Car Deal Canada

Prince Edward Island Car Loans

PEI Car Loans

Getting approved for car financing in Prince Edward Island is straightforward when you understand the process and prepare in advance. This guide will provide tips and advice to help you get the best auto loan rates and terms in PEI.

The key is doing your research, having a good credit score, getting pre-approved, and negotiating the best deal. We’ll walk through everything you need to know step-by-step. Follow this advice, and you’ll be driving off the lot with affordable monthly payments in no time.

Get Pre-Qualified in Under 60 Seconds

All Credit Approved and 0 Money Down Options Available

 

Current Auto Loan Interest Rates in PEI

In PEI, current auto loan interest rates range from about 4.5% to over 20%, with the rate depending heavily on your credit score. The average rate in Q3 2023 for new cars was 7.03% and for used cars was 11.35% nationally. This gives a good benchmark, though actual rates in PEI may vary.

In general, interest rates are lower when you get pre-approved financing from a bank or credit union before visiting the dealership. Rates tend to be higher when you finance through the dealership. For buyers with excellent credit (scores above 750), current rates through banks and credit unions in PEI tend to range from about 4.5% to 7%. Those with fair credit (scores in the 600s) will see much higher rates from 8% to 15% or more.

It’s recommended to check both bank and dealership rates to find the best terms. Provide the same information to each and compare. Negotiating can also help lower the interest rate. Those with very good credit have more leverage to negotiate a lower rate.

 

Loan Terms

The most common auto loan terms in PEI are 24, 36, 48, 60, 72, 84 and 96 months according to industry data. The average loan term is 72 months or 6 years. However, loans can range from as short as 12 months to as long as 96 months or 8 years.

Shorter loan terms of 24-36 months generally require higher monthly payments but save on interest costs overall. Longer terms of 72-96 months have lower monthly payments but accrue more interest over the life of the loan.

The down payment amount also affects the loan term length. Most lenders require 10-20% down for shorter 24-36 month loans. For longer terms, some lenders may approve loans with little to no down payment. However, larger down payments lower the amount financed and interest paid.

 

What Credit Score is Needed?

To get approved for the best auto loan rates in PEI, you’ll generally need a credit score of at least 650-700. Lenders view borrowers with scores in this range and higher as low risk, making them eligible for prime lending rates.

Borrowers with credit scores of 650 and above have a good chance of securing a competitive interest rate on their auto loan. However, those with scores below 620 will have a much harder time getting approved without a cosigner or a larger down payment.

Before applying for any auto financing, it’s a good idea to check your credit report from both Equifax and TransUnion. This will allow you to understand your current credit score and if any negative items need to be addressed. There are many online tools that provide free credit reports and scores.

If your score is on the lower end, taking steps to improve it in the 90-180 days before applying for a car loan can significantly boost your chances of getting approved at a good rate. Common tips include paying down balances, disputing errors, and not applying for new credit.

 

Checking Your Credit

It’s important to check your credit report from both Equifax and TransUnion before applying for an auto loan. This allows you to understand exactly where your credit stands, and to correct any errors that may be negatively impacting your score. Here’s how to get free copies of your credit reports:

– You are entitled to one free copy of your credit report from each bureau per year. You can request them online from Equifax and TransUnion’s websites.

– When signing up for your reports, you’ll need to provide your SIN, current and previous addresses, and answer some security questions to verify your identity.

– Once you access your reports, scour them for any errors. This includes incorrect account information, duplicate accounts, and any late payments or collections that aren’t yours.

– If you find mistakes, contact the bureaus right away to file a dispute. Provide documentation like bank statements and invoices to back up your claims.

– Getting errors removed can quickly boost your credit score. Don’t apply for a car loan until everything is accurate.

– You can also use free tools like Borrowell and Credit Karma to monitor your credit regularly. But double-check their accuracy with your official reports.

– With your reports in good order, you’ll put yourself in the best position to get approved for the lowest rates.

 

Improving Credit

If your credit score is below what most lenders want to see, don’t worry – there are ways to improve it quickly. Here are some tips to raise your credit score fast:

Pay down balances on any credit cards, especially those close to the credit limit. This can boost your score in as little as a month or two.

Become an authorized user on someone else’s credit card. As long as they have good credit, this can give your score an immediate boost. Just make sure they make on-time payments.

Check your credit report for any errors dragging down your score incorrectly. Dispute these with the credit bureaus to potentially see a quick improvement.

Pay off any collections accounts if possible. Even settling for less than the full amount can help. Get any agreements in writing first.

Limit credit applications until after your car loan, since too many hard inquiries can lower your score temporarily.

 

Pre-Approval – Why It Matters

Getting pre-approved for an auto loan before visiting dealerships in PEI has some key benefits:

  • You’ll know your budget and max monthly payment upfront, saving time negotiating.
  • Dealers will take you more seriously as an approved buyer.
  • You can shop for the best interest rate from lenders.
  • There’s no obligation to purchase once pre-approved.

 

The most common places to apply for pre-approval in PEI are:

  • Your bank or credit union – many have online applications.
  • Lenders like Car Deal Canada offer online pre-approvals.
  • Going directly to the dealership’s finance department.

 

Have your personal details, income docs, and down payment amount ready when applying. Pre-approval can take anywhere from instant to 2-3 days depending on where you apply.

 

Required Documents

When applying for auto financing, you’ll need to provide documentation to verify your income, down payment funds, and other qualifications. Here are some of the key documents lenders typically require:

Proof of Income

Lenders will want to see evidence that you have a steady source of income to repay the loan. Acceptable documents include recent pay stubs, bank statements showing direct deposit history, an employment letter verifying your position and salary, or tax returns if you are self-employed.

Down Payment

You’ll need to show proof that you have the cash available for your down payment amount. This could include recent bank statements, documentation of funds from the sale of another asset like a house, or a gift letter if you are using money gifted from a family member.

Make sure your bank statements align with the down payment amount you state on your application. Lenders may ask for an accounting trail showing where the funds originated.

 

Down Payments

When financing a vehicle purchase in PEI, the minimum down payment is usually around 5-10% of the purchase price.

Most lenders will approve loans with a minimum of 5% down payment. However, a down payment of at least 10% is recommended to get better rates and terms.

While the minimum is fairly low, putting down a larger down payment like 20% can have advantages:

 

  • Allows you to qualify for lower interest rates
  • Reduces the amount financed resulting in lower monthly payments
  • Builds more equity upfront

 

20% is considered an ideal down payment amount for most car purchases. But any amount over 10% will improve your financing terms.

If you don’t have sufficient cash savings, consider using the equity you have in a trade-in as part of your down payment. Most lenders will let you combine a down payment with trade-in value.

 

Trade-In Equity

If you currently have an auto loan on your trade-in vehicle, you may be able to use the equity you’ve built up towards a new car purchase. When you trade-in a financed vehicle, the trade-in value gets applied as a credit against the remaining loan balance first. Any positive equity then gets transferred over to your new auto loan.

