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Why Canada’s used-car world is becoming a buyer’s market

TORONTO — The balance of power in the used car market is shifting towards shoppers as improved data and online offerings create more opportunities to push for the best price.

A fast-evolving online marketplace is providing more intelligence on the fair value of cars, said Cliff Banks, a Detroit-based auto retail expert.

“I don’t know that it can be any more transparent…they all provide intelligence on the pricing and the deal of the vehicle, whether it’s a good deal, a fair deal.”

Kijiji Canada recently announced it will add a standalone auto sales site that will roll out later this year to keep up with shifting expectations. The site will add reviews of dealers as well as market pricing information from Carproof.

“The key feature for us, and one of the biggest, the biggest win for us is what’s called price transparency or price analysis,” said Matt McKenzie, general manager at Kijiji Canada.

The online classified company, owned by eBay, already boasts of being the largest player in the Canadian market with about 500,000 vehicle listings. Autotrader, owned by Etobicoke-based Trader Corp., lists about 444,000 vehicles on its site while there are many other offerings on the market as well.

Listing companies are boosting their online presence as the used vehicle market is set for significant growth, said Dennis DesRosiers, president of DesRosiers Automotive Consultants.

“There’s tremendous opportunity, and that brings in all the different retail players and their approach of, how do I get a piece of that?”

While new vehicle sales are expected to be largely flat at about two million this year, the used vehicle market is set to add half a million more in sales in the next three to five years, on top of the three million that changed hands last year, said DesRosiers.

The rise in the used vehicle market comes as improved quality in the past decade means cars and trucks are lasting much longer, allowing for a potential lifespan of four to six owners from the two or three expected not long ago.

“It takes 23 years to remove the vehicles from the road now, a decade ago it only took about 12, so it’s essentially doubled,” said DesRosiers.

Used vehicles also offer margins that are two to three times higher than for new cars, adding to their appeal, he said.

The quality and information improvements have significantly changed the overall used retail market, said DesRosiers.

“It’s not that far long ago, call it 15 years ago or maybe 10 years ago, where the used car market was largely a culture of deceit…even if the online capacity was there, there was just so much riffraff in the used car market that it was very dangerous. A lot of that has changed.”

The improved access to data means used-car retailers have to be more transparent and competitive about their pricing, said Jamie Tekela, director of pre-owned operations at Pfaff Automotive Partners.

“You need to really justify what you’re asking, why you’re asking it, and you can’t go asking $500 more for the same Honda Civic with the same mileage. It just it doesn’t work any more.”

“It’s night and day, to be perfectly honest. It’s gotten a lot more customer friendly,” he said.

The improved information on crash reports, comparable sales, and other metrics hasn’t done away with potential negotiations but does give more justification, said Jamie.

“There’s always going to be negotiations when trying to buy and sell vehicles, but with so much information available to each and every one of us, it’s a lot easier to explain our rhyme and reason why we’re asking what for a car.”

Buying a Used Car: How to Choose a Payment Option

When the time comes to buy a used car, there are many financial factors to consider. Perhaps your budget will narrow your used car choices, or you may not be aware of the payment options available. We are ready to show you some ways you can pay for your vehicle and to show you that the make and model you desire most may well be within your reach if you plan carefully.

Consider the Time Frame

As you consider payment options, one of the first factors you might want to think about is how long you will be paying for your car. Whether you secure a loan through the bank or choose in-house financing with us and depending on your credit, your loan could be as brief as two or three years or as long as five. It is important to understand the exact terms of the length of your loan before you sign off on a vehicle.

Give Yourself Time

Even if you find yourself needing a new vehicle for your commute to work or school, you should avoid jumping into a deal right away. Take the time to consider your options, as this may help you avoid hefty payments that might be hard to handle later on. For example, ask yourself whether your current car is a valid trade in or if you can secure a down payment that may help lower the cost of a vehicle.

Review Your Budget

One mistake many people make when they shop for used cars is to miscalculate how much they can afford to pay monthly. To avoid this error, you will need to factor more than just the car payment into your auto ownership budget. The cost of insurance, gas and other taxes and fees that will need to be paid when you purchase a vehicle should all be included in your budget to ensure you do not overextend it.

Buying a used car can be a challenge, especially if you are unsure of your payment options. However, being prepared and asking the right questions can help you get the car you want at an affordable payment.

Advice and Negotiation Tips for Shopping Used Cars

Buying a vehicle is never easy, but buying a used vehicle is downright difficult. You will get your hopes up numerous times by an ad that seems too good to be true, only to be let down when, in fact, it was too good to be true. Someone might advertise their car as “Like new! Mild wear and tear! Runs great!” when in actuality, it is very much old, has extensive wear and tear and doesn’t run at all. Yes, it happens. That is why, when shopping for used cars, you should know where to turn and how to negotiate. Don’t fall for a scam and bring home a lemon, and use the following advice to help ease the pain of your search:

Go to a Dealer

Sure, you know someone who found a great deal on Kijiji, or are even friends with that lucky person who bought a car on Ebay ten years ago and it’s still running great today. However, those people are the exceptions to the rule that states that you should never, ever shop for used cars online. Not only is it impossible to tell the true condition of a vehicle without actually seeing it, but also, you’re risking spending thousands of dollars a car that may take a dump on you ten minutes after purchasing it. Then, because there is no warranty, you’re stuck with an old car that doesn’t run and no money to fix it.

