There are many significant benefits to paying off your car loan early and our team from Good Fellow’s Auto Wholesalers is here to further discuss and share some insight with you on this topic. Our used car dealership located in Toronto recommends that you work hard to pay off your car loan early because the end results will be worth it. Let’s dive into the top five benefits of this decision.
Save Money on Interest
Most Canadians who are able to do so, try and pay off their car loan as early as possible so that they can save their money. When you pay an extra amount of money towards the principal amount that you owe, you will end up paying less interest over the life of the loan. This means that you will have one less expense to pay per month and you can begin saving your money.
Begin Saving For Other Expenses
Once you pay off your car loan early, you can then begin saving the money you would have been spending on other expenses. For example, this could include other debts, groceries, or even saving for your next car. Decreasing your monthly expenses can help you save extra cash that can be used in other places.
Reduce Your Car Insurance
Did you know that paying your car loan early can result in a reduced car insurance rate? It’s true! When your vehicle credit is satisfied you can begin to think about how you want to proceed with your protection inclusion on your insurance. You can choose to keep the protection, remove crash inclusion, or choose to remove extensive inclusion and crash inclusion.
Lower Your Debt to Income Ratio
When you can manage to lower your debt-to-income ratio, lenders will begin to look at you as a trusted candidate with money as you are able to manage your payments and repay back the money you’ve borrowed. If you are thinking of purchasing a home or another vehicle in the future, having a low debt-to-income ratio is essential.
Having one less obligation to pay makes a world a difference. With the money you save, you can have the financial freedom to spend this new money as you please. Whether you decide to spend it on an activity with your family, or you decide to save it in the bank for a future expense, or you decide to invest it is completely up to you.
How We Can Help
If you are searching through Good used car dealerships to find a trusting and reliable dealership to work with, we recommend that you contact our team at Good Fellow’s Auto Wholesalers! Our team can help you discuss your options when it comes to paying off a car loan early. If you have additional questions or inquiries regarding your financial plans for your used car purchase from our dealership, you can give us a call at 1 (855) 581-9590 today!