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In many cities across the country, including Moncton, there are plans to incorporate more active transportation to be more environmentally friendly. While many people walk, take the bus, or ride a bike to work, driving a car is still the most popular way to get around. In fact, according to the most recent census data, a large majority of those in Moncton are driving to work despite other options.
Unfortunately, buying and owning a car is anything but cheap. Purchasing a car will cost thousands of dollars if not tens of thousands of dollars. Most of us don’t have this kind of money sitting around and this is why the car is one of the most useful financial tools used by the majority of Canadians. Car loans in Moncton allow many more people to own vehicles and take advantage of the convenience that they can provide.
How Do Car Loans Work?
A car loan in Moncton works like most standard loans as you receive a large amount of money from a lender, make a purchase with the funds, and then begin the process of paying back the loan. Except instead of using the loan for just anything, it is used specifically for a vehicle.
Normally, these loans are for anywhere between 36 and 84 months, but this can vary on a case to case basis. Also, in order to get a car loan, you will generally need a few things. This includes a bank account, a steady form of income, a driver’s license, a current address, and a down payment in most cases.
In addition to getting a car loan from a bank or other financial institution, many dealerships offer in-house financing options as well. However, don’t necessarily take the financing they might push on you, be sure to always do your research and choose the option that makes the most sense.
What Kind of Vehicle Can You Get With a Car Loan?
You know a car loan in Moncton can get you a vehicle, but just what types of vehicles are you able to purchase with a car loan? The answer is essentially any kind that you want. Most car loans can be used on any vehicle. This includes:
- Electric cars
Of course, the actual car you get will depend on how much you can afford. Overspending on a vehicle you can’t afford is a surefire way to land yourself in financial trouble. Also, be sure to get a vehicle that fits your lifestyle. Some may need a fuel-efficient and affordable vehicle to get around, while others may need a large truck to haul and tow things.
The inventory of dealerships in your area can also have an impact on what you end up getting, so be familiar with the dealerships in your city and what they stock. Being that you are in Canada, it can’t hurt to get a vehicle that is reliable. Our weather is anything but predictable (especially in the winter), so you and your vehicle need to be prepared for anything.
Why Do People Need Car Loans?
People need car loans in Moncton for a variety of different reasons. Most commonly, people need a car loan to actually afford a vehicle. Cars are quite expensive and the chances the average person can pay for one in cash are slim to none. Other reasons people may require a car loan include:
- To upgrade their current model to a newer one
- Their old car is dead and they need to replace it
- They need a larger vehicle for work or for a growing family
- A more reliable car is needed
- To improve credit
These are just some of the many reasons why people may need a car loan. However, providing your reasoning for getting a car loan often isn’t needed. Many lenders like Canada Drives will not care about your reason for getting a car loan, as long as you can pay it back on the agreed-upon schedule.
Bad Credit Car Loans in Moncton
If you find yourself suffering from bad credit, getting a bad credit car loan in Moncton can sometimes feel like an unreachable goal. However, it doesn’t need to feel this way. There are certainly options for getting a car loan even if your credit history is a little troubled. While there is no textbook definition of “bad credit”, generally a score of less than 600 is considered bad. For reference, credit scores in Canada range from 300 to 900. The higher your score, the easier it will be to borrow money and the better your interest rate will likely be. Of course, each lender will have their own thoughts and feelings on this, so it can be far from consistent.
A key to being able to get a car loan with bad credit is to shop for the right lender. Shopping around and considering all options is going to give you a better result than only checking with a lender or two. If you look enough, you will be able to find a lender willing to work with those who have bad credit. While the interest rates offered by these lenders might be higher, it is better than not being able to find a loan at all.
Another important factor when it comes to getting a car loan with bad credit is having a healthy down payment. The higher your down payment, the less risk the lender has to take on. So even with bad credit, a large down payment can convince may lenders to offer you a car loan. As a result, if you have bad credit, saving up for a substantial down payment can make it easier to be approved for a loan.
If you’d rather not deal with bad credit car loans in Moncton, you can attempt to increase your credit score before applying for a loan. Some of the things you can do to increase your credit score are:
- Use credit responsibly
- Always make your payments in full and on the right date
- Keep your credit utilization low
- Watch out for errors on your credit report
- Keep older credit accounts open
While these tips will surely help your credit improve over time, it won’t happen overnight. It can take months of hard work to see your credit score increase, but it can be well worth it. If you change your habits and work hard to improve, you can be well on your way to better credit.
Vehicle Title Loans
You can use a car loan in Moncton to borrow money to buy a car, but did you know that you can also use your car to borrow money? A vehicle title loan allows you to borrow money against your vehicle. It is a type of secured loan where the title of your car is used as collateral. It can get you access to larger and more affordable loans than you could likely get otherwise.
You must own the vehicle outright and it will need to have some value. While a vehicle title loan can help you get the money you need, you also need to be careful with them. If you miss payments or default on the loan, you could lose the title to your vehicle.
Having trouble deciding between a new car and a used one? Check out this infographic.
Trading in an Old Car
If you want to potentially save some money on a new car and take a smaller car loan in Moncton, consider trading in your old car. Many dealerships will accept trade-ins, where you will give them your old car and they will give you a slight discount on the new one you buy.
It can be an awesome way to spend less and still get a great car. However, it is also important to manage your expectations when it comes to what the dealership will give you. Many people expect to get thousands and thousands for their trade-in, but this is rarely the case. In most cases, you can expect to get anywhere from a few hundred dollars up to a few thousand dollars. Cars depreciate in value quickly, so go in with low expectations to ensure you aren’t disappointed.
Of course, in order to trade in your vehicle, it needs to have retained some value and be worth something. If not, no dealership is likely to want it, or if they do, they will hardly pay you anything.
A Car Loan to Suit Your Needs
The right car loan in Moncton isn’t always easy to come by, but we at Loans Canada are confident we can find one to suit your needs. Be sure to reach out with any questions or concerns that you may have, as we are sure we can help.