you have good credit? To qualify for the best car loans in Dunnville, your credit score should be in the 700 range; the higher your score, the lower your interest rate.


Your credit score is important, but we also need to take a closer look at your income.


Lenders are being extra careful and have modified their maximum debt to income ratio that they consider acceptable.


The average car loan is well over $500 per month, so your budget needs to have enough room to cover that payment plus the costs of running the vehicle.


Working on the premise that your income and credit score is good, you still need to find lenders that will provide you with a competitive offer.


From our experience, the only way you can access these lenders is by going through a local dealership with a great customer satisfaction track record.


Dealerships are a great source of car loans for lenders, and lenders offer dealerships access to wholesale lending.


This means you can get a lower interest rate compared to what you would be quoted if you tried to get the loan by yourself.


You will need to take the first step, though, and reach out to the dealership and start reviewing the various available car loan options. Even if you have credit issues, the dealership is going to help you get approved, so contact them today.


We’d love to help you buy the Perfect Car in Dunnville. 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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