3 Tips for Getting a Better Car Loan

If you’re like many people, buying a car out of pocket is not financially practical. When most people go to buy their cars – used or new – they need to take out a car loan for the purchase of the car. Car Loans make buying a car possible without straining a person’s budget.

A car loan requires that a buyer (borrower) commit to repaying a loan in certain increments over a period of several months or several years. Each loan repayment is based on a percentage of the initial amount of money borrowed (principal) plus interest applied to that initial amount. In order to get the best possible car loan arrangement, it is important for individuals to be able to borrow the amount of money they need at the lowest interest rate possible.

In order to be able to increase the principal loan amount and get the lowest possible interest rate for your circumstances, it is important to be able to prove to a lender that you are financially stable and capable of paying off your loan. Lenders will not only look for information about your current income, but they will also want to know what your credit history is. If you have a stable income and a strong credit history, you will most likely be able to get a higher loan amount and lower interest rate.

Here are 3 tips to help you increase your loan amount and decrease your interest rate:

Have a Stable Job

A stable job shows that you have income coming in each month and expect to continue to have income each month. Lenders like to know that, as long as your circumstances stay the same, you will be able to keep up with monthly loan repayments.

Stay Put

Lenders want to know that if they need to contact you, they will be able to find you. Therefore, by staying in one residence for a prolonged amount of time, you will increase lenders’ confidence in your stability and find-ability.

Pay Down Other Debts

If you have outstanding debts on your credit card or owe money to other entities, then focus on paying down those debts. Lenders want to know that you will be able to focus your financial assets towards repaying your loan to them by having minimal other financial burdens.

Contact us for more information about how you can get a better car loan through careful planning and strategies.

Here are the most-anticipated EVs, SUVs and cars of 2021

Source: The Globe and Mail

Most of us will be happy to put 2020 in the rearview and look forward to the coming year. It may be of small solace, but at least when it comes to new cars – both electric and gasoline – this year is shaping up to be a good one.

In addition to the deluge of new high-performance machinery for enthusiasts, there are major updates coming for two of the perennial best-selling vehicles in Canada, as well as a long list of new electric cars and SUVs. Here are some of the most anticipated new models you can expect to see in showrooms this year.

Perennial best-sellers

The 2022 Honda Civic is due to arrive in Canada in the spring.

The Honda Civic is a favourite of young and first-time car buyers, but the all-new 2022 Civic appears to have grown up. The new version of Canada’s most popular passenger car is slightly larger and less aggressive-looking. The company hasn’t revealed many details yet, but the car should go on sale in Canada in March or April.

The Ford F-150 has maintained its position as the best-selling light truck in the country, according to market-research firm DesRosiers Automotive Consultants, but Ford is not resting on its laurels. The revamped 2021 F-150 is available with a new hybrid powertrain that’s 19 percent more fuel-efficient than its non-hybrid counterpart.

CARS FOR ENTHUSIASTS

Among gearheads, the big news is that 2021 will bring all-new versions of two cult favourites: the Porsche 911 GT3 and BMW M3. The GT3 is keeping the flame alive for driving purists with a naturally-aspirated 500-horsepower engine, rear-drive chassis and manual gearbox. Photos of the prototype model indicate it’ll have a comically large rear wing, even by Porsche standards.

The all-new BMW M3 sedan and M4 coupe look even more outlandish. The new nostril-like grille on both cars is best described as, well, ugly. But the fact they’ll be available in both rear- and all-wheel-drive versions for the first time will invariably broaden their appeal.

Cadillac’s CT4-V and CT5-V were somewhat underwhelming, but the new Blackwing-badged versions of these two sport sedans should please gearheads. Arriving in 2021 with a V8 engine and a manual gearbox, the Blackwing sedans could offer a genuine alternative to the likes of M and AMG.

The new Subaru BRZ gets a much-needed power boost with a larger 2.4-litre engine. BRENDAN MCALEER/THE GLOBE AND MAIL

For enthusiasts on a budget, a revised Subaru BRZ coupe will arrive in the fall as a 2022 model-year vehicle. It looks much the same as before but gets a bigger 2.4-litre engine with more power and torque, which is what the car desperately needed. With any luck, Subaru can keep the price under $30,000.

