915 WALKERS LINE, Burlington, ON, L7N3V8, Canada
My Garage

What they don't want you to know about zero percent interest car loans in Lincoln

What they don't want you to know about zero percent interest car loans in Lincoln

Prior to the pandemic (ah, the good old days), you could buy a car with a zero percent interest car loan, and those days will come back soon.

Our Lincoln auto loans team are going to explain how zero percent interest car loans work and car financing in general. When you are in the market for a new vehicle, follow this advice and you will get a great deal.

Zero percent interest, the Bank of Canada and you

The Bank of Canada sets interest rates in the country; the prime rate is used as a benchmark for loan underwriting and was kept artificially low during the pandemic at around 0.25%.

The way car lenders could offer zero percent is by increasing the retail price of the car, so they are generating a profit on the front end of the deal.

Major carmakers could also self-finance these deals by borrowing money from the capital markets in using those funds to finance these deals.

Only select models had zero percent; those were usually vehicles that were not selling as fast as desired or came with a higher profit margin per unit.

To access these deals, you would need a stable income and a high credit score, in the 720 or higher range.

How Canadian car financing works in 2022

There are a few important things you should bear in mind when trying to buy a car in 2022. Inflation is at a generational high.

We haven't seen inflation like this since the Maple Leafs won the Stanley Cup (little humor for the Leaf's fans out there), but in all seriousness, everything is getting more expensive, and wages aren't keeping pace.

If you need to buy a new car, you should revisit your budget and make some real-time adjustments. Something that you will need to look at is how much cash you can put towards the new car payment.

A new car payment can easily set you back $500 a month, if not more, and that doesn't take into account the running costs that come with owning the car.

Your credit score is another variable that impacts your ability to secure a competitive car loan.

The Bank of Canada has been raising interest rates; even Canadians with pristine credit are going to have a tough time being able to secure a loan interest-rate car loan.

If you have credit issues, it would be a good idea to speak with a local professional.

Where to get the best deals on a new car loan in Lincoln

Your best option is closer than you think; head over to a local car dealership and discuss your loan options with them.

These dealerships have in-house credit experts who can show you the steps that need to be taken to dramatically improve your credit score.

The dealership has direct access to lenders throughout Canada, so you don't have to worry if you are getting a good deal.

Now that you know the reality of zero percent financing and where to get the best car loans in Canada, why not head on over to your local dealership today and go for a test drive.

Contact Unique Chrysler for help, advice and competitive Lincoln car finance and leasing.

Categories: Auto Loan

Tags: ,