When the time comes to apply for an auto loan, it's easy to forget about properly budgeting for a car payment if the vehicle you have been driving has been paid off.
Begin Budgeting for Car Payments
A car purchase is more than just the monthly payment on the loan. You will also need to consider insurance, maintenance, registration fees and fuel costs. While these are expenses that any car buyer will need to factor into their budgets, if you are dealing with bad credit and facing higher interest fees on your loan, you will want to ensure that your budget has room for the additional costs of vehicle ownership.
When you finance a vehicle, the lender will require that you have a full coverage insurance policy. This will ensure that they will get reimbursed for as much of the vehicle's value as possible in the event of a total loss. If you have only been paying for basic coverage on your previous car, you should prepare to pay a higher premium on the new one.
Before choosing a policy, make sure to shop for the best rate. Rates will vary based on your age, location, driving record and the type of vehicle you are buying. Get a quote from your current insurance provider and compare that rate with competitors.
Whether your next car was previously owned or it just rolled off the assembly line, do the necessary research on how much it will cost to maintain and potentially repair it. Be financially prepared for common maintenance routines as well as any unforeseen issues. You don't want an emergency repair to permanently damage your bank account.
You will want to be sure that you are budgeting properly for any annual or one-time fees for your new vehicle. For example, in Ontario, a vehicle permit and license plate will run you $34, and the plate sticker will cost you $54 (Northern Ontario) or $108 (Southern Ontario). Pricing will vary depending on your province or territory. Visit the government website of your specific province or territory for more details. If you don't think your budget can handle any of the costs, you may want to rethink your car purchase.
If you don't have the money to fill up your tank with the gas it needs to function, you won't be going anywhere. While this cost may go down from what you were paying if you are buying a more fuel efficient vehicle, it is still a good idea to budget what your new expense in this area will be.
It's Time to Get Going
If you are prepared to make your next car purchase, but have had trouble finding the car dealer that can help you, Canada Auto Loan is the solution to your problem. We have a countrywide network of car dealerships that have the financial experts with the expertise to get you back on the road. Once you complete the secure, simple and fast online application, we will match you with the dealership nearest your local area that will do everything possible to get you approved for the car you need.