For example, if you owe $10,000 on your current car loan but your vehicle’s trade-in value is $12,000, you have $2,000 in positive equity. This $2,000 can be used to lower the amount you need to finance for the new vehicle. Essentially, your equity reduces the net cost of the new car purchase.

Just keep in mind that rolling over negative equity from your old loan to a new loan means you’ll be financing a higher balance. This will increase the total interest paid over the life of the new loan. Carefully consider whether it makes sense to trade-in versus paying off your current loan first if you have negative equity.

Use an auto loan calculator to estimate payments based on different trade-in equity scenarios. Be sure to negotiate the best possible trade-in value to maximize your existing vehicle equity.

 

Negotiation Tips for Getting the Best Deal

When it comes to getting approved for an auto loan in PEI, negotiating the best deal involves strategies for both the vehicle price and the loan terms. Here are some tips to help you negotiate like a pro:

Research the vehicle’s fair market value using resources like Kelley Blue Book and Edmunds. This gives you a baseline for negotiations. Come prepared with printouts of similar vehicles for sale in your area to support your position.

Get pre-approved financing before visiting dealerships so you know your budget and terms. Don’t reveal the details too early or the dealer may not negotiate as aggressively on financing.

Negotiate the vehicle price first, before discussing financing terms. Be willing to walk away if you can’t get close to fair market value. There are always other vehicles and dealers.

Once you’ve agreed on a sale price, negotiate the interest rate, loan length, down payment, and any fees. Dealers often have more flexibility to adjust these terms to close the deal.

Consider having your bank or credit union compete with the dealer’s financing offer. This gives you extra leverage to negotiate the best possible rate and terms.

If you have a trade-in, negotiate its value separately after settling on the new car’s price. The trade difference can help with your down payment.

Never feel pressured into accepting an offer. Politely standing firm on your position keeps negotiations progressing in your favour.

 

Available Incentives and Rebates

There are some great incentives available for purchasing a new car in PEI.

The provincial government offers rebates for electric and hybrid vehicles through the Electric Vehicle Incentive program. Fully electric vehicles are eligible for up to $10,750 off the purchase price. Plug-in hybrids can qualify for rebates up to $5,000.

Many car manufacturers also offer customer cash incentives or discounted financing rates to move inventory. Your dealership can provide details on any current offers for the models you’re interested in.

Dealerships sometimes run special financing promotions as well, like reduced interest rates or no payments for several months. Check with your local dealers to see if they have any incentives on financing offers right now.

The key is negotiating – don’t be shy about asking for both the manufacturer and dealership incentives. With some persistence, you can get a great deal on a new car purchase with the PEI incentives available.

 

Choosing the Right Lender

When it comes to choosing an auto loan lender in PEI, you have several options to consider including banks, credit unions, and dealership financing. It’s important to compare all of your options side-by-side to find the best rates, terms, and overall value.

Banks such as CIBC, RBC, Scotiabank, and TD Canada Trust offer competitive interest rates and flexible loan terms. Many have online pre-approval tools to get the process started. Compare options across the major banks as rates can vary.

Local credit unions like Atlantic Credit Unions and East Coast Credit Union also provide auto financing with competitive rates. Credit unions are member-owned co-ops, so they may offer more personalized service.

Finally, you can finance through the dealership itself. This may come with manufacturer incentives not available elsewhere. Just be wary of dealers trying to upsell extras like extended warranties. Get quotes from other lenders for comparison first.

The most important thing is to get multiple quotes and compare all options side-by-side before committing. This ensures you get the best interest rate and loan terms for your situation.

 

Getting Quotes from Multiple Lenders

One of the best ways to ensure you get the lowest interest rate and best overall deal is to shop around and get quotes from multiple lenders. Don’t just go with the first offer you receive – take the time to compare options. Here are some tips:

Get quotes from at least 3 sources: your bank or credit union, the dealership financing department, and an online auto lender like Car Deal Canada. More quotes means more chances for the best rate.

To get an accurate quote you’ll need to provide details on the vehicle and your credit score. Have this info handy when requesting rates.

Compare the quotes side-by-side – focus on the APR, interest rate, fees, loan term, down payment required, and monthly payments. Look for the total cost of the loan over its lifetime.

Negotiate with lenders to try and beat competing offers. Having multiple options gives you leverage.

Read all fine print carefully before committing to an offer. Make sure you understand any conditions, fees, or changes to the deal.

Being a smart shopper when financing can save you thousands over the loan term. The lowest rate offer isn’t always from the first place you look!

 

Summary

Getting approved for an auto loan in Prince Edward Island can be straightforward if you follow the steps outlined in this guide. Here are the key takeaways:

 

  • Check your credit score ahead of time and take steps to improve it if needed. Lenders generally look for scores above 650.
  • Get pre-approved before visiting dealerships so you know what terms you qualify for.
  • Have all required documents ready to make the application process easy.
  • Make a reasonable down payment if possible to get better rates. Trade-in value also counts.
  • Negotiate the final price, interest rate, fees and any extras like warranties.
  • Compare multiple lenders to find the best loan terms and incentives.
  • Consider both dealership financing and bank/credit union loans.

 

Follow these tips and you’ll be driving off the lot with confidence. Our next steps will show you how to start the pre-approval process.

 

Next Steps

Now that you understand the auto financing process in PEI, it’s time to put this knowledge into action. Here are the key next steps to take for your car shopping:

 

Get Pre-Approved

Submit a financing application to lock in an interest rate and loan terms. Having a pre-approval letter gives you negotiating power at the dealership.

 

Research Incentives

Look into available rebates and incentives on your desired models. Consider timing your purchase around promotional financing offers.

 

Shop Around

Visit dealerships and get price quotes on the specific vehicle you want. Negotiate from the dealer invoice price, not MSRP. Get quotes from multiple dealers.

 

Compare Loan Offers

Once you have a purchase agreement, compare the dealer financing terms to loans from banks/CUs. Go with the most competitive rates and fees.

 

Review Paperwork

Carefully check the sales contract and loan agreement before signing. Make sure the terms match what you negotiated.

 

Enjoy Your New Ride!

You did your homework and got a great deal. Now put the top down and enjoy your new set of wheels with peace of mind.

Questions About Car Loans in PEI?

All major locations across Prince Edward Island, including Charlottetown, Summerside, Stratford, Cornwall, Montague, Kensington, Souris, Alberton, Georgetown, and Tignish.

To qualify for the best auto loan rates in PEI, you’ll generally need a credit score of at least 650-700. Lenders view borrowers with scores in this range and higher as low risk, making them eligible for prime lending terms. Those with scores below 620 will have a much harder time getting approved without a cosigner or larger down payment. It’s recommended to check your credit reports from Equifax and TransUnion before applying so you understand where your credit currently stands. Take steps to improve your score if needed in the 90-180 days before applying.