If you’re looking for something more practical, the next-generation Volkswagen Golf GTI and all-wheel-drive Golf R are slated to arrive in Canada in late 2021, according to a company spokesperson. Both versions will have high-tech, screen-filled cabins and a little more horsepower. The Golf’s more up-market stablemates – the Audi A3 and S3 sedans – should arrive in showrooms around the same time too.

VEHICLES FOR FAMILIES

The Kia Sorento has been redesigned with an optional plug-in-hybrid powertrain.

Of course, a new year brings a flood of new SUVs. “Lockdown or no lockdown, the consumer stampede from passenger cars to light trucks continued apace,” Andrew King, managing partner at DesRosiers, wrote in an e-mail. Light trucks, including SUVs, accounted for nearly 80 percent of all light-vehicle sales during the third quarter of 2020, according to the firm’s estimates.

This year will see the return of classic SUVs such as the new Ford Bronco as well as the two-door Land Rover Defender 90. The Jeep Grand Wagoneer, first produced in 1962 and beloved for its wood-panel siding, will be reborn as a three-row luxury SUV in 2021.

As if more proof were needed that drivers are looking for more spacious automobiles, both Kia and Hyundai have new SUVs that are larger than the models they replace. Kia’s popular seven-seat Sorento has been redesigned with an optional new plug-in-hybrid powertrain, and Hyundai will only sell the larger, long-wheelbase version of its all-new 2022 Tucson SUV in Canada. Hyundai’s luxury brand, Genesis, will have two new SUVs in showrooms: the 2021 mid-size GV80 and the smaller 2022 GV70. The latter is expected to arrive in the second half of the year.

The 2022 Hyundai Tucson will only be sold in its long-wheelbase form in Canada.

Even Aston Martin is finally getting in on the SUV craze in 2021. The British brand, and its new owners, will be counting on the new DBX SUV to bolster the company’s bottom line.

SUVs will rule the road this year, but minivans are not yet extinct (although they are definitely an endangered species). The Toyota Sienna had gone without an overhaul for 10 years, but finally, in December 2020, an all-new version of this minivan arrived in showrooms. It’s not like the minivans of your youth though; this one is only available as a hybrid and starts at nearly $40,000.

ELECTRIC VEHICLES

The Audi e-tron GT is expected to arrive in Canada next year.
DANIEL WOLLSTEIN/COURTESY OF MANUFACTURER

If Canada has any hope of meeting its zero-emissions-vehicle (ZEV) targets, electric vehicles and plug-ins are going to have to become much more popular, and fast. They only account for about 3 percent of new-vehicle purchases, but the federal government wants that figure to rise to 10 percent by 2025 and 30 percent by 2030.

The high price of electric vehicles makes them prohibitively expensive, and upcoming EVs – including the Audi e-tron GT, Tesla Roadster, Porsche Taycan Cross Turismo and the Rivian R1T and R1S – are not going to buck that trend. The Rivians will start at around US$70,000, while the other cars listed won’t be any cheaper.

BMW will begin production of its next-gen EVs – the iX SUV and i4 sedan – in late 2021, so they likely won’t land in this country until next year. The Mercedes-Benz EQC electric SUV has been delayed once already, so would-be buyers will have to keep waiting. A company spokesperson confirmed the upcoming EQS, a full-size (and surely high-priced) sedan, will be the first of Mercedes’s new EQ electric models to arrive in Canada, but no date was given.

Pricing for Rivian’s electric pickups will start around US$70,000.

However, there is some good news for people looking for a (somewhat) more affordable EV this year. The new Mustang Mach-E starts at $50,495, while the Volvo XC40 Recharge costs $64,950. Both are on sale now.

