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Car loans as an immigrant to Canada

Car loans as an immigrant to Canada

Canada has always welcomed qualified immigrants and long may that continue. We were fortunate enough to deal with a recent arrival just last week which prompted this blog post. While the customer had a job and a permanent address, she found it difficult to acquire finance due to her circumstances. She isn’t alone.

If you’re new to Canada, you may find buying a car either very easy or hassle. Most European immigrants should find our systems familiar and those from the US should fit right in. If you need an idea of what to expect, here is what you need to know.

Buying a car in Canada

To buy a car in Canada you will need a valid driver’s licence. This can be a Canadian licence or an international driver’s licence if you’re a new arrival. You will find it much easier to get a car and be on the road if you apply for a Canadian licence as soon as you can.

You can swap your current driver’s licence for a Canadian one as long as you have ID, evidence of having driven for over two years, proof of permanent residence and proof of your right to stay. The process is relatively simple and involves a small fee paid to the agency.

You will also need valid insurance to be able to drive the car away. You won’t be able to get insurance without a driver’s licence. Some insurers will provide insurance for international driver’s licence holders but you will have to shop around.

Insurance is mandatory in Canada and you will not be able to drive away your car without it. You cannot even register the vehicle in your name without active insurance.

Car loans for new arrivals

If you need a car loan to purchase a vehicle, you will be treated much like a resident with no credit history. Foreign credit histories don’t count, only that which you have generated since your arrival in Canada. You will need all the paperwork necessary for a Canadian driver’s licence to access credit.

Many lenders will work with new arrivals as long as you have a permanent job, permission to remain in Canada, a permanent address and the documentation to back it all up. It will also help if you already have a Canadian bank account.

You will be treated as someone with zero credit history and should expect to pay similar interest on your car loan but credit is accessible as long as you have the paperwork. If you live close to a Car Nation Canada dealership, we would be happy to assist.

Canadian cities have excellent public transport but to make the most of our beautiful country you will need a car. Visit your closest dealership and we will make sure you get one!

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