The average interest rate on new car loans nationally was 7.03% and for used cars was 11.35% in Q3 2023. Rates in PEI specifically may vary slightly. Those with excellent credit scores above 750 can qualify for rates from 4.5% to 7% currently through banks/CUs in PEI. Buyers with fair credit in the 600s will see much higher rates from 8% to 15% or more when financing through dealers.

Getting pre-approved before visiting dealers has many benefits: you’ll know your max budget and monthly payment, dealers will take you more seriously as an approved buyer, you can shop lenders for the best rates, and there’s no obligation to purchase once pre-approved. Apply with your bank, credit union, or an online lender like Capital Honda which offers pre-approvals.

You’ll need to provide proof of income like recent pay stubs or bank statements showing deposit history. Have documentation of your down payment funds available, like bank statements. You may need utility bills or other statements as proof of residency. Make sure all details match on your application documents.

Most lenders will approve a car loan with a minimum down payment of 5-10% of the vehicle’s purchase price. While 5% may be approved, a down payment of 10-20% or more is recommended to get the best interest rates and loan terms. The higher your down payment, the lower your amount financed will be.

Yes, the equity you have in a trade-in vehicle can be applied towards the down payment on your new car loan. Any positive equity above what you still owe will be applied as a credit against the new loan amount. Using a trade-in for your down payment can help reduce the amount you need to finance. Just be wary of rolling over negative equity.

Common car loan terms in PEI range from 24-96 months. 24-36 month loans have higher payments but less interest. Longer terms of 72-96 months have lower payments but accrue more interest overall. The average loan length is around 72 months. Your qualified loan term depends on factors like your credit score and down payment amount.

Come prepared with vehicle research so you know fair value. Get pre-approved financing first. Negotiate the vehicle price separately before financing terms. Be willing to walk away if needed. Compare rates from the dealer, bank, and credit unions. Use competing offers as leverage when negotiating with each lender. Don’t feel pressured – politely stand firm.

PEI offers rebates up to $10,750 off electric vehicles and up to $5,000 off plug-in hybrids. Car manufacturers frequently offer customer cash incentives or discounted financing rates as well. Ask your dealer about any special financing offers they may have. The key is negotiating to bundle all available incentives.

Banks and credit unions often offer very competitive auto loan rates and flexible terms. Having their pre-approval gives you leverage to negotiate with the dealer financing. Many major banks like CIBC, RBC, and Scotiabank offer online applications for added convenience. Compare options across banks and local credit unions.

To get an accurate auto loan quote, you’ll need to provide the vehicle details (year, make, model), the sale price, your credit score range, desired loan length, and down payment amount. Also have your monthly gross income amount handy. With these details, lenders can provide quotes for your specific situation.

Getting quotes from several sources ensures you find the best possible rate and loan terms. Rates can vary significantly between banks, credit unions, and dealers. Even small differences in APR or interest rates can equal thousands in savings over the loan term. More quotes means more chances to find the lowest rate.

Compare interest rates, fees, loan lengths, and monthly payments across multiple lenders. Look at the total cost over the lifetime of the loan. Read reviews of the lender’s customer service. Local credit unions often provide great rates and member perks. But don’t rule out national banks either. Shop around for the optimal combination of competitive rate and great service.

Pay down credit card balances below 30% of the limit, dispute any errors on your credit reports, limit hard inquiries by not applying for new credit, become an authorized user on someone else’s credit card if possible, and pay off any collections accounts if you can. Improving your score even 50 points before applying can mean better loan approval chances.

Pre-approval can take anywhere from instant to 2-3 days depending on where you apply. Online lenders like Car Deal Canada can pre-approve in minutes based on soft credit checks. Banks and credit unions typically take 1-3 days as they analyze your full credit report. Dealers may be able to pre-approve you on the spot if you provide all required documents.

Yes, having a pre-approval letter in hand before negotiating gives you important leverage. It shows the dealer you are a serious buyer who has already been approved up to a certain budget. Don’t reveal the pre-approval terms too quickly. Finalize the vehicle price first before financing discussion.

PEI offers rebates up to $10,750 for fully electric vehicles and up to $5,000 for plug-in hybrids. These substantial discounts are through the Electric Vehicle Incentive program. Make sure to apply for any provincial incentives you qualify for when purchasing an EV or hybrid.

Watch out for admin fees, documentation fees, or prep fees when reviewing your final loan contract. These can often be negotiated out or reduced. Avoid addons like extended warranties which increase cost. Read the fine print carefully and know what each fee is for before signing. Don’t hesitate to question any charges that seem unclear or unreasonable.

You can roll negative equity from your trade-in over into a new car loan, but this will increase the amount you must finance. The higher loan amount will lead to more interest paid over the life of the loan. Before trading in a car you owe more on, carefully consider if it makes sense versus paying down your current loan first.

 

 

Current Auto Loan Interest Rates in PEI

In PEI, current auto loan interest rates range from about 4.5% to over 20%, with the rate depending heavily on your credit score. The average rate in Q3 2023 for new cars was 7.03% and for used cars was 11.35% nationally. This gives a good benchmark, though actual rates in PEI may vary.

In general, interest rates are lower when you get pre-approved financing from a bank or credit union before visiting the dealership. Rates tend to be higher when you finance through the dealership. For buyers with excellent credit (scores above 750), current rates through banks and credit unions in PEI tend to range from about 4.5% to 7%. Those with fair credit (scores in the 600s) will see much higher rates from 8% to 15% or more.

It’s recommended to check both bank and dealership rates to find the best terms. Provide the same information to each and compare. Negotiating can also help lower the interest rate. Those with very good credit have more leverage to negotiate a lower rate.

 

Loan Terms

The most common auto loan terms in PEI are 24, 36, 48, 60, 72, 84 and 96 months according to industry data. The average loan term is 72 months or 6 years. However, loans can range from as short as 12 months to as long as 96 months or 8 years.

Shorter loan terms of 24-36 months generally require higher monthly payments but save on interest costs overall. Longer terms of 72-96 months have lower monthly payments but accrue more interest over the life of the loan.

The down payment amount also affects the loan term length. Most lenders require 10-20% down for shorter 24-36 month loans. For longer terms, some lenders may approve loans with little to no down payment. However, larger down payments lower the amount financed and interest paid.

 

What Credit Score is Needed?

To get approved for the best auto loan rates in PEI, you’ll generally need a credit score of at least 650-700. Lenders view borrowers with scores in this range and higher as low risk, making them eligible for prime lending rates.

Borrowers with credit scores of 650 and above have a good chance of securing a competitive interest rate on their auto loan. However, those with scores below 620 will have a much harder time getting approved without a cosigner or a larger down payment.

