Are your COVID-19 government benefits coming to end? We have the information you need to prepare.
Many Canadians need access to a car or other motor vehicle to get around. The residents of Manitoba, like yourself, are no exception. Whether it’s for going to work, school, the grocery store, or to simply avoid Canada’s ever-changing weather conditions, any car can be an extremely beneficial asset.
Looking for a personal loan in Manitoba? Try reading this.
Reasons You Might Need a Car Loan
While it’s possible to find a second-hand, fixer-upper car for sale in your neighborhood, a more reliable one might be a better choice. When you need your car for daily activities, you probably want one that’s not in danger of breaking down all the time.
Other reasons Manitoba consumers would need a car loan:
- Cars, even used ones, can be very expensive. Most consumers can’t afford to pay for a new or slightly used car with cash, cheques or credit cards.
- For the sake of their other expenses. Since you would be paying the car back through installments, you should still have some money left over to pay for your other regular costs (groceries, living expenses, etc.). You can even afford all the expenses that come with any vehicle (fuel, insurance, registration, etc.)
- To upgrade to a better or more efficient model. Maybe you’re already driving a gas-guzzler or you’re sick of spending money trying to keep your old car running. Whatever the reason, a new model can certainly upgrade your lifestyle.
- To upgrade to a larger model. You could also want a bit more cargo space. Then again, it might be because you have a spouse and children to think about. After all, a minivan is roomier and safer than a sports car.
- An accident or a breakdown has occurred. Even if you love the car you’re driving now, remember that anything can happen while you’re on the road. When something inevitably goes wrong, making your car undrivable, scrapping it and getting a car loan instead can save you a lot of stress.
I Want To…
Getting Approved for a Car Loan
As it is with most credit products, it’s essential to show your lender that you’re worthy of the potential credit they’re letting you borrow. Any car, new or used, can cost a pretty penny, so lenders want to be certain that their clients can pay off their loan in full by the end of their payment term. So, be prepared for your lender to examine:
- Your credit – The lender might perform a “hard inquiry” to view your credit report and credit score. By doing this, they’ll be able to see how you’ve been handling your other active credit products. To find out how your payment history affects your credit score, read this.
- Your employment/income – You could be paying off your car loan for years, so your lender will want to confirm that you have (and will continue to have) steady employment and enough income to justify all your payments.
- Your other outstanding debts – For obvious reasons, some lenders might deny your applications when they examine your credit and finances, only to discover that you already owe money all over town. Check out our debt timetable to see how ongoing debt could affect you.
Read this to discover some ways of avoiding car loan debt.
However, your approval chances and interest rate may also depend on:
- The type of vehicle you want – When it comes to more expensive or newer makes and models, the application process is likely to be more strict and your approval harder to receive. If you are approved, watch out, because your interest rate will probably be much higher than a cheaper or older model.
- What your dealership’s inventory looks like – Who knows? Your dealership might specialize in luxury models, used models, hybrids/electric cars, etc. If you want a higher priced make/model, but your credit and finances aren’t up to the dealership’s standards for lending, you may have to search elsewhere.
- The size of your down payment – One way of gaining both approval and a lower interest rate is by making as a large of a down payment on your car as you can. Not only does this look good to your lender, you’ll also be saving money over time, because more of the car’s principal cost will be paid down, reducing your overall payment period.
- Your own wants and needs – Let’s not forget the most important element of all, your own lifestyle. No matter what your credit looks like or how easily you’ve been able to keep up with your debts, none of it matters if your new car loan won’t fit comfortably into your budget. Before applying, make sure you can afford all your payments, interest rates, other fees, a good warranty, etc. If approved, your car loan could be putting you in debt for years to come and it’s essential not to let that debt get out of hand.
Looking for even more information about your auto financing options? Click here.
Types of Vehicles You Can Have Access To
Once again, the vehicle you’re actually approved for will depend largely on your financial health over the last few years. However, once you are approved, you should be able to buy almost any make or model, including but not limited to:
- Recreational vehicles (motorhomes, boats, ski-doos, ATVs, motorcycles, etc)
Trading in Your Used Vehicle
If you’re on the hunt for your next vehicle, you might be wondering if you can trade in your old car. Yes! There are plenty of dealerships in Manitoba that accept trade-ins. Essentially, your vehicle will be inspected to determine its current market value. If it qualifies, the dealership may discount part of that value from the price of the new one.
However, when considering a trade-in, it’s important to understand the value of your used vehicle and how it drops the more you drive it. That’s right, most cars, even brand new ones, lose around 11% of their value as soon as you leave the dealership. So, it’s best to have your expectations low during the trade-in evaluation. Being that your dealership has to resell the car at a profit, you probably won’t receive anywhere near what the vehicle is worth. However, even if you’re only saving a couple of hundred, even a thousand dollars, at least you’re still saving.
Want to know if you can trade in a vehicle that isn’t paid off? Find out here.
Using Your Vehicle’s Title to Borrow
If you already own your vehicle completely, you can also use it to borrow loan money by leveraging its title. As it would be with a trade-in, your vehicle with be inspected and quoted at a certain market value. If that value is high enough to qualify, your lender will grant you a loan using your vehicle’s title as collateral. Be warned, however, that since the loan is secured against your vehicle, your lender has the right to repossess it in the event that you start missing your loan payments!
Here’s how you can get a car loan after a repossession.
Can I still get a car loan in Manitoba if I have bad credit?
Are there prepayment penalties for car loans in Manitoba?
Can I refinance my car to get a lower monthly payment?
Getting Your Car Loan Through Us
If you’re a Manitoba driver and you’ve been looking for the right car loan for your financial needs, your search ends here at Loans Canada. Don’t be shy! Contact us today and we’ll get you squared away with the best sources of car loans in your area.