Find the Car You Want

Before you head to the dealership, know what you’re looking for. If you head to the dealership without a clue, you may end up purchasing a vehicle that is over your budget and all wrong for your needs. Identify the traits you need in a new used car: good gas mileage, three rows, ample storage space, etc. Once you do this, set a budget and head to the dealer.

Negotiate Like a Pro

Negotiating for a fair price might be the most daunting part of the car buying process, but it’s necessary. Dealerships expect you to negotiate and price their cars accordingly. Use all the knowledge you have regarding the vehicle to bring the price down.

Use the tips above when shopping for used cars to get the best your money can buy.

Tips for Buying Your Teenager a Used Car

When your teenager reaches driving age and wants a car, you will probably have many decisions to make. Not only will you have to compromise with your teen when it comes to what you will pay for and what make and model is acceptable, you will also have to consider which used cars are the safest for him or her to drive. If you’re ready to buy your teen a car, we’re here to help with a few tips that might make the processes easier.

Think Simplicity

While your teenager probably has a make and model already in mind, you may want to make some boundaries clear before you start browsing used cars together. Not only will price be a factor, but it can be expensive to insure teen drivers as well. Their age and inexperience make them a considerable liability to many insurance companies, so choosing a no-frills vehicle may help you save money.

Do Your Homework

While we can help you choose a safe used car for your teen, it might also help if you perform some research on your own before you visit our lot. Take the time to discover which used cars have the best safety ratings, which ones have additional safety equipment that might keep your child safer and which are the least expensive to operate. The more you know before you begin to look at individual cars, the easier it might be to arrive at a decision.

Prepare Your Teen for Test Drives

Even if you will be doing much of the legwork and putting up the cash for your teen’s car, you may still want to prepare him or her for what will be involved with test driving vehicles. Teach them what to look and listen for and help them prepare a list of questions to ask our sales associate for during and after a test drive.

Buying your teenager his or her first used car doesn’t have to be a headache. Compromise, research and careful planning can all ensure a more enjoyable buying experience for you both.

Using a Car Dealership to Qualify for Low Interest Car Loans

Poor Credit Car Loans

Receiving a loan with poor credit history involves a few more steps, but is well within the range of possibility. If you are able to show documentation of a stable income and a positive debt to income ratio, you will have gone far in negating your bad credit score. Other methods to consider are using a co-signer, and paying a larger than average down payment.

Qualifying for, and making timely payments on a poor credit car loan is one of the fastest ways to begin to rebuild your credit. Even if your initial interest rate is higher than ideal, after at least a year of on time payments, your credit may have stabilized enough to apply for refinancing. Contact your loan provider right away if you know you will not be able to make your full monthly payment. Most creditors will be willing to work with you to negotiate a revised payment schedule. It is important to be proactive to make sure your auto loan has a beneficial effect on your credit score.

Good Credit Car Loans

With a high enough credit score, you may not have to show proof of income at all. Whether you finance your car through your bank or directly through your car dealership, you will likely qualify for very low interest rates right away.

This will also give you more flexibility in the types of loans you will qualify for. Most low credit applicants will be restricted to secured car loans, and will use the car in purchase as collateral. While this is certainly an option for you, you will also qualify for a range of unsecured loans which may be quicker to approve and are not required to be backed by collateral.

Working With a Dealership

Regardless of your credit, dealerships will often have a better understanding of what documentation you need and how to best display your situation to outside creditors achieve the best rates. They work with customers from every end of the financial spectrum on a daily basis, and will know what steps you need to take to most efficiently use resources to procure a poor credit loan, or how to best maximize the benefits of an already excellent credit score.

The Importance of Credit for Car Loans

There’s a lot of discussion about credit scores on TV, with friends and with lenders. Why is good credit so important? Your credit score can potentially help or hurt you, as it provides a general snapshot of your financial wellbeing. When applying for car loans, some of your financial capability is determined from your credit score.

Borrowing Ability

Your credit score can determine how much money you’re able to borrow. A good credit score can be important when looking to finance the exact vehicle model you want. If your credit is poor, though, don’t panic right away. You may still be approved for financing, but it’s possible you’ll be approved at a higher interest rate than someone with excellent credit.

Interest Rate

When you borrow money for a car, the money you borrowed is paid back in installments with accrued interest. The interest rate you’re given depends on a variety of factors, and your credit score may be one of those factors. It’s often desirable to get the lowest interest rate possible, for it can save you money in the long run.