Before applying for any auto financing, it’s a good idea to check your credit report from both Equifax and TransUnion. This will allow you to understand your current credit score and if any negative items need to be addressed. There are many online tools that provide free credit reports and scores.

If your score is on the lower end, taking steps to improve it in the 90-180 days before applying for a car loan can significantly boost your chances of getting approved at a good rate. Common tips include paying down balances, disputing errors, and not applying for new credit.

 

Checking Your Credit

It’s important to check your credit report from both Equifax and TransUnion before applying for an auto loan. This allows you to understand exactly where your credit stands, and to correct any errors that may be negatively impacting your score. Here’s how to get free copies of your credit reports:

– You are entitled to one free copy of your credit report from each bureau per year. You can request them online from Equifax and TransUnion’s websites.

– When signing up for your reports, you’ll need to provide your SIN, current and previous addresses, and answer some security questions to verify your identity.

– Once you access your reports, scour them for any errors. This includes incorrect account information, duplicate accounts, and any late payments or collections that aren’t yours.

– If you find mistakes, contact the bureaus right away to file a dispute. Provide documentation like bank statements and invoices to back up your claims.

– Getting errors removed can quickly boost your credit score. Don’t apply for a car loan until everything is accurate.

– You can also use free tools like Borrowell and Credit Karma to monitor your credit regularly. But double-check their accuracy with your official reports.

– With your reports in good order, you’ll put yourself in the best position to get approved for the lowest rates.

 

Improving Credit

If your credit score is below what most lenders want to see, don’t worry – there are ways to improve it quickly. Here are some tips to raise your credit score fast:

Pay down balances on any credit cards, especially those close to the credit limit. This can boost your score in as little as a month or two.

Become an authorized user on someone else’s credit card. As long as they have good credit, this can give your score an immediate boost. Just make sure they make on-time payments.

Check your credit report for any errors dragging down your score incorrectly. Dispute these with the credit bureaus to potentially see a quick improvement.

Pay off any collections accounts if possible. Even settling for less than the full amount can help. Get any agreements in writing first.

Limit credit applications until after your car loan, since too many hard inquiries can lower your score temporarily.

 

Pre-Approval – Why It Matters

Getting pre-approved for an auto loan before visiting dealerships in PEI has some key benefits:

  • You’ll know your budget and max monthly payment upfront, saving time negotiating.
  • Dealers will take you more seriously as an approved buyer.
  • You can shop for the best interest rate from lenders.
  • There’s no obligation to purchase once pre-approved.

 

The most common places to apply for pre-approval in PEI are:

  • Your bank or credit union – many have online applications.
  • Lenders like Car Deal Canada offer online pre-approvals.
  • Going directly to the dealership’s finance department.

 

Have your personal details, income docs, and down payment amount ready when applying. Pre-approval can take anywhere from instant to 2-3 days depending on where you apply.

 

Required Documents

When applying for auto financing, you’ll need to provide documentation to verify your income, down payment funds, and other qualifications. Here are some of the key documents lenders typically require:

Proof of Income

Lenders will want to see evidence that you have a steady source of income to repay the loan. Acceptable documents include recent pay stubs, bank statements showing direct deposit history, an employment letter verifying your position and salary, or tax returns if you are self-employed.

Down Payment

You’ll need to show proof that you have the cash available for your down payment amount. This could include recent bank statements, documentation of funds from the sale of another asset like a house, or a gift letter if you are using money gifted from a family member.

Make sure your bank statements align with the down payment amount you state on your application. Lenders may ask for an accounting trail showing where the funds originated.

 

Down Payments

When financing a vehicle purchase in PEI, the minimum down payment is usually around 5-10% of the purchase price.

Most lenders will approve loans with a minimum of 5% down payment. However, a down payment of at least 10% is recommended to get better rates and terms.

While the minimum is fairly low, putting down a larger down payment like 20% can have advantages:

 

  • Allows you to qualify for lower interest rates
  • Reduces the amount financed resulting in lower monthly payments
  • Builds more equity upfront

 

20% is considered an ideal down payment amount for most car purchases. But any amount over 10% will improve your financing terms.

If you don’t have sufficient cash savings, consider using the equity you have in a trade-in as part of your down payment. Most lenders will let you combine a down payment with trade-in value.

 

Trade-In Equity

If you currently have an auto loan on your trade-in vehicle, you may be able to use the equity you’ve built up towards a new car purchase. When you trade-in a financed vehicle, the trade-in value gets applied as a credit against the remaining loan balance first. Any positive equity then gets transferred over to your new auto loan.

For example, if you owe $10,000 on your current car loan but your vehicle’s trade-in value is $12,000, you have $2,000 in positive equity. This $2,000 can be used to lower the amount you need to finance for the new vehicle. Essentially, your equity reduces the net cost of the new car purchase.

Just keep in mind that rolling over negative equity from your old loan to a new loan means you’ll be financing a higher balance. This will increase the total interest paid over the life of the new loan. Carefully consider whether it makes sense to trade-in versus paying off your current loan first if you have negative equity.

Use an auto loan calculator to estimate payments based on different trade-in equity scenarios. Be sure to negotiate the best possible trade-in value to maximize your existing vehicle equity.

 

Negotiation Tips for Getting the Best Deal

When it comes to getting approved for an auto loan in PEI, negotiating the best deal involves strategies for both the vehicle price and the loan terms. Here are some tips to help you negotiate like a pro:

Research the vehicle’s fair market value using resources like Kelley Blue Book and Edmunds. This gives you a baseline for negotiations. Come prepared with printouts of similar vehicles for sale in your area to support your position.

Get pre-approved financing before visiting dealerships so you know your budget and terms. Don’t reveal the details too early or the dealer may not negotiate as aggressively on financing.

Negotiate the vehicle price first, before discussing financing terms. Be willing to walk away if you can’t get close to fair market value. There are always other vehicles and dealers.

Once you’ve agreed on a sale price, negotiate the interest rate, loan length, down payment, and any fees. Dealers often have more flexibility to adjust these terms to close the deal.

Consider having your bank or credit union compete with the dealer’s financing offer. This gives you extra leverage to negotiate the best possible rate and terms.

If you have a trade-in, negotiate its value separately after settling on the new car’s price. The trade difference can help with your down payment.

Never feel pressured into accepting an offer. Politely standing firm on your position keeps negotiations progressing in your favour.

 

Available Incentives and Rebates

There are some great incentives available for purchasing a new car in PEI.

The provincial government offers rebates for electric and hybrid vehicles through the Electric Vehicle Incentive program. Fully electric vehicles are eligible for up to $10,750 off the purchase price. Plug-in hybrids can qualify for rebates up to $5,000.

Many car manufacturers also offer customer cash incentives or discounted financing rates to move inventory. Your dealership can provide details on any current offers for the models you’re interested in.

Dealerships sometimes run special financing promotions as well, like reduced interest rates or no payments for several months. Check with your local dealers to see if they have any incentives on financing offers right now.

