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Just about everyone needs a set of wheels. This is especially true for people who live in the suburbs or in rural areas of Winnipeg where public transportation is scarce or even non-existent. In cases like these, a reliable vehicle is necessary.
But cars cost a pretty penny these days. And if you had to pay for a car with cash upfront, odds are you probably wouldn’t have the necessary funds to make such a huge purchase.
That’s why car loans were invented. They make it feasible and possible for the average consumer in Winnipeg and Canada as a whole to purchase a vehicle without having to come up with all of the money upfront.
That said, it’s also important not to take advantage of car loans to the point where you take out much more than you can handle. Just because you can get approved for a large car loan, doesn’t mean you should go out and buy the most expensive vehicle out there (click here for more information about avoiding excessive car loan debt).
Read on to find out all you need to know about applying for a car loan in Winnipeg.
What Type of Vehicle Can You Get With a Car Loan in Winnipeg?
Car loans in Winnipeg can be applied to just about any car purchase. Whether it’s a small used vehicle that’s only a few thousand dollars to a top-of-the-line luxury vehicle.
But that doesn’t necessarily mean you should shoot for the stars. Keep in mind that a car loan will add more debt to the books. You’ll be required to make monthly payments toward the loan in order to pay off the balance in full. If you spend more than what your budget can handle, you’ll be stuck having to make payments that you really can’t afford.
The type of vehicle that you purchase will depend on your exact needs and your budget. It will also depend on the dealership that you work with in Winnipeg and the type of inventory that they have available.
That said, you can expect to choose from all sorts of makes and models, including but not limited to:
- Pick-up trucks
- Sports cars
- Luxury vehicles
Check out this infographic to learn all about your auto financing options.
Common Reasons Why Winnipeg Consumers Take Out Car Loans
Let’s face it: cars are very expensive these days. Not very many people in Winnipeg have the liquid cash available in their bank accounts to fully cover the cost of a vehicle that they plan on purchasing. That’s why car loans are made available to those who qualify for them, making it possible to afford the purchase of a vehicle.
Other common reasons why Winnipeg consumers may require a car loan include the following:
- Upgrading their current model
- Getting a larger vehicle to accommodate an expanding family
- Getting a more reliable vehicle to get consumers to and from work
- Replacing a no-functioning vehicle
What About Bad Credit Car Loans in Winnipeg?
Just like any other type of loan, car loans typically have a certain set of requirements that borrowers in Winnipeg will have to meet in order to get approved, and that includes a good credit score.
Generally speaking, lenders in Winnipeg want to see a score of at least 650 before approving a car loan, though the exact number will depend on the lender and the borrower’s other financial information.
But that doesn’t mean you can’t secure a car loan with a bad credit score. There are bad credit car loans available in Winnipeg that involve working with lenders who deal specifically with borrowers who have sub-par credit. You just have to find the right lender who deals with borrowers in this particular situation.
If that’s the case, you will likely have to make up for your lack of good credit by having a solid income, a hefty down payment, and proof that you have the ability to make your payments every month in full.
What About Trading in My Old Car?
If you already own a vehicle, you may be able to use it to trade-in for a new car. Most dealerships in Winnipeg allow for vehicle trade-ins where a percentage of the value of the old vehicle can be put towards the purchase of a new car. This can reduce the financial burden of making such a large purchase.
If you still owe money on your trade-in vehicle and the amount you owe on the vehicle is less than its trade-in value, the process is rather simple and straightforward.
What happens when your loan is larger than the value of your car? Click here.
For instance, if you still owe $2,000 on the car and your dealer offers you $3,000 for it as a trade-in, the dealer will pay off the $2,000 loan on your behalf, which will lift the lien. At that point, you can transfer ownership of your vehicle to the dealer and use the remaining $1,000 to be put towards the purchase of your new car.
If you owe more on the loan than what your car is worth, the remaining loan amount will usually become part of your next car loan for the new vehicle purchase. For instance, if you still owe $7,000 on your car and the dealer offers you $5,000 in trade-in value, the remaining $2,000 would be rolled over into your new car loan.
If you bought a new car for $25,000, for instance, your new car loan amount would now be $27,000. It’s important to understand that in this situation, you’ll still be paying for a vehicle you no longer own.
It’s also important to be aware of the potential for the dealer to offer you much less than what you believe your car is worth. It’s not uncommon for consumers to believe that their car is worth more than what it really is. Being realistic is important when it comes to trade-ins.
Trying to decide between a used car and a new car? This infographic is for you.
What Are Vehicle Title Loans?
Do you already own a vehicle? If so, you might actually be able to use this valuable asset to borrow money you need for other purposes. Think of it as a reverse car loan where you use your car to get your hands on much-needed cash.
If you are having a tough time getting approved for a loan in Winnipeg because of bad credit, a vehicle title loan might be something that you may want to consider. This type of loan is secured with collateral; namely, your vehicle. The lender will place a lien on your vehicle, which means you would be temporarily surrendering the hard copy of the title of your car in exchange for the loan amount you require.
In order to take advantage of this type of loan arrangement, your vehicle must have some value. Not only that, but you must outright and fully own your car. That means you can’t still be paying a car loan to pay it off. The vehicle must be fully repaid in order to take advantage of a vehicle title loan.
Recreational Vehicle Loans
In addition to traditional types of vehicles – such as sedans and SUVs – you can also get a loan in Winnipeg to pay for a recreational vehicle. This can include any of the following:
- Dirt bikes
On average, recreational vehicle loans range from 10 to 15-year terms, though many lenders may be open to extending terms up to 20 years for larger loans with qualified collateral. Rates are similar to those for traditional car loans, as are the terms of the loan. As long as you meet the qualifications of loan approval, you can use a recreational vehicle loan to pay for the purchase of any one of the above-mentioned vehicles.
Looking for financing to cover a car repair? This article is for you.
Ready to Apply For a Car Loan?
Car loans extremely useful financial products that make it possible for consumers in Winnipeg to make such a large purchase. No matter what type of car you plan to buy, you don’t have to necessarily have enough money in your bank account to fully cover the cost of the car. When you’re ready to apply for a car loan, get in touch with Loans Canada to get the guidance you need to choose the right loan product for you.