Best Ways to Save Money on a Car Loan
How to Get a Better Car Deal with High Interest Rates
The Bank of Canada raised its benchmark interest rate to a 22-year high in July 2023 to help curb inflation. A recent Reuters report hinted that the central bank might be pumping the brakes on additional increases, but that doesn’t really help people looking to buy a new car, truck or SUV right now. If you’re shopping around, Davey Auto Sales offers very competitive pricing, which should help with the pain we’re all feeling around interest rates. Our team did a little homework to find some ways to help get a better car deal with high interest rates. Let’s take a look together.
READ MORE: Why Buy from Davey Auto Sales?
Can You Control Your Interest Rate?
Most lenders base their interest rate on the benchmark rate set by Canada’s central bank, but there are several other factors involved, like your credit score, type and condition of the vehicle and more. Take a look at a few things you can control to help get yourself the best possible deal on vehicle financing during these nearly unprecedented times.
- Check Your Credit Report: Obviously, buyers with higher credit scores can get better interest rates. Also, it’s important to check your credit report for errors, and have those mistakes removed before they can, literally, cost you.
- Shorten the Loan Term: Opting for a long loan term can lower your monthly payments, but it can also increase the amount of interest you’ll pay. Not everyone has the same circumstances, so we until we know yours, we can’t tell you what the best term may be
- Age/Condition of the Vehicle: Vehicles that are newer with fewer miles will command a higher price and likely higher interest rates. Choosing an older vehicle with more miles is likely to be a little more affordable across the board.
- Income-to-Debt Ratio: Potential borrowers with an already high debt load are likely going to be on the hook for higher interest rates because the lender sees this as risk. Try to pay off as much debt as possible before applying for more.
Davey Auto Sales works with people in credit situations. If you need to add to your collection of vehicles, make an appointment with one of our product experts, today.