Financial Reliability

Your credit can sometimes be considered your general picture of financial reliability. Credit is one way that lenders determine if they can trust you to pay back your debts in a timely matter. When applying for a car loan, your current credit score can provide a picture of your overall financial reliability. Someone who consistently pays back borrowed money on time is considered less of a risk than someone who has numerous outstanding payments or a high debt-to-income ratio.

Credit is an important aspect of the car loan process. Your credit can determine how much you are qualified to borrow and the interest rate you’re given. It also can provide the requestor with a snapshot of your financial reliability.

Splurge on a Used Car

We know that when you buy a used car you are making a wise financial decision. Not only do you save money on the purchase price and avoid the lion’s share of depreciation costs, you also save on taxes, registration and insurance expenses. What to do with all of the extra money that buying used cars gets you? We believe that it makes sense to splurge on some extras.

 

Buying used, it is entirely possible that you can afford a car that has just a few thousand miles on it. You will still be getting a good deal, but you will also receive a vehicle that has many good years left in it. You will not have to worry too much about maintenance costs, as your used vehicle should go tens of thousands of miles before any non-routine maintenance is needed. Plus, our mechanics will have checked the car over to make sure it is in tip-top shape.

 

Another option is to splurge on a car that has the amenities you really desire. This could be a more powerful engine, a plush interior or extras such as an advanced entertainment system. Instead of buying a small sedan you may be able to afford a roomier SUV crossover or a cool-looking truck where you sit high in the cabin. You could get a car that will impress your friends and family. By getting a car that you really love, you will likely keep the car longer, resulting in more savings for you.

 

Whatever you buy, rest assured that our customer service department will help you each step of the way. We will assist you in getting a great deal on financing, if needed, and we can maintain your vehicle for many years. We have a full-service maintenance department that handles everything from oil changes to major engine work. Used cars are a great way to get more car for your dollar.

The Right Way To Shop for Bad Credit Car Loans

If you’re in need of a new vehicle but don’t have the credit to buy one, you may be enticed by those signs that advertise loans for people with bad credit. Don’t be so easily fooled. Dealerships that deal strictly in bad credit car loans typically make their money on defaults, which occur often because of the impossible rates and terms. That said, you still have options. If you want to get a car loan on bad credit, here’s what you need to do:

 

Save Up for a Down Payment

 

A bigger down payment means a smaller loan, and a smaller loan means more credible options. Many lenders are more willing to lend to people with so-so credit if the loan is not for much. Furthermore, by showing up with a larger down payment, you show the dealer that you’re responsible and capable of managing your money to some extent.

 

Get Preapproved

 

Several credit agencies preapprove consumers via a simple online application. Preapproval is fairly easy to obtain through these agencies but can go a long way toward boosting your credibility. Even if a dealer doesn’t accept the preapproval offer, it can give you an idea of what rates to expect and therefore, put you in a better bargaining. Position.

 

Boost Your Credit

 

If you are in the “thinking about buying a car” stage, take time to boost your credit. Pay off old debts, don’t rack up new debt and dispute credit errors. The cleaner your credit record when it comes time to shop, the easier it will be for you to obtain a car loan.

 

Avoid Additional Bad Credit Items

 

Don’t forego your rent one month and your phone bill the next in order to save up a bigger down payment. Any additional bad items on an already bad credit report can severely hurt your chances of getting a good loan from a reputable lender.

 

Bad credit car loans are out, but you just have to know how to shop for them. Be smart in the way you shop to find a loan that is right for you.

Get a Loan, Get a Car, Get Going

Car loans are a wonderful way to buy a car or truck that is worth more money than you have in your bank account at the time of purchase. These allow one to build credit while driving a vehicle that would otherwise be financially out of reach. At our dealership we sell more cars to customers utilizing auto loans than we do otherwise. It is rare these days to find a customer that is willing to pay in full up front for a car or truck, and for this reason we have a top-notch lending team to help even those with the worst of credit scores drive away happy.

 

To achieve the best rates on a loan for an automobile one should come to the dealership with a high credit score. This, bar none, is the most important aspect that lenders consider when deciding whether to approve a borrower for an auto loan. Second to the credit score, lenders are looking for a decent amount of cash to be put down towards the cost of the vehicle up front. In the event of bad credit one must provide a cosigner or come up with another creative way to appeal to the lender.

 

Whether your credit is a shining reflection of your awesome spending, debtor, and financial habits, or it is a mar on your record indicative of a reckless spender, our dealership can work with you. We want nothing more than to provide you with the optimum vehicle for your needs. We will bend over backwards to help you, whatever your situation, into one of our vehicles. Our premier staff of salesmen and lenders will make you feel right at home at our dealership. We can accommodate the pickiest of buyers and the worst of credit scores. Help us help you hit the open road in a new-to-you vehicle that will turn heads across Canada.

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 some cases, our dealership may be 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. Expand your search to include lenders who work with individuals who have poor credit but be leery of those who only work with such individuals as that can be a sign of predatory practices.

 

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.

 

The 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.