3 Key Things First Time Car Buyers Need to Know in 2023

3 Key Things First Time Car Buyers Need to Know in 2023

Posted on July 25, 2022

There are certain defining moments in a person’s life, none quite as exciting as buying your first new car. The concept of buying a car is fairly straightforward, but if you have the right approach, you can get the car you truly want at competitive terms.

Our Brantford auto loans team are here to help.

It’s a numbers game

While it borders on cliché to say that buying a car is a numbers game, it truly is one that involves a series of important numbers starting first with your credit score.

In Canada, your credit score ranges from 300-900; the median score is in the 660 range, so anything north of 660 and you are in great shape.

If you don’t know what your credit score is, you can check it with Credit Karma (it’s free) before you do anything else.

The last thing you want to do is fall in love with a car only to realize that you cannot get approved for the loan because of issues with your credit score.

If your credit score is low, you should look for any potential mistakes inside your report and address them immediately.

These errors could be weighing down your credit score, making things needlessly expensive.

Documenting your income

After you have worked through the credit issues, the next thing item is your income. Lenders use credit to assess how responsible you are with your finances, but they need to understand how much money you are earning on a regular basis.

Lenders will look at your monthly gross income before taxes or anything else and take that amount, multiply it by forty percent, and that is the maximum debt-to-income the lender can approve.

If you earned $10,000 per month, then your total debt, including any new loans, cannot exceed $4,000.

If you are like most people in Canada and have a side hustle, then you must show bank statements and income tax returns that reflect this income.

Lenders are trusting, but they must verify everything before they approve a car loan.

Finding the best deal on a new car in Brantford

Who doesn’t love a good deal? Your friends probably told you to shop around online, and that is great reviews, but when it comes time to actually go and purchase the vehicle, then you have to “shop local.”

You shouldn’t buy a car online, even though you could, in theory, the local dealership will look at your financial profile and reach out through their extensive network of lenders to find the organization that will give you the most competitive deal.

The dealership wants you to have an amazing experience with them, so you come always go to them for your vehicle needs and share your experience with family and friends.

While you’ve read the reviews, the only way you can know with any measure of certainty whether a car is right for you is by taking it out for a test drive, so head on over to your local dealership today and start the process.

When you’re ready for a car lease or loan, get in touch with the Brantford auto loan experts at Northway Ford for great deals on auto finance.