Can You Get a Loan for a Used Car?

If you are like many car buyers, you want to buy a used car instead of a new one. For many reasons, that makes a lot of sense. You might wonder, though, if car loans are available for used cars. Generally, the answer is yes. Here are some things to consider when applying for a used car loan.

Think About Purchasing at a Dealership

If you need to finance your used car purchase, you should consider buying the car from a dealership. Generally, dealers are in a better position to finance used cars than other institutions. In fact, many dealers routinely finance used car loans. While there are exceptions, banks, credit unions, and financing companies generally prefer to finance new cars. Because they have a better chance of realizing a return on their investment with new cards, traditional financing companies often have rigorous application processes for used car loans. While you might ultimately be successful, getting such a loan from a conventional lender can be extraordinarily stressful. Thus, if you want to finance a used car, you should probably buy your car at a dealership.

Know Your Credit Score

Like with financing a new car, you will be better able to negotiate beneficial used car loan terms if you know your credit score. Before you start shopping for your car, request your score from one of the credit bureaus.

Don’t Choose Too Old of a Car

The newer your used car is, the greater your odds of securing financing. While there is no absolute limit, generally cars older than four or five years are more difficult to finance. On the other hand, if you run into trouble financing your older used car, you might look for a new car. Often, those who are unable to get a used car loan have no problem with new car financing.

Before you shop for used car loans, consider the unique challenges of applying for one. By knowing what to expect, you will be in a better position to secure financing for your used car.

Getting the Best Interest Rate on a Used Car

You’ve narrowed down your search for the perfect used car for your needs and budget and are ready to address your finance options. If you won’t be buying the car outright, you’ll need to finance it, which means paying interest. To avoid paying more than necessary for used cars, you’ll want to keep your interest rate as low as possible, which you can easily do with a few good tips.

Think About Financing Through the Dealer

While you might think financing your car through a dealer is automatically more expensive, the truth of the matter is that doing so could net you a pretty solid deal. This is because dealerships can offer incentives like zero-percent financing and other specialized low rates. Check to see what’s on the table before you think about financing elsewhere. C

onsider a Certified Pre-Owned Car

It seems counter intuitive, but older cars usually come with higher interest rates when compared to newer models. Instead of thinking you’re better off with a new model, consider the fact that dealerships sometimes have zero-percent interest specials on their certified pre-owned cars. Be sure to ask about them as you’re walking up and down the aisles checking out cars.

Consider Your Term Length

If it’s at all possible, get a car loan with the shortest term length possible. The reason for this is that a shorter term length equals a shorter repayment length, which means a lower amount of interest paid over the life of your loan. Another great thing about getting a term length as short as possible is that you don’t have to worry as much about being upside down on your loan, which is what happens when you owe more on your car than it’s worth.

As you can see, there are several things you can do to keep the interest rate low on your used car. Be sure to put these tips to good use.

3 Reasons to Buy a Used Car

If you’ve ever turned on a TV — and chances are you have — you were probably inundated with commercials for shiny new cars for only a single paycheck per month! When your family is in the market for a new car, a used cars service could offer you something just as beautiful as what you see in on the new lot. That’s not the only benefit, either.

Used Cars Are Cheap

It might seem obvious, but used cars are cheaper, and it goes beyond a simple price tag. Perhaps you prefer luxury cars, but could never afford one right off the lot. For what you’d spend on a brand new Toyota, you might be able to find the luxury car of your dreams. Even if you prefer something family-friendly over a sports car, you could save up to 50 percent by purchasing something used.

It Might Be Safer

It seems like a different car recall is in the news every day. Purchasing a new car leaves you vulnerable to undiscovered mechanical issues. If you opt to buy one that is a few years old instead, it’s more likely that any problems were already discovered and fixed, leaving you with peace of mind.

You Don’t Have to Skip the Warranty

Many people worry they’ll end up purchasing a used car that doesn’t run for long, but most dealerships offer certified pre-owned cars. Certified used cars are usually slightly more expensive than traditional used cars, but the certification means the car was professionally inspected and, if it had any problems, was professionally repaired. Certified used cars come with a warranty that ensures you can drive the car for a set amount of years, at least.