In 2020, General Motors made a big deal out of its new Ultium batteries and flexible EV platform, but we still don’t know much about the upcoming Chevrolet Bolt EUV, a compact electric SUV slated to arrive in summer 2021. For reference, the current Bolt hatchback starts at $44,998.

No price has been announced for the Nissan Ariya electric SUV either, but it should be available in late 2021 with a manufacturer-estimated range of 482 kilometres.

The Nissan Ariya SUV is expected to arrive late next year.
NOEL CELIS/AFP/GETTY IMAGES

Last but not least, Volkswagen Group is in the early days of a decade-long effort to launch 75 all-electric vehicles across its many brands. Volkswagen’s ID.3, an electric car the company said was “for the millions, not the millionaires,” has thus far only been available in Europe, but the ID.4 electric SUV is slated to arrive in Canada this summer with an estimated range of more than 400 km. VW has been tight-lipped about the price, but in the U.S., it will start at US$39,995.

Using Car Loans to Your Advantage

In Canada, having a car is almost a necessity if you want to compete for well-paying jobs but still live in a neighborhood with reasonable home prices. This is one of the great services provided by automobiles; a bridge between your work and your home. However, cars are also very expensive items. Luckily, car loans offer an individual great personal choice and flexibility in determining a financial plan that best works for their unique financial situation. This transforms the possibility of having a car from a fantasy to a reality.

Different Types of Loans

Most banks and lending agencies will work with you to tailor-make a financial package that is optimal. That is, there is a range of financial options at your disposal so you can decide whether you want to make small monthly payments spaced out over a long duration, or larger monthly payments that will pay off the full value of the automobile quicker. In today’s market, interest rates are relatively low on car loans, creating an ideal environment to finance a car purchase so that you can reap the benefits.

Travel in Style

If you do not already have a car, car financing is an economic opportunity you do not want to miss out on. Simply put, a very powerful economic and leisurely tool is within your reach, for monthly payments that would seem miniscule compared to other monthly bills. The main thing with a car loan is that your payment for the full value of the car is spaced out over a long duration; this appeals to and targets hardworking people who plan on being employed for the next 5, 10, 15, etc. years.

If you are this type of person, there is no reason why you should not be traveling back and forth from work and home in a car. You will save yourself valuable time and also have the ability to work at places you did not have the possibility to before.

Ford F-150 is Canada’s Top Searched vehicle, while luxury cars hold steady according to 2020 Canadian car shopper data

Source: NewsWire

2021 Ford F-150 - All The Important Stuff Is Under The Skin

TORONTO, Dec. 16, 2020 /CNW/ – Despite the impact of the global pandemic, searches for luxury vehicles show little signs of slowing down in Canada, according to 2020 data released today from autoTRADER.ca, Canada’s largest automotive marketplace. The company’s annual Top Searched vehicles list noted favourites from 2019, including the beloved Ford F-150, Honda Civic and Toyota RAV4 remained in the top 10, while half (50 percent) of this year’s list consisted of premium nameplates, pointing to a range in Canadian vehicle preference. Additionally, BMW and Mercedes-Benz were the first and second most searched vehicle brands on autoTRADER.ca this year.

2020 Top Searched Vehicles in Canada

  1. Ford F-150
  2. Ford Mustang
  3. BMW 3 Series
  4. Mercedes-Benz C-Class
  5. Porsche 911
  6. Honda Civic
  7. BMW M
  8. Chevrolet Corvette
  9. Mercedes-Benz E-Class
  10. Toyota RAV4

Provincial Search Breakout

2020 provincial search data revealed key regional preferences for car shoppers across the country.

BC leads with luxury. BC leads the country when it comes to interest in luxury vehicles, with the Porsche 911 rising three spots from #5 to #2 on the province’s Top Searched list. The BMW M (#4), BMW X5 (#8), Mercedes-Benz C-Class (#5), and Mercedes-Benz E-Class (#7) were new entrants in 2020. The rest of Canada shares the west coast love for premium vehicles with at least one luxury model appearing on every regional top searched list with the exception of Saskatchewan.

