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Why Canadians should refinance their Grimsby car loans

Why Canadians should refinance their Grimsby car loans

Canadians love their cars and the vast majority of them have car loans. The price of cars has climbed to the point that no one can buy them on their own, they need to finance the purchase.

Since most Canadians have a car loan, they should think about refinancing their current car loan to something more competitive. Which is where our Grimsby car loan team comes in.

We are all familiar with refinancing a mortgage but few Canadians refinance their car loan, but given the substantial amounts of money, it would be worth your time to consider refinancing.

How auto loan refinancing works in Grimsby

To refinance your auto loan, the prospective lender needs to review your credit profile to make sure your score is high enough to qualify.

With the pandemic, most lenders have become conservative so even though you qualified for a car loan in the past, if your credit score is quite low or your income has decreased, it could make refinancing your car loan more challenging.

Chances are you will qualify for very competitive interest rates but the other question that remains is what is the current fair market value of your vehicle. (if you are experiencing credit issues, you can get very useful advice from a local dealership, they have credit experts there and the advice they give can save you thousands)

Many variables impact the fair market value of a vehicle, mileage and overall condition are just two. You could use websites like AutoTrader to get some insight into what your car is currently worth but the lender will use their valuation model.  The good news is car prices have skyrocketed so your car even when factoring in depreciation is worth just as much if not more than what you owe on it.

One way you can know with certainty what your car is worth is to have it professionally appraised by a local dealership. The dealership will provide a written quote that defines both the trade-in value and cash value, don’t worry if the numbers are different.

The cash value is what the dealership can pay to buy the car but bear in mind they need to resell it for a profit. The trade-in value is what you would be credited if you traded the car for a new one. The trade-in value is closer to the fair market value because the dealership is expecting to sell you another car.

How to the auto loan refinancing process works

There is a multitude of websites that provide Grimsby auto refinancing quotes but your best option is going back to the dealership that did your vehicle appraisal.

The dealership has a network of lenders they work with daily, so they will know which lender is going to provide you with the best possible interest rate.

Something that you might consider doing, since you are already at the dealership and qualify for a low-interest rate is to buy a new car.

Gas prices are on the rise, and you might consider switching over to an all-electric vehicle like the Jeep Wrangler 4XE, (full disclosure we love Jeeps and this EV is by far the most interesting one in the market bar none)

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

Categories: Car Loan

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