The key is negotiating – don’t be shy about asking for both the manufacturer and dealership incentives. With some persistence, you can get a great deal on a new car purchase with the PEI incentives available.

 

Choosing the Right Lender

When it comes to choosing an auto loan lender in PEI, you have several options to consider including banks, credit unions, and dealership financing. It’s important to compare all of your options side-by-side to find the best rates, terms, and overall value.

Banks such as CIBC, RBC, Scotiabank, and TD Canada Trust offer competitive interest rates and flexible loan terms. Many have online pre-approval tools to get the process started. Compare options across the major banks as rates can vary.

Local credit unions like Atlantic Credit Unions and East Coast Credit Union also provide auto financing with competitive rates. Credit unions are member-owned co-ops, so they may offer more personalized service.

Finally, you can finance through the dealership itself. This may come with manufacturer incentives not available elsewhere. Just be wary of dealers trying to upsell extras like extended warranties. Get quotes from other lenders for comparison first.

The most important thing is to get multiple quotes and compare all options side-by-side before committing. This ensures you get the best interest rate and loan terms for your situation.

 

Getting Quotes from Multiple Lenders

One of the best ways to ensure you get the lowest interest rate and best overall deal is to shop around and get quotes from multiple lenders. Don’t just go with the first offer you receive – take the time to compare options. Here are some tips:

Get quotes from at least 3 sources: your bank or credit union, the dealership financing department, and an online auto lender like Car Deal Canada. More quotes means more chances for the best rate.

To get an accurate quote you’ll need to provide details on the vehicle and your credit score. Have this info handy when requesting rates.

Compare the quotes side-by-side – focus on the APR, interest rate, fees, loan term, down payment required, and monthly payments. Look for the total cost of the loan over its lifetime.

Negotiate with lenders to try and beat competing offers. Having multiple options gives you leverage.

Read all fine print carefully before committing to an offer. Make sure you understand any conditions, fees, or changes to the deal.

Being a smart shopper when financing can save you thousands over the loan term. The lowest rate offer isn’t always from the first place you look!

 

Summary

Getting approved for an auto loan in Prince Edward Island can be straightforward if you follow the steps outlined in this guide. Here are the key takeaways:

 

  • Check your credit score ahead of time and take steps to improve it if needed. Lenders generally look for scores above 650.
  • Get pre-approved before visiting dealerships so you know what terms you qualify for.
  • Have all required documents ready to make the application process easy.
  • Make a reasonable down payment if possible to get better rates. Trade-in value also counts.
  • Negotiate the final price, interest rate, fees and any extras like warranties.
  • Compare multiple lenders to find the best loan terms and incentives.
  • Consider both dealership financing and bank/credit union loans.

 

Follow these tips and you’ll be driving off the lot with confidence. Our next steps will show you how to start the pre-approval process.

 

Next Steps

Now that you understand the auto financing process in PEI, it’s time to put this knowledge into action. Here are the key next steps to take for your car shopping:

 

Get Pre-Approved

Submit a financing application to lock in an interest rate and loan terms. Having a pre-approval letter gives you negotiating power at the dealership.

 

Research Incentives

Look into available rebates and incentives on your desired models. Consider timing your purchase around promotional financing offers.

 

Shop Around

Visit dealerships and get price quotes on the specific vehicle you want. Negotiate from the dealer invoice price, not MSRP. Get quotes from multiple dealers.

 

Compare Loan Offers

Once you have a purchase agreement, compare the dealer financing terms to loans from banks/CUs. Go with the most competitive rates and fees.

 

Review Paperwork

Carefully check the sales contract and loan agreement before signing. Make sure the terms match what you negotiated.

 

Enjoy Your New Ride!

You did your homework and got a great deal. Now put the top down and enjoy your new set of wheels with peace of mind.

Questions About Car Loans in PEI?

All major locations across Prince Edward Island, including Charlottetown, Summerside, Stratford, Cornwall, Montague, Kensington, Souris, Alberton, Georgetown, and Tignish.

To qualify for the best auto loan rates in PEI, you’ll generally need a credit score of at least 650-700. Lenders view borrowers with scores in this range and higher as low risk, making them eligible for prime lending terms. Those with scores below 620 will have a much harder time getting approved without a cosigner or larger down payment. It’s recommended to check your credit reports from Equifax and TransUnion before applying so you understand where your credit currently stands. Take steps to improve your score if needed in the 90-180 days before applying.

The average interest rate on new car loans nationally was 7.03% and for used cars was 11.35% in Q3 2023. Rates in PEI specifically may vary slightly. Those with excellent credit scores above 750 can qualify for rates from 4.5% to 7% currently through banks/CUs in PEI. Buyers with fair credit in the 600s will see much higher rates from 8% to 15% or more when financing through dealers.

Getting pre-approved before visiting dealers has many benefits: you’ll know your max budget and monthly payment, dealers will take you more seriously as an approved buyer, you can shop lenders for the best rates, and there’s no obligation to purchase once pre-approved. Apply with your bank, credit union, or an online lender like Capital Honda which offers pre-approvals.

You’ll need to provide proof of income like recent pay stubs or bank statements showing deposit history. Have documentation of your down payment funds available, like bank statements. You may need utility bills or other statements as proof of residency. Make sure all details match on your application documents.

Most lenders will approve a car loan with a minimum down payment of 5-10% of the vehicle’s purchase price. While 5% may be approved, a down payment of 10-20% or more is recommended to get the best interest rates and loan terms. The higher your down payment, the lower your amount financed will be.

Yes, the equity you have in a trade-in vehicle can be applied towards the down payment on your new car loan. Any positive equity above what you still owe will be applied as a credit against the new loan amount. Using a trade-in for your down payment can help reduce the amount you need to finance. Just be wary of rolling over negative equity.

Common car loan terms in PEI range from 24-96 months. 24-36 month loans have higher payments but less interest. Longer terms of 72-96 months have lower payments but accrue more interest overall. The average loan length is around 72 months. Your qualified loan term depends on factors like your credit score and down payment amount.

Come prepared with vehicle research so you know fair value. Get pre-approved financing first. Negotiate the vehicle price separately before financing terms. Be willing to walk away if needed. Compare rates from the dealer, bank, and credit unions. Use competing offers as leverage when negotiating with each lender. Don’t feel pressured – politely stand firm.

PEI offers rebates up to $10,750 off electric vehicles and up to $5,000 off plug-in hybrids. Car manufacturers frequently offer customer cash incentives or discounted financing rates as well. Ask your dealer about any special financing offers they may have. The key is negotiating to bundle all available incentives.

Banks and credit unions often offer very competitive auto loan rates and flexible terms. Having their pre-approval gives you leverage to negotiate with the dealer financing. Many major banks like CIBC, RBC, and Scotiabank offer online applications for added convenience. Compare options across banks and local credit unions.