Alberta lusts after larger vehicles. In a province where trucks have always led the way, it’s no surprise that the Ford F-150 is Alberta’s top-searched vehicle for another year running. Surprisingly, the Ram 1500, a truck that has traditionally held a lot of popularity in the region dropped from this year’s Top Searched list as Albertans welcomed new luxury entrants like the Mercedes-Benz C-Class (#6), BMW M (#7) and BMW X5 (#10). Unsurprisingly, the region has a long-term affinity for larger vehicles with the Toyota RAV4 (#4), Jeep Grand Cherokee (#8) and BMW X5 (#10) also making the top 10.

Saskatchewan flexes muscle. While Saskatchewan may be the only region in Canada without a luxury vehicle on their top 10 list, they do like to get behind the wheel of some North American muscle. The Ford Mustang (#2), Chevrolet Corvette (#3) and Chevrolet Camaro (#5) all made the top 10 list this year. The province also stands out as having the lowest number of cars on the list, instead favouring utility vehicles such as the Chevrolet Silverado 1500 (#4), Jeep Wrangler (#6), GMC Sierra 1500 (#7) and Jeep Grand Cherokee (#8).

Ontario is captivated by cars. Cars reign supreme in Ontario making up 80 percent of the province’s top searched list, followed by British Columbia and Alberta. This year, half of Ontario’s top 10 list consisted of premium vehicles. True to Ontarian preferences, the province was only one of two regions across the nation where the Ford F-150 did not rank #1 – instead, Ontarians favour the sportier Ford Mustang. Practical vehicles, such as the Honda CR-V, Toyota Corolla and Toyota Camry, were just shy of making this year’s regional top 10 list.

Québec keeps it practical. The perennial Honda Civic continues to dominate Québec’s Top Searched list for the fourth consecutive year, reinforcing the prioritization of function over flash in la belle province. The arrival of the Jeep Wrangler (#9) and Jeep Grand Cherokee (#10) hints at an increased interest in recreational vehicles, and the Porsche 911 (#7) shows that while Québecers prefer practicality, they are not averse to the finer things.

Manitoba goes off-road. Manitoba saw a spike in searches for off-road vehicles with the Jeep Wrangler (#8) and Jeep Grand Cherokee (#10) debuting on the region’s Top Searched list. The province witnessed a slight increase in luxury vehicle interest, adding two premium models to its Top Searched list. The Ford F-150 remained Manitoba’s #1 searched vehicle, while the Ram 1500, GMC Sierra 1500, Ford Escape and Toyota Corolla slipped below the top 10.

Atlantic Canada finds balance. The east coast saw the most even representation of vehicle types across their top 10 list. The classic Ford Mustang (#2), functional Toyota Tacoma (#3), practical Honda Civic (#4), and recreational Jeep Wrangler (#6) all made an appearance, a reflection of well-rounded vehicle preferences in the Maritimes.

Evolution of Car Shopper Sentiment

autoTRADER.ca conducted ongoing consumer studies throughout 2020 to evaluate the impact of COVID-19 on Canadian car shopper sentiment and inform what may be expected moving forward. Findings include:

Green, green growth. 

2020 was yet another big year for electric vehicles with more hybrids, plug-in hybrids, and full EVs listed across the marketplace. Green vehicles launched this year span all different body styles and prices, giving Canadians more options than ever before including the Toyota RAV4 Prime, Porsche Taycan, Audi e-Tron Sportback, Tesla Model Y, Hyundai Elantra Hybrid, Toyota Corolla Hybrid, Hyundai Sonata Hybrid, Ford Mustang Mach-E, and Ford F-150 Hybrid. Further, new developments that may drive greater EV adoption in the coming years include the launch of faster 800V charging rates by Porsche and Hyundai, and Québec’s commitment to stop selling new gas-powered vehicles by 2035. autoTRADER.ca data also indicates national searches for electric and hybrid fuel types increased 19 percent year-over-year. EV adoption is expected to increase through 2021 and beyond as more makes and models are introduced, charging speeds increase, travel range expands, and greater infrastructure is developed.

