GMC models can be pretty expensive to purchase, which is why financing is a common way for Canadians to get their hands on this brand of vehicle.
But what if you want to refinance your GM Financial auto loan? And how can refinancing help make your auto loan payments more manageable?
Read on to find out about refinancing your auto loan and the options available to you to cover the cost of a GMC.
Can You Refinance Your GM Financial Auto Loan?
If you already have a car loan but are struggling with the monthly payments, refinancing it may be a great way to reduce your monthly burden. By refinancing, you can opt to extend the term to stretch out your payments and make them for affordable. Plus, you may qualify for a lower interest rate compared to the rate you’re currently locked in at, which can reduce the overall interest you pay over the loan term.
Refinance A Car Loan With Mode
GM makes it easy to refinance your auto loan with a new feature called Mode. Mode allows you to refinance your car loan from your home. You can use Mode by visiting the site getmode.com or by downloading it from the App Store or Google Play.
However, do note, you’ll need to have received an offer code in the mail in order to refinance your auto loan with Mode. Further, current GM Financial loan clients are ineligible for refinancing through Mode.
Other Ways To Refinance Your GM Car Loan
If you already have a GM car loan, there are other ways to refinance, such as through an alternative online lender who is willing to extend your car loan term or offer you a lower rate.
The lender will look at your GM Financial loan payoff statement to get all the details about your loan payoff amount. With a new car loan, you can use the funds to pay off your original car loan, then proceed to make payments towards your new loan at a different rate and terms.
What Options Do You Have To Purchase A GMC Vehicle?
If you’re looking to buy a GMC vehicle, you have the option to either finance your purchase or lease the vehicle:
Financing Options
By financing your GMC purchase, you’ll eventually own the vehicle outright once your loan is paid off. For convenience purposes, you can apply for a car loan directly through the GMC dealership with GM’s in-house financing firm. They’ll take care of the financing at the same time as the purchase.
If you choose to get a car loan through GM Financial, you’ll be offered rates anywhere from 0% to 1.99% for 5- to 6-year terms, though these may vary based on your financial situation.
That said, you can get a car loan from any bank or lender to help pay for the purchase of a GMC vehicle. In fact, you’ll probably be able to get a more competitive interest rate than you would with a dealership.
Leasing Options
If you like the idea of trading in your GMC every couple of years or so for a new one, then leasing may be an option. With a lease, you don’t own the car. Instead, you pay to use it for a specific period of time. Once the lease term ends, you have the option to either return it or purchase the vehicle.
To lease a GMC vehicle, you’ll make a down payment and refundable security deposit. Taxes and registration fees may also be required upfront. Once your lease agreement has been finalized, you’ll make monthly payments until the term expires.
Lease terms usually range between 24 and 48 months, with lease interest rates ranging from 3.5% to 4.9% with a small down payment.
Lease payments are typically lower than financing payments in most cases, because you’re only paying for the depreciation of the vehicle during the lease, plus interest, taxes, and other fees.
Contact Information For GM Financial Auto Loans
You can get in touch with a representative from GM Financial in the following ways:
- Telephone: 1-800-465-4591
- Email: cservice@gmfinancial.com
- Mail: Corporate Office
2001 Sheppard Ave. East, Suite 600, Toronto, ON M2J4Z8
How To Lower The Interest Rate On A GM Financial Auto Loan
One of the most important components of your GMC auto loan is the interest rate. The goal is to secure the lowest rate possible, which will make your loan more affordable over the long run. Here are a few ways to lower the rate you’re offered on a GMC car loan:
Improve Your Credit
Your credit profile is one of the many factors that influences the interest rate your lender charges you. A higher credit score means you’re more likely to keep up with your loan payments, and the lender will reward you with a lower interest rate.
If your credit score is on the lower side, take some time to give it a boost by doing the following:
- Making all your bill payments on time
- Spending no more than 30% of your credit card’s limit
- Refraining from too many loan applications in a short period of time
Compare Loan Offers
If you choose to work with an independent lender, do some homework to find where the best deals are. Compare different lenders and the loans they offer. Compare interest rates, terms, fees, and eligibility criteria before deciding which lender to work with.
If you choose to apply directly with GM Financial, you may want to negotiate a rate, though you may not have as much flexibility as you would if you apply with an outside lender. That said, your negotiating power may be stronger if your finances and credit score are healthy.
Apply With A Co-Signer
Your lender may charge you a higher interest rate if your credit score or income isn’t strong enough. If that’s the case, consider adding a co-signer to the loan agreement.
