Used Car Loan Interest Rates

Factors That Affect Used Car Loan Interest Rates

There are a number of factors that can influence the interest rate on a used car loan. The most important ones include the value of the vehicle, your credit score, the loan amount, and the loan repayment term. 

Loan Amount

Interest rates are directly proportional to the amount of the loan. That is why it is important to understand how much you can afford to borrow before you go out and start looking for a used car. 

Loan Term

When it comes to used car loans, the loan repayment term can also have an impact on the interest rate. The longer the loan term, the more interest you will be paying, so it is important to make sure you are looking at the best loan repayment term for your budget. 

Credit Score

Your credit score is also an important factor to consider when it comes to used car loans. A high credit score can help you get a better interest rate, so if you are planning on purchasing a used car, start beefing up your credit as early as possible.

Car Value

If you are looking to buy a high-end vehicle, be prepared to pay a premium. The higher the car value, the higher the interest rate you will be paying. 

What is the Ideal Used Car Loan Interest Rate?

Used cars are a great alternative if you’re in a tight spot financially. Interest rates on used cars are usually higher compared to buying a new car, but that doesn’t mean you can’t find a great deal on a used car. Generally speaking, used car interest rates in Canada range between 6% to 8%, but if you are going to look hard enough, you can find deals for as low as 4%. 

Companies that Offer Used Car Loans with Acceptable Interest Rates in Canada

Here are some companies that offer used car loans with acceptable interest rates in Canada:

Autorama

Autorama is one of the largest used car dealerships in Toronto, Canada. The company offers used car loans of up to $30,000 with a repayment term between 12 months to 96 months. Their interest rate for a used car loan starts at 4.99%.

Car Door

Car Door is an online car buying and selling company that offers used car loans between $8,500 to $110,000. Their interest rates start at 5.9% with a loan maturity date of up to 72 months. 

Birchwood

Birchwood is Winnipeg’s largest dealer of new and used cars. They offer used auto loans for as low as $5,000 up to $50,000 with an interest rate ranging from 5.27% to 18.27%. Their loan repayment term is between 12 months to 96 months.

Conclusion

When you are looking to purchase a used car, you need to make sure you have a solid understanding of how the used car market works. If you are not careful, you could end up paying more for a used car than you should. Make sure you take the time to do your research to find the best used car loan interest rate.