Car shoppers go digital. 

While a portion of car shoppers still seek an in-person dealership experience, a survey of autoTRADER.ca users revealed that 71 percent are interested in buying a car digitally since the start of the pandemic. This year, autoTRADER.ca became the first major marketplace in Canada to launch digital retail on its platform, meaning for the first time, Canadians can buy a vehicle 100 percent online. Based on the higher consumer engagement experienced by dealers who currently have digital retailing enabled, autoTRADER.ca anticipates this sentiment will hold strong. The added safety and convenience of completing varying portions of the vehicle transaction online is resonating with car shoppers across the country.

3 Keys To Getting The Right Car Loan

There are many companies offering car loans. However, it may be difficult for some to distinguish between these companies and their offers in order to find the right loan.

Here are four keys we recommend you use to identifying the right company and loan.

Know Yourself

Before you get started with your search you should know have a good understanding of your financial standing. Among other things, you should know your credit score, how much you can afford in monthly payments, and the total amount of financing you need. The more you know about yourself, the smoother the process is likely to be.

Know The Lender

You should make a list of possible lenders and do a search of their background. For many lenders, you can get an idea of the terms and fees they usually offer, their loan approval rate, or even their customer service practices by searching the internet. In most cases, our dealership is able to help you get the financing you need.

If your credit score isn’t ideal, don’t let that detract you from finding a lender. We specialize in working with individuals who have poor credit and look at each situation on its own prior to choosing the lender that has the options for you.

Know The Terms The loan that you agree to should be right for you. Don’t be afraid to shop around for the loan that fits your needs in regard to the monthly payment amount as well as overall terms such as interest rate, extra fees, and repayment period.

he best thing you can do when searching for a car loan is to start early. Once you have an idea of what your financing needs are, you should begin to identify potential options. You don’t want to wait until you’ve found the car you want to begin searching for financing options.

Benefits of Using a Loan for Your Next Car Purchase

The majority of car buyers finance this major purchase. Given the statistics, it’s likely you will be looking at options for car loans when shopping for a vehicle. There are many benefits to purchasing a vehicle with financing. Here are some top advantages to using a loan to purchase your next car.

When you finance a car, you can obtain more vehicle than you may have the cash for. A better car can be safer, more reliable and save on maintenance and repairs. With financing, you make a down payment, then periodic (usually monthly) payments for the duration of the loan. As opposed to paying straight cash for a car, down payments required when obtaining a loan are usually a small percentage of the price being paid for the vehicle.

There is flexibility in terms when financing car. Payments can be made over various lengths of time such as 36, 60 or 72 months. Interest rates that lenders offer are often flexible too, varying with credit score and the desired length of loan. In an economy with low interest rates, your money may be put to better uses than paying cash for a car. Car loans free up that cash so that it may be used for higher interest earning investments, businesses or home purchases.

If you have poor credit or little credit history, financing an automobile may look less attractive. Higher rates are charged to those with low credit scores due to the increased risk to the lender. With a poor credit score, you may need to put down a larger sum of cash in order to keep the payment affordable. However, when you make consistent on time payments, your loan will help improve your credit score over time.

By offering greater flexibility and purchasing power, car loans play a critical part of the automobile purchase process for most.

Old-School Car Maintenance Tricks All Drivers Should Know

Source: Bob Vila

There’s no need to go to a mechanic for all of your car maintenance needs. You can perform these tried-and-true fixes yourself with things you probably have laying around the house.

Little Effort = Big Savings

diy car maintenance
Photo: istockphoto.com

Performing routine maintenance on your vehicle is important to keep it running right. But it’s hard to keep up with all of the car maintenance products on the market these days. You could spend a fortune and visit your mechanic monthly, but oftentimes there’s an old-school, DIY solution for your car maintenance needs that will keep it running reliably with minimal time and money spent. Check out this list of car maintenance tricks your grandfather surely knew—and you should, too.

