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Do Not Make these Car Loan Mistakes

Getting a car is exciting, as you finally have personal transport, allowing you to move around the city with comfort and convenience. If you are like most of the Canadians, the only way you can purchase a vehicle is by taking a car loan. As this is an important financial decision, you want to make sure that you make zero mistakes while taking one. Here are three mistakes you should avoid at all costs:

Forgetting to go through the fine print

When you approach a credit union or dealership, they will have a salesperson talk to you about the car loan. The salesperson may rush you to sign the documents so that they can start working on your loan application immediately. However, you should always go through the fine print, to know the details of the loan. For instance, they will include information about processing fees, length of the auto loan, interest rate, and other factors that affect how much you have to pay. If you find any mistakes, bring it to their attention, before signing the documents.

Opting for add-ons

When talking to the salesperson about the car loan, he/she will talk about add-ons, which seem like great value for money. For instance, extended warranties may sound like a great deal, as they only increase the monthly payments by a small amount. However, when you look at the bigger picture, you will notice that the amount you have to pay in the long run is huge. For example, you get an extended warranty for your car, for a small price of $30 a month. If you take the loan for five years, it will cost you $1,800.

Revealing how much you are willing to pay

It is quite common for dealerships and credit unions to ask how much you are willing to pay every month for the car loan. While you should be aware of this figure, you shouldn’t reveal it to the salesperson. If you do, the salesperson can use this information against you. For instance, if your figure is low, the salesperson will suggest a car loan, which goes beyond five years. As a result, you will end up paying a lot more than the actual value of the car.

These are the three mistakes you should not make when taking a car loan. If you want to take a car loan from a lender who adjusts the monthly payment to ensure it is never a strain on your budget, contact TakeTheDrive today!


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