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Why you should not hold off buying a new car in London

Why you should not hold off buying a new car in London

If you need a new car but want to wait for the right time, now is the right time. There is a shortage of new and used cars that will take at least 2 years and maybe longer before things begin to return to pre-pandemic levels.

Even if you have credit problems, waiting for things to get better could put you at a disadvantage when the time comes to buy a new car, as our London auto loans team explains.

What is causing the car shortages

Not to sound cliché but it is a perfect storm. Carmakers are unable to get essential computer chips that go into the production of new cars. This shortage is compounded by a reduction in the total number of cars being manufactured.

During the peak of the pandemic, all of the big carmakers essentially stopped producing new cars. Now that we are coming out of the pandemic, 20+ months of pent-up car-buying demand is spreading across the world.

Low-interest rates and developing countries are compounding the lack of inventory. Used cars that were destined for the Canadian market are now being shipped to developing countries in Africa and Europe, if you checked out auction websites like Copart you will see there are used cars but the buyers from developing countries are paying a premium just to buy the vehicles.

How to leverage this opportunity

If your credit score is over 680, you can get a prime interest rate car loan in London. Even if your score falls below 680, you can still get a car loan and should apply for one ASAP.

While the interest rate you pay will be higher than prime, you will have a new car to drive. The way this strategy works is you take a higher interest rate car loan now and after 1-2 years you can refinance it to a lower rate.

The reason you can get a lower interest rate in 1-2 years is your credit score would exceed the 680 requirements provided you take the necessary steps to fix your credit.

Fixing your credit score

You need to first access your credit report and identify what is dragging it down. The primary cause of a low credit score is missed payments, so if any of your accounts are past due, you should bring those current as quickly as possible.

The next thing you need to look at is the total amount of debt you are carrying. When you pay down your debt, it makes you look more creditworthy and raises your credit score.

We suggest working with a local dealership, they have cars in their inventory you can test drive and buy today. The dealerships can also get you approved for a loan with bad credit in London through their extensive network of lenders.

The shortage of new and used cars is a real problem and you need to get a car ASAP or run the risk of not being able to buy one when you need it the most.

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

Categories: Car Loan

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