If you’ve been trying to decide between purchasing a brand new vehicle or buying a used one, our used cars service could be just what you’re looking for. Whether you need something for the whole family or something to impress your friends on the weekends, we 

5 Benefits of Used Cars

When you set out to look for your dream car, you want one that has all the right features but doesn’t break the bank. Used car dealerships offer you myriad car choices, and they are your best bet for finding that perfect car. Here are five of the benefits of buying used cars.

The first and perhaps most obvious benefit of a used car is the lower price sticker. The steepest depreciation in value comes in the first two or three years of a car’s life. When you buy used, you profit from that depreciation, whereas an original car owner inevitably takes a serious financial hit on trade-in.

Used cars tend to come with lower down payments as well as lower prices. Furthermore, insurance and taxes on your used car will be less expensive, which means you have more money in your wallet at the end of the month.

If you want a car loaded with all the hottest tech, the latest safety features or the cleanest engine developments, you have plenty of options to choose from among cars made in the last two to four years. You can get a thoroughly modern car without the sticker shock or the drastic depreciation.

If you are operating on a tight budget, cars older than four years are probably the ones in your sights. Although buying an older used car may not leave you with Bluetooth compatibility, you will still have access to plenty of safety features in cars that date as far back as early 2000.

Last but not least, if your passion is classic cars, you have only one option. Used is the only way to go. There are plenty of other benefits to buying used cars.

These cars give you the greatest bang for your buck and offer you the widest purchasing variety.

How to Save With Dealer-approved Car Loans

People want to save money on products they buy, and this is most true of products that cost more. Cars are one key example. People certainly are inclined to make any effort to save money on car loans when the overall price can represent such a large sum. Car dealers have access and industry insight that can save people money in the long run. Working with one can potentially save anyone looking for a car a reasonable amount of money.

Preferred Lenders

Dealerships often negotiate car loans through a bank. Because these companies have so much business, they often qualify for special rates at a number of financial institutions. This can be advantageous for many customers looking for a good deal. The connections a dealer has can lead to a better price for consumers. It is important to check with a dealership to find out what sort of options it can provide.

Less Down

People looking for car loans through a dealership could also qualify for less down on competitive rates. It could benefit a person looking for such loan to pay less in the beginning and enjoy good rates such as those that a dealership can provide. Even if the dealership cannot guarantee better rates for less down, it still can offer competitive rates for a potentially smaller amount of money. Working with a dealership can be important for anyone who wants more personalization with his or her car loan.

More Options

Another opportunity a dealership can provide is more options. Dealerships have been selling cars for years, and they can leverage their industry knowledge to create a better end result. A person in such a situation should consider reaching out to the professional service with particular requests.

Anyone looking for car loans should explore his or her options and see how a dealership might be an essential part of owning a new car.

Why Buying a Used Car From a Trusted Dealer Is Important

If I wanted to buy a product, I would buy it from a retailer I trust. The same thing is true for buying used cars. I would never buy a car from a dealer I didn’t trust. That is why we strive to be a trusted name in used car sales, and why I think you need to understand the importance of buying used cars from a trusted dealer.

We want our customers to be confident in dealing with us. We want them to know that when we say something, they can trust every word. I don’t make promises I can’t keep or tell my customers things that I can’t guarantee because I know that will only hurt me, the dealership and the customer in the end.

Buying from a trusted dealer is important because it allows customers to be able to buy without worrying that they are being scammed. They know that shopping with this dealer will mean they get a good vehicle for a great price. They know that the dealer won’t tell them a car runs great and has no problems if it actually needs a new transmission. They know that the dealer won’t tell them the car they want is only available at a hugely inflated price and instead will be willing to negotiate a fair price.

Let’s face it, while technology seems to be the way of the world, word of mouth is still huge when it comes to reputations. So, a dealer that is not trustworthy will soon be exposed and his reputation ruined. As a trusted dealer, though, word of mouth is a blessing. That is why we always strive to give each customer the best experience possible.

