Ever since the recent bump in the economy, banks and lenders in general have been more careful about who they are giving their money to. Well after all the recession we had in 2008 was caused partly by irresponsible lending where consumers were taking on loans that were perhaps too much to deal with, and in a lot of cases unable to fulfill their duties in paying off the loans. So they would ask for a larger down payment, or a shorter repayment period, or higher interest rates. But in the last year and a half, it seems there is more confidence in the ability of consumers to make good with their payments and as a direct result of that, lenders have loosened their purse strings a little bit and are more willing to do business.
That being said, they are still smart about who they deal with as well as what commodity it is that the consumer is after. So in the case of homes, they look at the equity or resale value of the house, and try to evaluate whether they would be able to get their money back in case the borrower skips town. It is pretty similar in the case of automobiles. Cars have an index of depreciation, and lenders are able to predict the resale value of the cars based on that. Also the purchase price versus the market value of the car gives them a better understanding when looking at an auto finance application. But in the last year or so, the lenders seem to be interested in the auto financing market and have allowed more loans to be approved in BC. And some interest rates on auto loans are very reasonable.
Of course we have to also consider whether the vehicle is used or new. When purchasing a brand new vehicle, there are sometimes incentives from the manufacturer which allows for 0% financing on their vehicles, depending on, well depending on which cars or trucks, suvs or vans they are marketing stronger and perhaps trying to make room for the next year’s models. In the case of a used or pre-owned vehicle, 0% financing would be next to impossible, because of the fact that the vehicle has already depreciated and also the manufacturer usually does not offer any incentives. But they are still very reasonable.
There were times when you would be a happy customer if you got a car loan around 8-10%, but now consumers are more knowledgeable about the lending policies and have other options available, like bank loans, second mortgages, or even a credit line, which sometimes could result in a much less interest rate. And lenders understand that and offer options to potential car buyers that are very attractive and has somewhat accelerated the car buying market once again. We have quite a few options when it comes to picking the lender with the best interest rate, so you will never have to shop around for the best deal, we take care of that for you. But you still have to understand that there are a lot of other factors involved when determining interest rates on auto loans, and we can work with you and explain to you how we can get stay within your budget and maintain your desired monthly payments. give us a call at 1-888-861-3841. we make auto financing more convenient.
