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Alness Motors

It depends. The main factors are your credit score, financial situation (income, housing situation, etc), the length of the car loan you want, and the model year of the vehicle you want to buy.

Your credit score is a representation of how much risk you present to financial institutions when it comes to paying off any loans or debt. It is used when you try and take out line of credit, credit card, car loan, mortgage, and so on. You will have a file that is accessible by financial institutions that includes everything relevant to establishing your credit rating, including:

• Your current financial information — account balances, credit limits, etc
• Your payment history — for all credit cards, lines of credit, loans, mortgages, etc
• Your identification information — name, address, age, social insurance number, current job, employment history, relationship status, any dependents, etc

You can build and improve your credit score by taking out small loans and starting a history of making regular monthly payments for things like utilities, cell phone bills, and a credit card with a small limit. Credit scores in Canada range between 300 and 900. A score of 300 usually represents people who are just starting to build a credit score whose reliability in paying back loans is still relatively unknown. A score of 900 is the best possible score, for someone who has a long history of exemplary and high-level credit reliability.

When you apply for a used car loan, all of the information on your credit file is requested from the credit bureaus, who then send back your credit score to show how much risk they believe you represent in paying off a loan. Having a higher credit score means you will be offered lower finance rates and higher limits on your loan, so you can finance used cars that are more expensive. Having a lower credit score means you are perceived to be at greater risk of failing to make payments in the future, so you will be offered lower limits and higher interest rates on a used car loan.

There are a few ways to lower the interest rates and monthly payments you make on a used car loan:

• Make a higher down payment at the time of purchase
• Trade in an old car at the same time and use the value towards the payment
• Have a shorter term loan
• Finance a used car with a lower price
• Have someone with better credit score co-sign the loan

We do give used car loans to people who don’t have the cash to make any down payment at the time of purchase. However, the less of a down payment does affect how high your interest rates will be, and therefore how much you pay in monthly interest payments on the loan.