Our customers expect us to be trustworthy, and we don’t let them down. We offer great quality and prices for used vehicles. That is the whole point of being trustworthy. If we don’t have your trust, then we don’t have a business.

How to Finance a Used Car in Canada

If you’ve found the new-to-you car of your dreams but don’t have the cash to pay for it in full, financing is the solution. In this post we’ll go over everything you need to know so you can secure the right kind of auto financing for your vehicle and your bottom line.

How car financing works

Taking out a car loan eliminates the stress of coming up with a large sum of money all at once. However, it also adds another monthly payment to your budget, so it’s important to understand the ins-and-outs of car financing before looking at the different lending options.
Your monthly car loan payments are calculated using three elements: principal, term and interest rate. 
Principal is the total cost of the vehicle, including any fees the lender or dealership may have for the car loan and any add-ons you choose.
Term is the length of time that payments will be made on the loan — typical terms range from 36 months to 72 months.
Interest rate is the percentage the lender is charging you to borrow money. 
Fixed rate loans offer predictability because the interest rate stays the same throughout the term of the loan. If you’re less concerned with fluctuations and want to benefit from times when interest rates are lower, you can opt for a variable rate loan.

Borrowing for new and used cars

New and used cars get treated differently by lenders for a few reasons. For starters, new cars have a higher sticker price than pre-owned cars. While this usually means buyers can cash-in on incentives like rebates or 0% financing for a certain period, it also means loan payment terms will be longer and monthly premiums will be higher. Also, new cars are usually more expensive to insure. 
Used cars, on the other hand, cost less to purchase. They do, however, require more upkeep than new cars and interest rates on pre-owned vehicles are usually higher — especially if you don’t have much for a down payment or have less than stellar credit. 
Check out our post for things to consider when deciding whether to buy a new or used car.

Ways to finance a used car

There are two main ways to secure a car loan in Canada: through a financial institution or directly through a dealership. Each route has its advantages and it’s a good idea to shop around to ensure you’re making the best decision for your financial situation. 
Before applying for any loan, it’s a good idea to check your credit rating and determine your budget. Whether high or low, your credit rating will dictate the interest rate on your loan; knowing your budget will help you figure out how much you can afford for monthly payments. If your monthly payments are more than your budget allows, you run the risk of defaulting on your loan and damaging your credit rating.
Figuring out your budget can also help you decide how much you’re able to put forward as a down payment —  a larger down payment often translates to lower rates because you’ll be borrowing less.
Now, let’s get into the differences between bank financing and dealership, or in-house, financing.

METHOD 1: BANK FINANCING

If you have a good credit rating securing a used car loan through a bank or credit union might be the right choice for you. Getting a loan through your current financial institution can be a convenient option since all of your finances are in one spot. If you’re an established customer, your bank might even offer you a discount on interest rates or fees and most banks are open to negotiating the terms of your payment period.
However, because of their stricter rules and regulations, banks will only grant loans to customers with favourable credit — even for pre-owned vehicles. So, if you have a low credit rating you might not get approved. 
Some banks are wary of granting loans for used cars because they depreciate in value quickly. It’s a good idea to ask about the financing options for the specific make and model of the car you’re interested in.
It can also take longer to get approved through the bank, so you might be stuck waiting several business days to find out if your loan application has been accepted.

METHOD 2: IN-HOUSE (DEALER) FINANCING

The second option is to get financing directly from the dealership you’re buying a car from. The main advantages of in-house financing are speed and flexibility. 
Because the application and approval process is a lot quicker, many dealerships are able to offer same-day financing. That means you can take a test drive in the morning and drive your new (or new-to-you) car off the lot by the afternoon. This way you won’t have to worry about someone else snatching up the used car you fell in love with while you’re waiting for financing to come through. 
Dealerships offer significantly more flexibility for borrowers with less-than-stellar or non-existent credit (as is the case with students or new Canadians). If you have poor credit or have gone through a bankruptcy, shopping for a vehicle can be frustrating and disappointing. In-house financing can help get you into the car you want, even if you’ve been previously turned down for a loan through your bank. 
At Birchwood Credit Solutions, we look beyond our customers’ credit rating. Once you apply for financing, our team will review your whole financial situation and work with you to pick an appropriate budget and payment options. We can even offer you help and advice on how to repair your credit rating.
Learn more about Birchwood Credit Solutions’ Bad Credit Car Loans and quick, hassle-free application process. You can also contact us to talk directly to a car financing expert.

