Auto Finance in Canada: The Key Details You Must Know
Buying a car can be hard. Our article will show you how to get a car loan, even with tough credit. Keep reading to find out more.
Key Takeaways
- You can apply for a car loan online with us or at the dealership in Canada.
- Even if you have bad credit, you can still finance a car. Banks and financial institutions offer loans with flexible terms, and some programs do not require Canadian credit history.
- In-house finance car dealers provide loans directly without using outside banks, which is an option for people with bad credit.
- To get a car loan, you need proof of income, driver’s license and a good credit score (or options are available for bad scores). Some variables may come into play if the banks or lenders are asking for further verification like a down payment, bank statements, proof of residence, and insurance quotes
- Dealers work with banks like TD Auto Finance, Scotiabank etc. to offer loans. With Auto Huss partnerships across over 4,500 dealerships in Canada, finding competitive lending options is easier than ever.
How to Finance a Car
To finance a car, you can apply online or at the dealership. Online applications and in-dealership applications are common methods to secure auto loans.
Online Applications
Online applications for auto loans have made getting a car easier. Fill out our online application and Hussein, the Director of Finance at Auto Huss, will get in contact with you directly.
We even help people new to Canada get cars.
As Of April 25, 2025, This Link Will Get You In Contact With One Of Our Experienced Finance Managers For Honest and Affordable Finacing.
In-Dealership Applications
Applying for car loans inside a dealership offers a direct path to financing your new vehicle. Sales staff, trained and licensed by the Vehicle Sales Authority (VSA), are ready on-site to guide shoppers through the application process.
These experts can provide details about interest rates, down payments, and special deals like gap insurance or warranties right there in the moment.
Can You Finance a Car With Bad Credit
Yes, you can finance and even lease a car even if your credit score is not good. Banks and financial institutions do offer flexible terms. They understand that not everyone has a perfect credit history.
As Of April 25, 2025, This Link Will Get You In Contact With One Of Our Experienced Finance Managers For Honest and Affordable Finacing.
These lenders provide options to help people buy vehicles without the best credit.
A lot of Banks like RBC offer a special loan for newcomers to Canada. This program does not need Canadian credit history. It helps new residents get cars with easier approval processes. Also, getting a vehicle loan with bad credit can improve your score over time if you make payments on time.
What Are In-House Finance Car Dealers
In-house finance car dealers offer loans directly to buyers. They do not use outside banks or credit unions. This can help people who have bad credit. The dealer acts as the bank and decides if they will give you the loan.
These dealers often sell used cars. They may allow more flexible payment plans. But, their interest rates might be higher than a bank’s. You get the car and pay back the loan over time.
What Do You Need To Finance a Car
Getting a car loan involves some key documents and requirements. The banks need to confirm your income, identity, and employment.
You would typically need:
- Drivers License to confirm identity
- 2 most recent paystubs to confirm income and employment
Banks and lenders may need further verification and may take the following into consideration
- credit score: A credit check shows how you handle debt.
- Down payment: A 15% down payment might be needed for some programs like the RBC Newcomer Automotive Loan Program.
- Bank statements: These prove you have money for payments and expenses.
- Proof of residence: A bill with your address proves where you live.
- Insurance quotes: Before lending, dealers want proof of insurance on the car.
Each item helps lenders decide if they can trust you with a loan. They check your ability to repay, based on income, spending, and past handling of credit.
How Do Car Dealers Finance Their Vehicles
Car dealers work with banks and other financial groups to provide loans for their vehicles. They team up with places like TD Auto Finance, Scotiabank, and RBC. This allows them to offer various lending options to buyers. They are essentially the middle man between you and the lender.
You are probably thinking, “Why would I go to a dealership for an approval when I can go directly to the bank?”. The reason you should go to a dealership is because the dealerships have built relations with banks and lenders, they can offer much better approvals. But of course always explore your options.
Conclusion
It’s important for Canadians to carefully consider their budget, monthly payment capacity, and overall financial health before entering into a financing agreement. Additionally, understanding the total cost of borrowing, including interest rates and fees, is essential.