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How to buy a car in Cambridge on a pension

How to buy a car in Cambridge on a pension

If you are on a pension and need to buy a new car, it can be challenging to find something that works for your budget.

Inflation is driving up the price of new and used cars, so you have to come up with a game plan if you want to find something that meets your needs and budget.

Our Cambridge car loan team has a lot of experience dealing with this type of buyer so offers a few words of wisdom to help.

Income vs expense

Start by listing all of your sources of income, are you receiving a private pension or strictly the Canada Pension Plan and Old Age Security?

Most Canadians receive a mix of public and private but each person has a unique situation.

Add up all of the income you have and then subtract your current financial obligations. The balance is what you have available to put towards a new Cambridge car loan.

Since your income is stable and predictable, prospective lenders will be eager to do business with you.

Credit score: where do you stand

The biggest potential hurdle that you will need to overcome is whether your credit score is high enough to qualify for a prime interest rate car loan in Cambridge.

Since you are retired, most of your debts have been paid off so you may have little to no debt. This lack of debt is a great position to be in but it does not help your credit score. There are free applications that let you look at your credit score, so take a few minutes and review it now.

If your credit score is lower than 700, you should think about either paying down the current debts you have or adding more credit so your total credit utilization is below 30%.

Aside from paying your bills on time, the total amount of debt you are carrying can hurt your credit score. The premise is that the more debt you have, the greater the risk of default.

By either reducing your debt or increasing the total amount of credit you have, it helps lower the credit utilization making you appear less risky.

Getting the right car

The new and used car marketplace is experiencing a chronic shortage of vehicles. You will need to schedule an appointment with a local dealership to see what options are available.

The dealership can help with scheduling a test drive but they also can give you expert credit building advice. By speaking with the credit professionals at the dealership, they can give you an overview of what steps you should take to help boost your credit score.

If your credit score is not where it needs to be but you own your home, the dealership may be able to find a lender who can work with you. By taking equity out of your home to finance the purchase of a car, you may be able to get a lower interest rate and buy the vehicle you want.

Since we covered how you can buy a car in Cambridge on a pension, you can pick up the phone and book a test drive.

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

Categories: Car Loan

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