2019 Ford Explorer Overview – Should You Wait for the 2020 Model?

Today on TheDriveGuyde, I wanted to do something a little different. The current Ford Explorer has been available for quite some time. This midsize 3-row SUV went on sale in 2011. As I am far from the first to review this generation of Explorer, I thought I should compare it to the information that we currently have regarding the all-new 6th generation explorer coming out in the near future. Please like, comment and share this video with others, it would be greatly appreciated!

Advice and Negotiation Tips for Shopping Used Cars

Buying a vehicle is never easy, but buying a used vehicle is downright difficult. You will get your hopes up numerous times by an ad that seems too good to be true, only to be let down when, in fact, it was too good to be true. Someone might advertise their car as “Like new! Mild wear and tear! Runs great!” when in actuality, it is very much old, has extensive wear and tear and doesn’t run at all. Yes, it happens. That is why, when shopping for used cars, you should know where to turn and how to negotiate. Don’t fall for a scam and bring home a lemon, and use the following advice to help ease the pain of your search:

Go to a Dealer

Sure, you know someone who found a great deal on Kijiji, or are even friends with that lucky person who bought a car on Ebay ten years ago and it’s still running great today. However, those people are the exceptions to the rule that states that you should never, ever shop for used cars online. Not only is it impossible to tell the true condition of a vehicle without actually seeing it, but also, you’re risking spending thousands of dollars a car that may take a dump on you ten minutes after purchasing it. Then, because there is no warranty, you’re stuck with an old car that doesn’t run and no money to fix it.

Find the Car You Want

Before you head to the dealership, know what you’re looking for. If you head to the dealership without a clue, you may end up purchasing a vehicle that is over your budget and all wrong for your needs. Identify the traits you need in a new used car: good gas mileage, three rows, ample storage space, etc. Once you do this, set a budget and head to the dealer.

Negotiate Like a Pro

Negotiating for a fair price might be the most daunting part of the car buying process, but it’s necessary. Dealerships expect you to negotiate and price their cars accordingly. Use all the knowledge you have regarding the vehicle to bring the price down.

Use the tips above when shopping for used cars to get the best your money can buy.

Who You Should Bring Along When Shopping for Used Cars

Shopping for used cars can be a daunting experience. With so many makes and models to choose from and with so many ways to finance your vehicle, going it alone can make you feel less confident than you normally might. To make your experience more pleasant, we have some tips about who you might bring along as you shop and take test drives, as this may help you make a more confident purchasing decision.

Your Spouse

Having your spouse along with you as you shop for a used car might make you feel comfortable in terms of helping you decide what kind of car best suits your needs as a couple or a family. You can also bring them to help you keep track of your paperwork and for moral support as well, especially if this is your first time buying a used car on your own.

Your Mechanic

If you have a good friend who is a mechanic, they can be an invaluable individual to have along when you’re browsing used cars. You can ask them questions about which models have the best track record when it comes to safety and reliability. Taking them on test drives might also help you understand and identify any unfamiliar noises you might hear.

Your Adult Children

Having your adult children accompany you on your used car shopping trips can be extremely helpful, especially if you have not purchased a vehicle in some time and are now a senior. They can help you make decisions about which finance option is best for your budget and assist with filling out paperwork if you find yourself running low on energy. If you are not familiar with today’s technology, your kids can help a dealer explain features such as GPS, Bluetooth capability and more.

Shopping for used cars can sometimes feel overwhelming if you go it alone. Bringing along a spouse or a loved one can help you feel more confident that you are getting the most for your money.