A co-signer is someone with good credit and a high income who is able to secure a loan at a lower rate. Adding someone like this to your loan contract will reduce the lender’s risk and may subsequently lower the interest rate you’re charged on your auto loan.
How To Lower Monthly Payments For A GM Financial Auto Loan
GM offers a variety of incentives to help keep the costs of your vehicle purchase as low as possible, including the following:
- Heroes Program. Get up to a $1,000 bonus towards an eligible GM vehicle if you’re in the Canadian Forces, or are a first responder or healthcare worker.
- GM Family First. Employees and family members can purchase or lease an eligible GM vehicle at the GM Employee Discount Price.
- GM Mobility Program. Those with a disability may qualify for reimbursement of up to $1,000 toward the cost of adapting a GM vehicle to accommodate their mobility issues.
- Student Bonus Program. Current students or recent graduates may qualify for up to $500 to be used towards the purchase of a GM vehicle.
- Welcome To Canada Program. New immigrants to Canada may be eligible for up to a $1,000 bonus towards the purchase or lease of an eligible GM vehicle.
- Preferred Pricing Program. Many Canadian companies are partnered with GM. If you work for such a company, you may be able to get Preferred Pricing on the purchase, lease or finance of a GM vehicle.
Does GM Financial Offer A Grace Period on Auto Loans?
No, GM Financial does not offer a grace period. They require that all loan payments be made on time every billing cycle. Late payments will be charged interest and late fees each day past the payment due date, according to your loan contract.
What Happens When You Miss A GM Financial Auto Loan Payment?
Missing a car loan payment may come with consequences, and the severity of these repercussions depends on how late the payment is:
Less Than 30 Days Late
If your car loan payment is less than 30 days late, you’ll get a call from your lender to find out why the payment was missed. Depending on your auto loan contract, you may be required to pay interest and late payment penalty fees based on the number of days that your payment is past due.
More Than 30 Days Late
If your car loan payment is more than 30 days late, the consequences could be much more severe. For starters, the lender will likely report the missed payment to the credit bureaus. If this happens, your credit score could take a hit.
If you haven’t made any car loan payments in at least 60 to 90 days, the lender could start the process of repossessing the car. When you take out an auto loan, your lender puts a lien on the vehicle until the loan is fully repaid. Until then, you don’t technically own the car, which means the lender is within their rights to repossess the vehicle if you’ve missed several payments in a row.
GM Financial Auto Loan Repossession Policy
GM Financial handles vehicle repossessions on a case-by-case basis. The financing firm won’t immediately start the repossession process if your payment is only a few days late.
Before your vehicle is repossessed, you’ll be given some time to make up for your missed payments before your car is repossessed.
If your vehicle is repossessed due to a slew of missed car loan payments, you may have some options to get it back. The best way is to make up for your missed payments in order to have your car loan contract reinstated. You can also get in touch with the lender to negotiate better terms for your loan or come up with a different payment plan altogether.
If you’ve missed a car loan payment, get in touch with the lender right away to discuss your options before you officially default on the loan and risk vehicle repossession.
How To Voluntarily Surrender A GM Car
One option to avoid having your lender repossess your car after you’ve defaulted on your auto loan is to voluntarily surrender your car. As mentioned, you don’t actually own your vehicle when you finance it until the car loan is fully paid off. Until then, the lender can repossess your car if you default on the loan.
Voluntary repossession, however, allows you to give up the car willingly without the lender having to take it from you. To voluntarily surrender your GMC vehicle, simply inform the lender of your inability to repay the outstanding balance on your car loan, then arrange a time and place to drop off the vehicle.
By voluntarily giving up your car, you can avoid the extra fees the lender would charge you to repossess the car and maintain a good relationship with the dealer in case you choose to buy another car with them in the future.
You can also avoid having a collection agency come after you by giving up the car on your own terms. While your credit score will take a hit, either way, it may not be as severely damaged if the lender doesn’t have to hand over your file to a collection agency.
GMC Car Refinancing FAQs
What will a new GMC vehicle cost me?
Does GM Financial offer 0% financing?
How long does a new GM Financial warranty last?
Final Thoughts
You have options when it comes to buying a GMC vehicle, including financing directly through your dealer via GM Financial or with an independent lender. And if you already have an auto loan and are looking to reduce your payments, refinancing might make sense, especially if you’re able to snag a lower interest rate or extend the loan term.
