If you are new to Canada, a young adult, or have never had a loan or credit card in the past, it's possible that you have no credit history or a very minimal one. If you're looking to purchase your first vehicle with a loan, this article provides five tips to ensure you get the best possible loan and improve your credit over the next few years. Some of these tips might seem trivial to some, but assuming this is your first vehicle, you may not be familiar with automotive financing. Our goal is to help you make the best possible decision about your next vehicle and financing offer.
- Choose Your Vehicle Carefully
There are many expenses associated with owning a vehicle and the idea of cost of ownership will recur throughout this article. The point we want to stress here relates to the reliability of the vehicle you are about to buy. While you can plan for many ownership costs like maintenance or insurance, unexpected repairs and mechanical issues are harder to anticipate and could significantly impact your budget. We would encourage you to buy a vehicle known for its reliability and that comes with a clean Carfax vehicle history report and inspection report. Some vehicles are simply more reliable than others and for your first vehicle, it's best to focus on those with proven dependability and excellent condition to avoid unexpected repairs that might compromise your ability to make monthly payments.
- Plan for Other Ownership Costs
Many ownership costs are easy to anticipate. Costs like insurance, regular and scheduled maintenance, fuel, and tires can be planned ahead of time. These expenses add up, sometimes amounting to as much as 50% of your monthly vehicle payment. If your budget leaves you with $500 per month, that doesn't mean you should allocate the full $500 to your vehicle payment. Choose a reliable vehicle and leave some budget for monthly expenses so you don't feel trapped by your loan.
- Work with a Dealership Specializing in Non-Traditional Financing
Financing a new or pre-owned vehicle with no credit is not the same as financing a vehicle with bad credit, but it does differ from traditional financing loans for individuals with multiple previous loans on their credit report. Financing a vehicle with no credit means you have to demonstrate to financial institutions that you can cover your payments with your monthly revenue. Some dealerships don't offer as many financing options as others, and due to the higher risk of your case, you may end up with a loan with higher interest than necessary because the dealership wasn't able to offer you a better deal. Therefore, ensure you do business with a dealership specializing in automotive financing that has partnerships with multiple financial institutions to secure you the best possible deal on your next vehicle. This will make a significant difference when shopping for your next vehicle.
When you do business with Steele Valley Chevrolet in New Minas, you will enjoy the largest and most comprehensive selection of financing offers in Nova Scotia. Our team can work with our financing partners to make sure we get you a great financing plan that will start you off right.
The last thing you want is to finance your first vehicle for five or six years, only to find it doesn't meet your needs after six months. We all know vehicles depreciate, and while there's some flexibility to replace your vehicle if there are few years left on your loan, it's generally not advisable to trade in or replace it immediately after purchase. Therefore, think ahead and consider long-term needs to ensure your vehicle will remain suitable for a considerable period, allowing you to consistently make payments and reduce your loan. Consider future space needs for the next four or five years and ensure you test drive the vehicle to confirm it meets all your requirements.
- Think About Your Other Credit Needs
In addition to considering long-term vehicle needs, it's crucial to think long-term about upcoming credit requirements. Many first-time car buyers or people with no credit are in the process of building their lives and may face multiple financial demands simultaneously. You might need a new vehicle, but a new house could also be on the horizon. Ensure your vehicle doesn't compromise your ability to secure financing elsewhere. This involves ensuring the vehicle fits within your budget, is easily affordable, and is reliable and dependable. Feel free to call us today to learn more. We look forward to hearing from you.