To get an accurate auto loan quote, you’ll need to provide the vehicle details (year, make, model), the sale price, your credit score range, desired loan length, and down payment amount. Also have your monthly gross income amount handy. With these details, lenders can provide quotes for your specific situation.

Getting quotes from several sources ensures you find the best possible rate and loan terms. Rates can vary significantly between banks, credit unions, and dealers. Even small differences in APR or interest rates can equal thousands in savings over the loan term. More quotes means more chances to find the lowest rate.

Compare interest rates, fees, loan lengths, and monthly payments across multiple lenders. Look at the total cost over the lifetime of the loan. Read reviews of the lender’s customer service. Local credit unions often provide great rates and member perks. But don’t rule out national banks either. Shop around for the optimal combination of competitive rate and great service.

Pay down credit card balances below 30% of the limit, dispute any errors on your credit reports, limit hard inquiries by not applying for new credit, become an authorized user on someone else’s credit card if possible, and pay off any collections accounts if you can. Improving your score even 50 points before applying can mean better loan approval chances.

Pre-approval can take anywhere from instant to 2-3 days depending on where you apply. Online lenders like Car Deal Canada can pre-approve in minutes based on soft credit checks. Banks and credit unions typically take 1-3 days as they analyze your full credit report. Dealers may be able to pre-approve you on the spot if you provide all required documents.

Yes, having a pre-approval letter in hand before negotiating gives you important leverage. It shows the dealer you are a serious buyer who has already been approved up to a certain budget. Don’t reveal the pre-approval terms too quickly. Finalize the vehicle price first before financing discussion.

PEI offers rebates up to $10,750 for fully electric vehicles and up to $5,000 for plug-in hybrids. These substantial discounts are through the Electric Vehicle Incentive program. Make sure to apply for any provincial incentives you qualify for when purchasing an EV or hybrid.

Watch out for admin fees, documentation fees, or prep fees when reviewing your final loan contract. These can often be negotiated out or reduced. Avoid addons like extended warranties which increase cost. Read the fine print carefully and know what each fee is for before signing. Don’t hesitate to question any charges that seem unclear or unreasonable.

You can roll negative equity from your trade-in over into a new car loan, but this will increase the amount you must finance. The higher loan amount will lead to more interest paid over the life of the loan. Before trading in a car you owe more on, carefully consider if it makes sense versus paying down your current loan first.

 

Current Auto Loan Interest Rates in PEI

In PEI, current auto loan interest rates range from about 4.5% to over 20%, with the rate depending heavily on your credit score. The average rate in Q3 2023 for new cars was 7.03% and for used cars was 11.35% nationally. This gives a good benchmark, though actual rates in PEI may vary.

In general, interest rates are lower when you get pre-approved financing from a bank or credit union before visiting the dealership. Rates tend to be higher when you finance through the dealership. For buyers with excellent credit (scores above 750), current rates through banks and credit unions in PEI tend to range from about 4.5% to 7%. Those with fair credit (scores in the 600s) will see much higher rates from 8% to 15% or more.

It’s recommended to check both bank and dealership rates to find the best terms. Provide the same information to each and compare. Negotiating can also help lower the interest rate. Those with very good credit have more leverage to negotiate a lower rate.

 

Loan Terms

The most common auto loan terms in PEI are 24, 36, 48, 60, 72, 84 and 96 months according to industry data. The average loan term is 72 months or 6 years. However, loans can range from as short as 12 months to as long as 96 months or 8 years.

Shorter loan terms of 24-36 months generally require higher monthly payments but save on interest costs overall. Longer terms of 72-96 months have lower monthly payments but accrue more interest over the life of the loan.

The down payment amount also affects the loan term length. Most lenders require 10-20% down for shorter 24-36 month loans. For longer terms, some lenders may approve loans with little to no down payment. However, larger down payments lower the amount financed and interest paid.

 

What Credit Score is Needed?

To get approved for the best auto loan rates in PEI, you’ll generally need a credit score of at least 650-700. Lenders view borrowers with scores in this range and higher as low risk, making them eligible for prime lending rates.

Borrowers with credit scores of 650 and above have a good chance of securing a competitive interest rate on their auto loan. However, those with scores below 620 will have a much harder time getting approved without a cosigner or a larger down payment.

Before applying for any auto financing, it’s a good idea to check your credit report from both Equifax and TransUnion. This will allow you to understand your current credit score and if any negative items need to be addressed. There are many online tools that provide free credit reports and scores.

If your score is on the lower end, taking steps to improve it in the 90-180 days before applying for a car loan can significantly boost your chances of getting approved at a good rate. Common tips include paying down balances, disputing errors, and not applying for new credit.

 

Checking Your Credit

It’s important to check your credit report from both Equifax and TransUnion before applying for an auto loan. This allows you to understand exactly where your credit stands, and to correct any errors that may be negatively impacting your score. Here’s how to get free copies of your credit reports:

– You are entitled to one free copy of your credit report from each bureau per year. You can request them online from Equifax and TransUnion’s websites.

– When signing up for your reports, you’ll need to provide your SIN, current and previous addresses, and answer some security questions to verify your identity.

– Once you access your reports, scour them for any errors. This includes incorrect account information, duplicate accounts, and any late payments or collections that aren’t yours.

– If you find mistakes, contact the bureaus right away to file a dispute. Provide documentation like bank statements and invoices to back up your claims.

– Getting errors removed can quickly boost your credit score. Don’t apply for a car loan until everything is accurate.

– You can also use free tools like Borrowell and Credit Karma to monitor your credit regularly. But double-check their accuracy with your official reports.

– With your reports in good order, you’ll put yourself in the best position to get approved for the lowest rates.

 

Improving Credit

If your credit score is below what most lenders want to see, don’t worry – there are ways to improve it quickly. Here are some tips to raise your credit score fast:

Pay down balances on any credit cards, especially those close to the credit limit. This can boost your score in as little as a month or two.

Become an authorized user on someone else’s credit card. As long as they have good credit, this can give your score an immediate boost. Just make sure they make on-time payments.

Check your credit report for any errors dragging down your score incorrectly. Dispute these with the credit bureaus to potentially see a quick improvement.

Pay off any collections accounts if possible. Even settling for less than the full amount can help. Get any agreements in writing first.

Limit credit applications until after your car loan, since too many hard inquiries can lower your score temporarily.

 

Pre-Approval – Why It Matters

Getting pre-approved for an auto loan before visiting dealerships in PEI has some key benefits:

  • You’ll know your budget and max monthly payment upfront, saving time negotiating.
  • Dealers will take you more seriously as an approved buyer.
  • You can shop for the best interest rate from lenders.
  • There’s no obligation to purchase once pre-approved.

