Even if you don’t have a Canadian credit history, you may still take advantage of special offers to get preferred rates on auto loans if you are a newbie to Canada and sign up for it. You can still buy a car with a good credit score if you are a foreign worker. When the loan amount is more than $10,000, you may be eligible for financing with a down payment of 25%, provided that you are a temporary resident.
Things to Note When Buying Cars in Canada
- Credit approval is subject to the discretion of the National Bank of Canada. There are several eligibility criteria.
- The in-store automobile financing qualifies for the offer’s benefits. You can’t take advantage of this offer when you shop at a retailer that already provides auto finance through the National Bank.
- Newcomers and permanent residents are obliged to make an initial payment equal to twenty-five percent of the loan’s value for any financing amount of ten thousand dollars or more, up to a maximum of seventy-five thousand dollars. Above this price point and for any sort of car that is more than eight years old, financing is not an option.
Car Financing Options for Newcomers in Canada
A car loan is money borrowed from a credit union, a bank, a car dealership, or an online lender to pay for the purchase of a new or used vehicle. The car loan amount, plus any fees and interest, is repaid over time by monthly payments. If you fail to make loan payments, the lender may repossess your car to pay the outstanding balance.
The final repayment depends on the loan’s interest rate. Of note, you can have several payment options, such as monthly or bi-weekly. Financial institution for a loan (or possibly a line of credit) or choose a financing plan offered by the car dealer at the time of purchase. Here are the three main places you can buy a car in Canada:
- From financial institutions
- Online or internet lenders
- From a car dealer
New versus used automobiles
A new car will be more expensive, but it will have a full warranty. Because they are less expensive, used cars are frequently an appealing option. However, the warranty will be less comprehensive (if one is even offered). However, here is a disclaimer, a used car is likely to develop mechanical issues sooner. You probably need a test drive before choosing.
Private vs. dealer
Dealerships offer choice, security, and convenience. They’ll handle the documentation and provide you with a new plate (if needed). To ensure a worry-free transaction, used cars are usually multi-point inspected.
Private dealers accept cash and offer no assurances.
Car ownership requires a license, insurance, and registration. Before picking up the car, you need insurance. Your driver’s license is valid in Canada for 60–90 days as a new resident, depending on the province.