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While a car purchase is often a necessity of modern life, few people have thousands of dollars on hand to buy a new or used car when a new job opportunity arises or an older car stops working. Considering auto finance options can provide additional funding when it's time to shop for an automobile. Financing Through a Car Dealership For many buyers, the easiest and most convenient auto finance option is through a dealership. Not only does this option mean that everything is done at the same place, but dealerships are also often able to offer special deals, such as zero percent financing and competitive rates. In some cases, they can even provide funding for those who may not be able to secure a bank loan because of poor or nonexistent credit. However, be aware that add-ons can often increase your monthly payment with dealership financing. Financing Through a Bank Those already associated with a bank or a credit union should check there first for the best rates. A financial institution can also provide counselling about whether the loan is a good financial decision based on credit and income information, as well as the price of the vehicle. However, this type of loan usually takes longer than financing through a dealership and often has more stringent credit approval guidelines. Options for Those with Poor Credit Customers with credit scores lower than 670 may not qualify for traditional auto financing. However, these buyers may be eligible for what's known as "non-prime" loans, designed for new grads without much credit history and those newly arrived to Canada who don't yet have a credit bureau file. In addition, Canadians who have damaged credit because of job loss or other extenuating factors may want to consider this type of loan. Because interest rates on these loan products may be high, it's best to read the terms carefully and understand whether you're making a sound financial decision. However, these loans can be found from major Canadian banks with as low as four percent interest for qualified buyers, particularly when the loan is secured with the car itself as collateral. Unsecured auto finance loans, in which the car is not held up as collateral, typically have rates between seven and ten percent. Financing Options with Limited Funds Although a traditional car loan may not be available to those with no down payment saved, there are other products that can assist these buyers. Buyers who can qualify for a traditional car loan but don't have the funds available for a down payment can consider a three-month down payment loan. Those who need time to improve their credit scores before making a car purchase can also opt for a three-month loan for car repairs, buying additional time to qualify for auto finance for a newer model. Canadians shopping for a new or used car have an array of auto finance options to consider. Working with an experienced loan professional can help ensure that one's finances are protected when securing a safer, more reliable automobile. To learn more about options for auto finance, visit http://www.epfinancial.ca/en/auxiliary-financial-services.
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