Get More Out of Your Wiper Blades

clean windshields
Photo: istockphoto.com

As wiper blades age, they lose their ability to clear your windshield properly. But with a couple of household products and a little elbow grease, you can help them last longer. Start by cleaning the base of the windshield with some window glass cleaner, just underneath where the wiper blades rest. Then, wet a paper towel with some rubbing alcohol and wipe the blades down until they come clean. You should see a marked difference in how they clear your view.

A Penny for Your Treads

penny tire tread
Photo: istockphoto.com

You can’t expect your car to give you a safe ride if the tire treads are too worn down. To quickly check the state of your tire treads, place a penny with Lincoln’s head facing down into the tire tread. If his head stays clearly above the tread, you need to replace your tires.

Clear Up Fogged Headlights with Toothpaste

cleaning fogged headlights
Photo: istockphoto.com

Over time, the surface of your headlights will oxidize and become foggy or yellowed. You can clean them up with toothpaste, which is a very mild abrasive. First, clean the headlights with soap and water. Then, squeeze some toothpaste onto a soft cloth and rub it into the wet headlight in a circular motion. Keep adding toothpaste and water as needed. Once finished, rinse thoroughly, and dry it with a soft cloth. Apply a headlight sealant for future protection.

Remove Bugs with WD-40

clean bugs off car
Photo: istockphoto.com

Most people have a can of WD-40 in the garage, as it’s good for so many jobs around the house. But this magic lubricant can also help you remove dried up, dead bugs from the front of your car. Just spray it on the affected areas and let it sit for about ten minutes. Then, with a sponge or soft cloth and a little elbow grease, you can wipe those bugs away much more easily. Afterward, wash your vehicle as usual.

Defrost Your Windshield with Rubbing Alcohol

defrost car windshield
Photo: istockphoto.com

When winter comes and freezes up your windshield, have a quick fix ready to go. Add one part water and two parts rubbing alcohol (70 percent isopropyl alcohol) to a spray bottle and shake to mix. Spray the solution onto your iced up windshield and the frost and ice will start to break apart and melt.

Bounce Test Your Shocks

test shocks car
Photo: istockphoto.com

Your car’s shocks and struts help to stabilize the vehicle as you drive, keeping you from bouncing down the road as you turn, accelerate, or brake. You can test your shocks with a simple “bounce test.” Stand at the seam of the bumper and push it down. If it bounces back twice or more, then you probably need to replace your shocks or struts.

Test Your Headlights on Your Garage Door

car garage door headlights test
Photo: istockphoto.com

Headlights may become misaligned just the way wheels do. You can quickly assess whether your headlights are properly aligned by parking your car about 25 feet away from a flat vertical wall, like your garage door. If they are shining unevenly, consult a mechanic or your owner’s manual for instructions on realigning them.

Why Buy From The Dealer?

If you are in the market for a used car, then we’d like to urge you to take a closer look at the used cars in Brandon that we have in our inventory. At our dealership, we work hard to make sure that we have the best inventory of a wide variety of used cars of all types – including used sedans, used vans, used trucks, and more.

Here are a few reasons why we think you should buy your used car from Sisson Auto Financing and Sales:

Financing

One of the most important things for many of our customers is the price of the used car. We work hard to make sure that each of our used cars is priced to sell, through our Fair Negotiation Free price, which means that we offer the lowest possible prices for used cars of all types. In addition to our excellent prices, we also offer great financing opportunities for every used car that we sell – including used car loans and trade-in values to help lower the cost of the new cars.

If you think that you may want to get financing for your used car, get started with the process online through our Web site. We have an online credit application that you can complete from the comfort of your home or office when you’re ready to get started applying for a loan. You can also learn more about the trade-in value of your used car by checking the approximate value online through our Trade In tool.

Inventory

We work hard to keep a fresh inventory of new vehicles on our lot so that our customers can always find the right used cars for their needs. We also post information about these used cars online through our inventory link. Check our online inventory for more information about each of these cars, including photos.

