3 Signs of Bad Auto Loan
An auto loan is a great option, as it gives you the opportunity to pick the vehicle you always wanted from the dealership. However, not all lenders in Canada have your best interests in mind, as they want to make quick profits from their customers. They use several techniques on unsuspecting consumers, which are hard to spot unless you already know about them. Here are three signs which indicate you are in a bad auto loan situation:
One common technique is to use conditional financing, which gives the lender the power to cancel your auto loan, as you didn’t meet their requirements. First, the financial institution will ask you to fill in the necessary documents and state that you need to pay a small amount every month.
After a week, the lender will inform you that you have to increase the size of monthly payments to avoid cancellation of the auto loan. As a result, you have to return the vehicle, to avoid legal trouble in the immediate future.
Full of add-ons in contract
Dealerships and lenders use add-ons as it allows them to walk away with bigger commissions at the end of every sale. Due to this reason, you will find everyone offering rust-proof paint, extended warranties, and third-party insurance.
If you come across these types of add-ons in your contract, you should let the lender/dealership know that you don’t want these options with your auto loan. It isn’t worth the money, as you will find it challenging to make the monthly payments on time.
Modifies terms and conditions
Are the terms and conditions of your auto loan different from your agreement with the lender or dealership? Sometimes, financial institutions will pre-approve you for a car loan, to make it easier to pick up a vehicle. Shady dealerships and lenders will modify the terms and conditions, with the hope that their customers won’t notice.
You should be aware of these three signs of a bad auto loan. Always go through the terms and conditions of the lender or dealership, to ensure you are getting the best deal!