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Financing Your Car: What Can I Afford?

Seeking a car loan that is affordable is the essence of financing your car. To do this, there exist three main options to look into in order to make the smartest choice!

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Financing Options For You

  • Dealership Financing

When financing your car through a dealership, it becomes extremely convenient since you get to take advantage of getting all your legal papers handled and signed in one place. You also gain access to competitive marketed rates, like those of zero percent financing.

However, while being exposed to an atmosphere that is often driven on commissions, it can become likely for you to feel rushed and influenced to consider buying extras that you didn’t need in the first place. Dealerships also don’t always offer lowest interest rate out there which greatly impacts how much you pay in the long run.

  • Banks and Credit Unions Financing

Contrary to dealerships, banks and credit unions are more honest with you in terms of discussing your options with you. Their interest rates are also much more affordable than those of a dealership. Depending on your credit score however, banks and credit unions have the ability to turn you down.

  • Leasing

Leasing your vehicle is another attractive option as its monthly payments are usually much lower than other finance options. However, once your lease comes to an end, you must return the vehicle and pay any remaining fees, unless you opt for a lease that gives you a purchasing option at the end of the agreement.

In order to avoid any additional charges, you must be vigilant with mileage limits and damages, while upholding an insurance plan that is approved by the company that you are leasing from.

Monthly Savings Plan

Taking into consideration all of your expenses every month is one thing, but writing them all out and concretely adding them up is another. Before thinking about another big purchase, making a monthly spending plan will serve as a personalized visual for you to refer to.

Start off by calculating your monthly income and writing out all of your monthly expenses, while adding up their costs after tax. Go on to subtract these costs from your monthly income. This final figure will give you a better idea as to how much you have left to put towards financing your new vehicle.

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From this point on, you can decide whether or not it is worth adjusting your monthly expenses in order for you to afford your next big purchase. This monthly saving plans serves as a realistic viewpoint for you gage just how much money you have left to pay off your loan on a monthly basis.

Choosing a financing plan that you can afford is a quintessential part of budgeting your money for your new car purchase. Take your time and consider all your options before making any official decision.

External links:

  1. http://auto.howstuffworks.com/buying-selling/car-financing.htm
  2. http://www.autotrader.ca/newsfeatures/20150324/shopping-guide-leasing-vs-financing/#HemjqKXSwEC6Rzi8.97
  3. http://www.tada.ca/7-steps-to-financing-your-next-vehicle

 

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