Used Car Financing Ontario

There are many reasons why Canadians may need a safe and reliable vehicle. For many having a car is essential to travel on your own schedule, commute to work, and be able to take care of life’s day-to-day chores. Prices on automobiles have been steadily on the rise and buying a car with cash requires lots of savings, so many people seek an auto loan in Ontario instead.

Getting an auto loan in Ontario can be a little confusing because some loan companies throw out jargon but don’t explain much. We can help you with used car financing in Ontario so you can focus on which car you like instead of worrying about paperwork and numbers. Used car finance in Ontario doesn’t have to be complicated, and we’re here to help break it all down for you.

First, we’ll start by explaining a few of the basics.

Car Loan Basics

Auto loans in Ontario tend to use terminology and acronyms that can seem confusing. You’ll need to be familiar with these auto loans terms as you move through the buying process. The car buyer is borrowing money from a lender, with interest, and agrees to make payments until the entire loan is paid off. The lender owns the vehicle until the vehicle is paid off, even though the car is registered in your name and you’re financially responsible.

So, when applying for car financing in Ontario, here are a few words you should know:

APR:

APR is an acronym that means Annual Percentage Rate. This is the same as the yearly interest rate on your loan, or the percent amount you’ll pay per year in addition to the vehicle price. For example, if you received car financing at 8% for a $10,000 loan, you will be paying $800 per year interest until the loan term is over.

Loan Term:

The loan term is the number of months or years your loan will go. Loan terms can be anywhere from 2 years and have been known to extend to 8 years. When receiving an auto loan in Ontario, the loan term can vary greatly based on the price and age of the vehicle amongst other factors. The loan term also impacts the monthly payment amount (the longer the term, the lower the payment). Every loan in Ontario is fully open meaning, you can pay it off, pay it down or make lump sum payments, any additional payments made on the auto loan will reduce your term and save you interest. Interest is only calculated on the amount outstanding, so the sooner you pay off your loan the more interest you save, and the less you pay.

Down Payment:

The down payment is money paid upfront to the lender to secure the loan. When applying for used car finance in Ontario, you might need a down payment to get a loan. The good news is that the down payment helps pay for the car and reduces your loan amount. Don’t have a down payment? Don’t worry most auto loans in Ontario can be approved without a down payment!

Warranties and Extras:

A vehicle warranty helps you avoid paying for costly repairs in the future. When applying for used car finance in Ontario, a warranty is a good thing to keep in mind since it can potentially save you a costly repair that you may not have in your budget.

While a warranty adds to your loan and payment, it can also reduce the need to pay out of pocket for expensive repairs in the future. Without a warranty, you’ll need to use your own cash or credit to pay for the repairs.

Used Car Loan Checklist

Getting car financing in Ontario with the best terms possible needs a little knowledge and planning prior to even coming into the dealer or speaking to a bank.

Job / Income Source

Having a steady source of income is essential to getting the best terms and rates possible. You may also need access to pay stubs to prove your income or provide bank statements if you’re self-employed or a contractor. Auto Lenders in Ontario accept multiple sources of income such as ODSP, court ordered child support or child tax credit. The auto lenders in require a minimum income of $1800.

Credit Score

A good credit score helps get good terms when applying for an auto loan in Ontario. A good credit score comes from paying loans when they are due and paying loans off completely. If you have a poor credit score, don’t worry, many reputable dealerships can help you obtain a loan even if you’re credit is in the rebuilding stages. The team at AutoLoanServices.ca are experts in handling all types of credit and have access to 30 different auto lenders in Ontario to get you the best possible rate, irrespective of your credit situation

Down Payment

Car buyers with little credit history might need a down payment. A down payment helps lenders know you have money available to put toward the car and secures part of the loan. The lenders themselves typically decide the minimum down payment but a larger down payment can lower an APR.

You can also lower your monthly payment by making a bigger down payment on the car, thus reducing the amount borrowed.

Driver’s License & Insurance

You need insurance and a driver’s license to buy a vehicle from a dealer so bring your driver’s license. If you currently have an insurance policy you may need to provide your insurance Details. Your insurance card might also be available on your phone in a way you can send to the salesperson or finance team on the spot.

Types of Auto Loans in Ontario

Local Banks

A local brick and mortar bank can help with used car financing in Ontario. Like many online banks, you can often complete applications without going in. Local banks are utilized by some customers who have previous relationships with a banker and the banker will work with the finance team to send money to the dealership.

Dealership/Buy Here, Pay Here

Buy Here, Pay Here dealerships are different in the world of auto loans in Ontario. They sell the car and lend money for the purchase. Paying the loan back involves either going into the store or paying online. Buy here, pay here lots help people with especially poor credit, as they often don’t need to report the car loan to any credit bureaus.

Buy here, pay here dealers can help people secure financing, but also doesn’t help them build a credit score. The positive here is that your credit score won’t be hurt with a repossession, in most cases.

Online Lenders

Online lenders have an online or phone-based application process. The online lender will communicate with the finance team at the dealer to transfer funds, in most cases. There are many online lenders who offer used car finance in many places around the world.

Online lenders work in a similar manner to local banks and often offer a nearly instant decision for your car loan.

Online lenders most often offer an online-based payment system or can be paid over the phone.

Help for any credit situation

Used car financing in Ontario is easy with AutoLoanServices.ca. We can help you secure an auto loan no matter your credit score and get you into a reliable used car that can help you with everything from going to work, to picking up your kids. Applying online today is easy on your smartphone or computer.

AutoLoanServices.ca is proud to be recognized as one of Canada’s most trusted specialty finance companies and loves helping people get around by helping them buy a safe, reliable, and affordable vehicle.

Credit challenges are not a problem for AutoLoanServices.ca. We’ve helped people buy a car when they’ve had past repossessions and other credit issues like bankruptcies.

We work hard to find the best available rate and terms for you and do so quickly to get you on the road fast. Get started on our online application process and you’ll see how easy it is to get auto loans in Ontario. If you want to see how we have helped many clients in Ontario get safe reliable vehicles with low rates, visit our website at www.autoloanservices.ca to read our 5 star google reviews!