 

The most common places to apply for pre-approval in PEI are:

  • Your bank or credit union – many have online applications.
  • Lenders like Car Deal Canada offer online pre-approvals.
  • Going directly to the dealership’s finance department.

 

Have your personal details, income docs, and down payment amount ready when applying. Pre-approval can take anywhere from instant to 2-3 days depending on where you apply.

 

Required Documents

When applying for auto financing, you’ll need to provide documentation to verify your income, down payment funds, and other qualifications. Here are some of the key documents lenders typically require:

Proof of Income

Lenders will want to see evidence that you have a steady source of income to repay the loan. Acceptable documents include recent pay stubs, bank statements showing direct deposit history, an employment letter verifying your position and salary, or tax returns if you are self-employed.

Down Payment

You’ll need to show proof that you have the cash available for your down payment amount. This could include recent bank statements, documentation of funds from the sale of another asset like a house, or a gift letter if you are using money gifted from a family member.

Make sure your bank statements align with the down payment amount you state on your application. Lenders may ask for an accounting trail showing where the funds originated.

 

Down Payments

When financing a vehicle purchase in PEI, the minimum down payment is usually around 5-10% of the purchase price.

Most lenders will approve loans with a minimum of 5% down payment. However, a down payment of at least 10% is recommended to get better rates and terms.

While the minimum is fairly low, putting down a larger down payment like 20% can have advantages:

 

  • Allows you to qualify for lower interest rates
  • Reduces the amount financed resulting in lower monthly payments
  • Builds more equity upfront

 

20% is considered an ideal down payment amount for most car purchases. But any amount over 10% will improve your financing terms.

If you don’t have sufficient cash savings, consider using the equity you have in a trade-in as part of your down payment. Most lenders will let you combine a down payment with trade-in value.

 

Trade-In Equity

If you currently have an auto loan on your trade-in vehicle, you may be able to use the equity you’ve built up towards a new car purchase. When you trade-in a financed vehicle, the trade-in value gets applied as a credit against the remaining loan balance first. Any positive equity then gets transferred over to your new auto loan.

For example, if you owe $10,000 on your current car loan but your vehicle’s trade-in value is $12,000, you have $2,000 in positive equity. This $2,000 can be used to lower the amount you need to finance for the new vehicle. Essentially, your equity reduces the net cost of the new car purchase.

Just keep in mind that rolling over negative equity from your old loan to a new loan means you’ll be financing a higher balance. This will increase the total interest paid over the life of the new loan. Carefully consider whether it makes sense to trade-in versus paying off your current loan first if you have negative equity.

Use an auto loan calculator to estimate payments based on different trade-in equity scenarios. Be sure to negotiate the best possible trade-in value to maximize your existing vehicle equity.

 

Negotiation Tips for Getting the Best Deal

When it comes to getting approved for an auto loan in PEI, negotiating the best deal involves strategies for both the vehicle price and the loan terms. Here are some tips to help you negotiate like a pro:

Research the vehicle’s fair market value using resources like Kelley Blue Book and Edmunds. This gives you a baseline for negotiations. Come prepared with printouts of similar vehicles for sale in your area to support your position.

Get pre-approved financing before visiting dealerships so you know your budget and terms. Don’t reveal the details too early or the dealer may not negotiate as aggressively on financing.

Negotiate the vehicle price first, before discussing financing terms. Be willing to walk away if you can’t get close to fair market value. There are always other vehicles and dealers.

Once you’ve agreed on a sale price, negotiate the interest rate, loan length, down payment, and any fees. Dealers often have more flexibility to adjust these terms to close the deal.

Consider having your bank or credit union compete with the dealer’s financing offer. This gives you extra leverage to negotiate the best possible rate and terms.

If you have a trade-in, negotiate its value separately after settling on the new car’s price. The trade difference can help with your down payment.

Never feel pressured into accepting an offer. Politely standing firm on your position keeps negotiations progressing in your favour.

 

Available Incentives and Rebates

There are some great incentives available for purchasing a new car in PEI.

The provincial government offers rebates for electric and hybrid vehicles through the Electric Vehicle Incentive program. Fully electric vehicles are eligible for up to $10,750 off the purchase price. Plug-in hybrids can qualify for rebates up to $5,000.

Many car manufacturers also offer customer cash incentives or discounted financing rates to move inventory. Your dealership can provide details on any current offers for the models you’re interested in.

Dealerships sometimes run special financing promotions as well, like reduced interest rates or no payments for several months. Check with your local dealers to see if they have any incentives on financing offers right now.

The key is negotiating – don’t be shy about asking for both the manufacturer and dealership incentives. With some persistence, you can get a great deal on a new car purchase with the PEI incentives available.

 

Choosing the Right Lender

When it comes to choosing an auto loan lender in PEI, you have several options to consider including banks, credit unions, and dealership financing. It’s important to compare all of your options side-by-side to find the best rates, terms, and overall value.

Banks such as CIBC, RBC, Scotiabank, and TD Canada Trust offer competitive interest rates and flexible loan terms. Many have online pre-approval tools to get the process started. Compare options across the major banks as rates can vary.

Local credit unions like Atlantic Credit Unions and East Coast Credit Union also provide auto financing with competitive rates. Credit unions are member-owned co-ops, so they may offer more personalized service.

Finally, you can finance through the dealership itself. This may come with manufacturer incentives not available elsewhere. Just be wary of dealers trying to upsell extras like extended warranties. Get quotes from other lenders for comparison first.

The most important thing is to get multiple quotes and compare all options side-by-side before committing. This ensures you get the best interest rate and loan terms for your situation.

 

Getting Quotes from Multiple Lenders

One of the best ways to ensure you get the lowest interest rate and best overall deal is to shop around and get quotes from multiple lenders. Don’t just go with the first offer you receive – take the time to compare options. Here are some tips:

Get quotes from at least 3 sources: your bank or credit union, the dealership financing department, and an online auto lender like Car Deal Canada. More quotes means more chances for the best rate.

To get an accurate quote you’ll need to provide details on the vehicle and your credit score. Have this info handy when requesting rates.

Compare the quotes side-by-side – focus on the APR, interest rate, fees, loan term, down payment required, and monthly payments. Look for the total cost of the loan over its lifetime.

Negotiate with lenders to try and beat competing offers. Having multiple options gives you leverage.

Read all fine print carefully before committing to an offer. Make sure you understand any conditions, fees, or changes to the deal.

Being a smart shopper when financing can save you thousands over the loan term. The lowest rate offer isn’t always from the first place you look!

 

Summary

Getting approved for an auto loan in Prince Edward Island can be straightforward if you follow the steps outlined in this guide. Here are the key takeaways:

 

  • Check your credit score ahead of time and take steps to improve it if needed. Lenders generally look for scores above 650.
  • Get pre-approved before visiting dealerships so you know what terms you qualify for.
  • Have all required documents ready to make the application process easy.
  • Make a reasonable down payment if possible to get better rates. Trade-in value also counts.
  • Negotiate the final price, interest rate, fees and any extras like warranties.
  • Compare multiple lenders to find the best loan terms and incentives.
  • Consider both dealership financing and bank/credit union loans.

