When it comes to credit, there are no silly questions. Read contracts, read pamphlets, ask questions and ask for clarification if you don’t understand something.

Understand Your Credit Part 3: What’s a few points between friends?

One of the most common questions we get asked is, “What is my rate?”

This is an important question because it determines what portion of your payment is going to buying your vehicle and what portion is going to make your lender more money.

This is important: You, the lender and the person who did your paperwork are the only ones that know what your rate is. The person that did the paperwork will not remember your rate in 20 minutes. If you have previously had bad credit and the only options available to you have rates in the 20s and 30s, do not be ashamed or saddened; YOU GOT APPROVED!! Next you need to make sure that the loan is open so you can pay it off whenever you want. Ensure there are no penalties for early payout and that the lender reports to the credit bureau.

The reporting to the credit bureau is key. Regardless of the rate, lenders want to see that you can make payments on time. Making those payments will improve your credit score and the history along with the improved score will allow you to trade in your vehicle and get a better rate or renegotiate your rate with your lender.

You are not locked into the full term of the loan. You can trade out and adjust your rate. Typically, if your rate was 31.9 per cent to start, after 8 to 12 months, assuming all of your credit remains good, you can trade in and anticipate a new rate of about 20 to 24 per cent.

Eight to 12 months after that, assuming all of your credit remains good, your anticipated rate would be in the area of 12 to 20 per cent; 8 to 12 months after that, assuming all of your credit remains good your anticipated rate would be in the area of 8 to 15 per cent; 8 to 12 months after that, assuming all of your credit remains good, you would now be able to negotiate the 0 to 5.99 per cent rates for Prime credit. You have now “purchased” a new credit rating by financing cars over 32 to 48 months, as opposed to the 84 months people will say you need to re-establish your credit.

Who knew that vehicles could do more than get you from point A to B?

As the only remaining locally owned and family run dealership in Port Hardy, we at E.J. Klassen Motorcade want to help our community to continue to grow and improve. We want to help you fortify your credit against future dilemmas.

Remember, this is your credit, your money and your future. There are no silly questions. Read contracts, read pamphlets. Ask questions, ask for clarification if you do not understand something. Credit is potentially a long-term commitment; knowing what you are signing up for is important.

Feel free to come by anytime and we would be happy to look at your situation and see what we can do.

Comments are closed

Just Posted

Coroner’s inquest into fatal police shooting in Port Hardy begins in Campbell River

James Reginald Butters, 24, killed in 2015 after RCMP responded to call of male uttering threats

Forest fire 1.5 km from Sara Lake listed as out of control

While the fire is classified as out of control, they expect it to be under control imminently.

Port Hardy casting call

This is a paid gig $400 per person for the day.

62.5 pounder caught off north of Port Hardy

“It was a team effort to land this 62.5 lb fish”

20th annual OrcaFest takes over Port McNeill

Check out the North Island Gazette’s OrcaFest photo gallery!

VIDEO: Title of 25th Bond movie is ‘No Time to Die’

The film is set to be released in April 2020

‘Unsubstantiated’ bomb threat against CP Rail in Revelstoke

On Aug. 18, a bomb threat was made against CP Rail in Revelstoke

Victoria father charged with double murder of his daughters takes the stand

Andrew Berry pleaded not guilty to the December 2017 deaths

New ‘Matrix’ film set with Keanu Reeves and Lana Wachowski

Fourth installment to feature Reeves as Neo and Carrie-Anne Moss as Trinity

Catholic church buys $7.5M equestrian facility in B.C., plans ‘agri-retreat’ centre

Church hopes to grow crops, host students and others on Bradner property

New regulations require training for B.C. addiction recovery homes

Inspections, standards replace ‘wild west,’ Judy Darcy says

Trans Mountain gives contractors 30 days to get workers, supplies ready for pipeline

Crown corporation believes the expansion project could be in service by mid-2022

66% of B.C. residents want opt-out system for organ donation: poll

Support was lowest in Ontario and the Atlantic provinces

Vancouver Island rainbow crosswalk covered in mysterious black substance

Black substance spilled intentionally near Qualicum Beach school and difficult to remove

Most Read