Great Car Deals With Convenient Dealership Financing 

By John Hayden

Car dealerships have come a long way since their earliest days.  No longer just glossy showcases for the latest models, they must also offer great deals with convenient dealership financing. But in an increasingly competitive market, successful car salespeople know that they must offer far more than just a shinier set of wheels. 

Shopping around for the best deals on their smartphones in only a few seconds, today’s penny-wise consumers demand top value for their hard-earned dollars. That’s because they want cash-equivalent benefits.  Among others, these may include extended warranties, winter tire packages, longer payback periods, and low or even zero percent interest.

Canadians Favour Dealership Financing

Fuelled largely by the Internet, buyers expect perks and promotions that extend beyond simple discounts or a backing-up camera. Attracted by the convenience of one-stop shopping and closing the deal faster, 58% of Canadians say they will finance their next vehicle purchase through a dealership. 

Significantly higher than the global average of under 50%, this reflects a high level of trust in local dealers. Even more surprising, 70% of Canadians say they look at only one lender when deciding to purchase a vehicle.  This is the highest figure among nine countries in a recent international survey.

Narrowing Down The Choices

There’s obviously nothing inherently wrong with entrusting the financial side of a car purchase to a dealership. However, there’s no one-size-fits-all solution when it comes to money, so consumers should check out all convenient dealership financing possibilities, before picking the option that best meets their needs.

 There are two main avenues for purchasing a vehicle 

  • Financing is how most Canadians buy their cars (and improve their credit ratings), seeking loans from manufacturers, dealers, banks, and other financial institutions for periods ranging from two to eight years, often with a down payment and at interest rates varying from 0% to 7% p.a.

         Upside: once the loan is paid off, the borrower owns a solid asset;

         Downside: family budgets can change, undermining the feasibility of monthly payments.


  • Leasing usually costs less each month than financing, because the driver is paying only for expected loss of value through depreciation during the lease period, plus taxes, fees, and rent charges;

          Upside: the vehicle can be traded in for a new (or different) model at any time;

          Downside: monthly car payments never end, continuing for as long as the lease.

Car Financing Pitfalls 

For many Canadian car buyers, sticker prices are almost irrelevant. Instead, their decisions are steered by the size of the monthly payments, which are usually fixed.  Lengthier loan terms (of up to a financially perilous eight years) offer lower instalments.  Logically, these smaller amounts slot smoothly into even the tightest family budgets.

In 2019, the average auto loan was taken out for 69 months – almost six years. Consequently, a larger segment of the population is now opting for even longer loans of 84 or even 96 months. However, longer terms mean that consumers are actually paying out more through these apparently budget-friendly lower instalments, with higher interest rates and finance charges that build up steadily over time. 

Finding the Most Convenient Dealership Financing

Most financing deals in Canada cover around 110% of the vehicle sticker price. This is because taxes, freight, licensing fees, and other expenses are paid on purchase. Even larger amounts can easily be arranged by dealers eager to attract sellers wanting to upgrade before paying off the loans on their current vehicles. 

Crucial elements in dealership sales processes, the three main incentives offered by Canadian dealerships are all financial:    

  • zero percent loans, often pre-approved for more realistic vehicle choices; 
  • no down payments, offset by longer loan terms; and/or
  • cashback options, frequently offered to push slow-moving models off the lot.

Great Deals for Everyone

Right in tune with their markets, Canadian dealerships are keeping pace with Internet-savvy customer demands. Through virtual showrooms, online financing, and home deliveries, every would-be buyer can find their ideal vehicle.  And today, tempting loan conditions are available to almost everyone, even borrowers with bad credit! 


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