Personalized service

In order to help ensure that you get the right used car for your needs, it’s important that you select a car that not only runs well, but that will also last for years to come. In order to ensure that you get the right car, we will tell you as much as you need to know about each of the used cars in our inventory and provide a full inspection of each car before we sell it to you. We also provide CARFAX History reports! Contact us, your used car dealer in Brandon today to learn more about our used cars or to browse through our inventory at your leisure!

Tips for Test Driving Used Cars

Test driving the car you want to buy can be overwhelming. You have a lot on your mind, so being prepared can help you make the most of your time in the car. Before you fall in love with the car, it’s important to take it out on the road. A sportscar looks sleek and sexy, but it will have less space than you may be used to. This could be uncomfortable over time.

Before your test drive, check the car out. This is for your peace of mind. The tires can tell you a lot about the car. If the tread is uneven or worn, there may an alignment problem. Check underneath for leaks. Our mechanics check every car before it goes out on the lot for sale, but we want you to feel good about your purchase. You can also look at the condition of the hoses to get a feel for how the car has been maintained. They shouldn’t be cracked and worn.

You probably want to drive around ten kilometres to really get a feel for how the car handles. Turn the music off for most of the drive so that you can listen to the car. Make sure you drive as you normally do and never violate traffic rules. Keep notes about how the vehicle meets your priorities. You can turn on the sound system for a few minutes while driving to test the sound system. Don’t forget to park and back up, make a right and left turn during the test drive to really see how the car does under different conditions.

Our dealership offers a wide selection of used cars when you’re shopping for your next vehicle. You can test drive more than one so that you can find the right car for your lifestyle and that’s comfortable for you to drive. We want to get you back on the road quickly, without a lot of hassle which is why you can also get financing right here.

Is Early Auto Loan Payoff Worth It?

Source: Auto Credit Express

Is Early Auto Loan Payoff Worth It?

Paying off your car loan early can really be worth it, especially if you have a high-interest rate. The longer you wait to pay off an auto loan, the more it costs you, so doing everything you can to cut down on those costs can benefit you in the long run.

Early Car Loan Payoff Can Save You Money

Is Early Auto Loan Payoff Worth It?

One of the biggest advantages of paying off your car loan early is that you can save money overall.

All loans come at a price, and interest is the cost of borrowing money. Unfortunately, interest isn’t a set fee – your credit score is the biggest factor in determining just how much it’s going to cost you to borrow money. The lower your credit score, the higher your interest rate generally is.

When you have a high-interest rate, you can save in interest charges by paying off your loan early. Paying ahead of schedule reduces your interest payments because most auto loans use simple interest. This means that interest charges accrue daily based on the total amount of principal (the amount you borrowed not including interest charges) you owe. Therefore, the longer you owe on the loan, the more interest charges can stack up.

One of the most efficient ways to avoid paying too much in interest is to borrow less money. This isn’t always the easiest answer, but the more money you can use as a down payment, the less you have to borrow. In fact, putting money down is one of the best things you can do for yourself when it comes to taking out a car loan.

Ways to Pay Off Your Auto Loan Early

Though a substantial down payment can save you money because you’re borrowing less, it can still be a good idea to pay off a loan as quickly as possible if you want to save even more in interest charges.

If you’re looking for a way to pay off your loan early, you have some options:

  • Split your payment – If you split your monthly payment in half and make a half payment every two weeks, you actually end up making 13 monthly payments in a year instead of 12.
  • Make extra payments – Paying extra on your loan outside of your scheduled payments is a great way to take advantage of any extra money that comes your way, such as a tax refund, stimulus check, or an unexpected windfall.
  • Round up – Anything helps when you’re trying to pay off your auto loan early. If you want to make an extra impact with each payment, round up to the next highest dollar amount you’re comfortable with. For example, if your car loan payment is $379, you could make a $400 payment each month, and knock off some of the balance that accrues interest.

Once you decide which method works for you, you can set yourself up to save. The beauty of simple interest auto loans is that there’s typically no penalty for prepayment. So, even if you don’t choose just one method of early payment to stick to, you can simply make the decision that helps you the most in your situation.