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Most Winnipeg residents understand that when they go shopping for a car, they will have to haggle to get the best deal possible. What they don’t consider is that it is just as imperative that they shop around to find the best financial options available to take out a personal loan. Once the price is agreed upon, not much thought or research is put into the loan interest rate or terms -- which is a huge mistake, according to financial consultants.
Just like you shouldn’t go to the grocery store hungry, entering a car dealership without first understanding your financing options can ensure that you get caught paying way more for your loan than you need to. Before you even go look at cars, it is a good idea to compare rates for your personal loans in Winnipeg, so that you know what to do once you negotiate the price you want, and so you understand what other finance options are available to get the car you want.
Dealers in Winnipeg make their money not just through the sales of the car, but also from the financing that they set up with the consumer. They usually mark up their interest rate according to what you qualify for, instead of having a set rate for all consumers. That can end up costing you much more than if you did some investigating on your own before you buy a car.
Most Winnipeg car buyers have a set amount of money that they can pay per month on a car; however, that type of thinking negates the fact that the monthly budget isn’t just about paying down the principal but also paying the interest charges. If you aren’t careful, and you give the dealership a number about how much you can pay per month, they will calculate how much to charge you for financing (even if you aren’t) and adjust the car price accordingly.
Annual percentage rates vary from day to day, which is why it is important for you to keep an eye on them. The difference in just one point can have a significant impact on the amount that you pay over time. So before you set out shopping for the day, take a look at the variable rate and compare it to the previous 30 days. You don’t want to end up shopping at the highest rate; it just doesn’t make good financial sense.
Another important consideration when shopping for the best car loan is the duration of the loan. The amount of time that you pay on a car only increases the final amount that you pay when you finally pay it off. If you choose a loan duration of 72 months, the monthly payments might be lower, but by the end of the repayment period you will have paid a significantly higher amount than if the duration were 36 months.
Also, the depreciation of the car itself will leave you with a car that you paid much more for and which is now worth much less. When possible, you want to shorten the duration loan period, not lengthen it. Sure, that might mean that you can’t get the luxury car of your dreams. But if you can’t afford to pay it off in a reasonable amount of time, then you really can’t afford it anyway.
There are a plethora of options available for taking out a personal loan. Hundreds of institutions cater to those who want to take out financing for car loans. It isn’t just the dealership lenders and finance companies you can try. There are also the options to check with credit unions, other finance companies, and local banks.
The more you shop around, the more likely you are to get the best deal, which will equal getting the car that you really want. Don’t rule out the prospect of using online lenders. Not only are they easy to compare and apply for, sometimes not having to pay the cost of brick and mortar can have a benefit for borrowers.
The key before you shop for a car is knowing not only how much you can finance, but also what your finance options are. If you walk into a dealership without knowing you have other places to choose from, that could leave you paying more for a less expensive car over time, or financing to the point of being upside down on your car and having nothing to show for it at the end of your repayment term.