 

Follow these tips and you’ll be driving off the lot with confidence. Our next steps will show you how to start the pre-approval process.

 

Next Steps

Now that you understand the auto financing process in PEI, it’s time to put this knowledge into action. Here are the key next steps to take for your car shopping:

 

Get Pre-Approved

Submit a financing application to lock in an interest rate and loan terms. Having a pre-approval letter gives you negotiating power at the dealership.

 

Research Incentives

Look into available rebates and incentives on your desired models. Consider timing your purchase around promotional financing offers.

 

Shop Around

Visit dealerships and get price quotes on the specific vehicle you want. Negotiate from the dealer invoice price, not MSRP. Get quotes from multiple dealers.

 

Compare Loan Offers

Once you have a purchase agreement, compare the dealer financing terms to loans from banks/CUs. Go with the most competitive rates and fees.

 

Review Paperwork

Carefully check the sales contract and loan agreement before signing. Make sure the terms match what you negotiated.

 

Enjoy Your New Ride!

You did your homework and got a great deal. Now put the top down and enjoy your new set of wheels with peace of mind.

Get Approved Today

See if you qualify in under 60 seconds

Questions About Car Loans in PEI?

All major locations across Prince Edward Island, including Charlottetown, Summerside, Stratford, Cornwall, Montague, Kensington, Souris, Alberton, Georgetown, and Tignish.

To qualify for the best auto loan rates in PEI, you’ll generally need a credit score of at least 650-700. Lenders view borrowers with scores in this range and higher as low risk, making them eligible for prime lending terms. Those with scores below 620 will have a much harder time getting approved without a cosigner or larger down payment. It’s recommended to check your credit reports from Equifax and TransUnion before applying so you understand where your credit currently stands. Take steps to improve your score if needed in the 90-180 days before applying.

The average interest rate on new car loans nationally was 7.03% and for used cars was 11.35% in Q3 2023. Rates in PEI specifically may vary slightly. Those with excellent credit scores above 750 can qualify for rates from 4.5% to 7% currently through banks/CUs in PEI. Buyers with fair credit in the 600s will see much higher rates from 8% to 15% or more when financing through dealers.

Getting pre-approved before visiting dealers has many benefits: you’ll know your max budget and monthly payment, dealers will take you more seriously as an approved buyer, you can shop lenders for the best rates, and there’s no obligation to purchase once pre-approved. Apply with your bank, credit union, or an online lender like Capital Honda which offers pre-approvals.

You’ll need to provide proof of income like recent pay stubs or bank statements showing deposit history. Have documentation of your down payment funds available, like bank statements. You may need utility bills or other statements as proof of residency. Make sure all details match on your application documents.

Most lenders will approve a car loan with a minimum down payment of 5-10% of the vehicle’s purchase price. While 5% may be approved, a down payment of 10-20% or more is recommended to get the best interest rates and loan terms. The higher your down payment, the lower your amount financed will be.

Yes, the equity you have in a trade-in vehicle can be applied towards the down payment on your new car loan. Any positive equity above what you still owe will be applied as a credit against the new loan amount. Using a trade-in for your down payment can help reduce the amount you need to finance. Just be wary of rolling over negative equity.

Common car loan terms in PEI range from 24-96 months. 24-36 month loans have higher payments but less interest. Longer terms of 72-96 months have lower payments but accrue more interest overall. The average loan length is around 72 months. Your qualified loan term depends on factors like your credit score and down payment amount.

Come prepared with vehicle research so you know fair value. Get pre-approved financing first. Negotiate the vehicle price separately before financing terms. Be willing to walk away if needed. Compare rates from the dealer, bank, and credit unions. Use competing offers as leverage when negotiating with each lender. Don’t feel pressured – politely stand firm.

PEI offers rebates up to $10,750 off electric vehicles and up to $5,000 off plug-in hybrids. Car manufacturers frequently offer customer cash incentives or discounted financing rates as well. Ask your dealer about any special financing offers they may have. The key is negotiating to bundle all available incentives.

Banks and credit unions often offer very competitive auto loan rates and flexible terms. Having their pre-approval gives you leverage to negotiate with the dealer financing. Many major banks like CIBC, RBC, and Scotiabank offer online applications for added convenience. Compare options across banks and local credit unions.

To get an accurate auto loan quote, you’ll need to provide the vehicle details (year, make, model), the sale price, your credit score range, desired loan length, and down payment amount. Also have your monthly gross income amount handy. With these details, lenders can provide quotes for your specific situation.

Getting quotes from several sources ensures you find the best possible rate and loan terms. Rates can vary significantly between banks, credit unions, and dealers. Even small differences in APR or interest rates can equal thousands in savings over the loan term. More quotes means more chances to find the lowest rate.

Compare interest rates, fees, loan lengths, and monthly payments across multiple lenders. Look at the total cost over the lifetime of the loan. Read reviews of the lender’s customer service. Local credit unions often provide great rates and member perks. But don’t rule out national banks either. Shop around for the optimal combination of competitive rate and great service.

Pay down credit card balances below 30% of the limit, dispute any errors on your credit reports, limit hard inquiries by not applying for new credit, become an authorized user on someone else’s credit card if possible, and pay off any collections accounts if you can. Improving your score even 50 points before applying can mean better loan approval chances.

Pre-approval can take anywhere from instant to 2-3 days depending on where you apply. Online lenders like Car Deal Canada can pre-approve in minutes based on soft credit checks. Banks and credit unions typically take 1-3 days as they analyze your full credit report. Dealers may be able to pre-approve you on the spot if you provide all required documents.

Yes, having a pre-approval letter in hand before negotiating gives you important leverage. It shows the dealer you are a serious buyer who has already been approved up to a certain budget. Don’t reveal the pre-approval terms too quickly. Finalize the vehicle price first before financing discussion.

PEI offers rebates up to $10,750 for fully electric vehicles and up to $5,000 for plug-in hybrids. These substantial discounts are through the Electric Vehicle Incentive program. Make sure to apply for any provincial incentives you qualify for when purchasing an EV or hybrid.

Watch out for admin fees, documentation fees, or prep fees when reviewing your final loan contract. These can often be negotiated out or reduced. Avoid addons like extended warranties which increase cost. Read the fine print carefully and know what each fee is for before signing. Don’t hesitate to question any charges that seem unclear or unreasonable.

You can roll negative equity from your trade-in over into a new car loan, but this will increase the amount you must finance. The higher loan amount will lead to more interest paid over the life of the loan. Before trading in a car you owe more on, carefully consider if it makes sense versus paying down your current loan first.

Get Approved Today

See if you qualify in under 60 seconds