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Why you should Consider Trading in your Car in Brantford

Why you should Consider Trading in your Car in Brantford

There is a chronic shortage of new and used cars in the economy. This shortage has been caused by the pandemic and massive strain placed on the global supply chain. Our Brantford auto loans team explains why the auto industry has changed so much and why that makes trading in your car a great idea.

 

Car buying cycle-macro level

 

Don’t let the heading intimidate you, we are just going to take a high-level approach. The average Burlington car loan is 5 years, at the end of that term, most car owners will trade in that car and buy a new one.

 

The car is traded in and then sold to another buyer and the person who sold the car purchases a new one.  This has been the cycle for the better part of a decade with some minor hiccups along the way.

 

So, what changed? The people who bought used cars were usually in the same area as the person who sold them.

 

That is no longer the case, with countries like Africa and the rest of the developing world experiencing substantial economic growth, they are also buying up used cars from auction sites like Copart.

 

These buyers are willing to pay a premium so the usual inventory of used cars is being bought up, leaving drivers and local dealerships with very limited inventory.

 

There is nothing wrong with buyers from around the world buying used cars, they are willing to pay a premium and this is how the free market works.

 

Since carmakers are trying to boost production, they are also facing a chip shortage which makes it difficult to achieve the quotas needed to provide vehicles for all of their dealerships. It may take a year or two before things return to pre-pandemic normal.

 

Why you should trade your car in

 

With the challenges facing dealerships, you will be able to get a very competitive quote by trading in your car. You might simply take the cash for the used car but it would probably be prudent to use the trade-in value and buy a new car.

 

Dealerships do not have a large number of cars available, so they will do whatever they can to make a deal happen. Zero-percent financing, cash back, and a host of other perks are all geared to help motivate you to make a purchase.

 

These dealerships are motivated but you will need to have a strong credit score to benefit from zero-percent financing. Lenders have become more conservative since the onset of the pandemic and you will need to have a stable income with great credit to qualify.

 

The rule of thumb when trying to qualify for an auto loan with great interest rates is 680 or higher. If your score is slightly below that, the dealership will be able to help you but the interest rate quoted will be higher.

 

There has never been a better time for trading in your car and buying a new one, but the first step is for you to contact your dealership and find out what you can get for your car.  Once you have that number, you can then start test-driving new cars until you have found the one you like the most.

 

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.

 

For any questions, concerns, or inquiries. Please don’t hesitate to contact us here!

 

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Categories: Car Loan

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