First Time Car Loans Guide: Everything You Need to Know
First Time Car Loans Guide: Everything You Need to Know
Posted on June 3, 2022
Just qualified? Going to college soon and need a car to get around? You’re not alone. This is a situation faced by many Canadians each year. Having just got their licence and wanting their first taste of real freedom. But how to buy pay for your new car? If you haven’t had time to build credit, how do you get first time car loans? Our Georgetown auto loan team explains your options.
First Time Car Loans With No Credit
If you’re a young driver who has just turned 18 or are new to Canada, you are now able to access credit but probably won’t have much of a credit score yet. That can be a challenge but nothing you cannot overcome with a little help.
Our Georgetown auto loan team often works with immigrants, students and young people to secure their first auto loan. We could help you too.
You could help yourself too by following these simple steps.
Save for a down payment
A down payment is an essential ingredient for most Georgetown car loans. While not mandatory, they improve your chances of being accepted for the loan as well as reducing the amount you need to borrow.
The more you save, the less you’ll need to borrow. You’ll have to decide how long you can go without a car while you save though.
Get a credit card
While you’re saving, get a credit card and begin using it. Be sensible, use it for your usual expenses rather than going on a spending spree and clear the balance each month to avoid paying interest.
Set up automatic payments to cover the minimum and you’ll begin building a payment history, which, in turn, will begin creating a credit score.
Get a job
Yes, we know your parents probably say this to you all the time, but there is method in our madness. To qualify for an auto loan, you need sufficient income to make the monthly payments. The vast majority of you will need to get a job to be able to do that.
It could be part time, as a freelancer or gig worker, online or whatever. As long as it provides demonstrable income you can present to a lender, it will strengthen your loan application.
Get organized
Auto loan applications involve a lot of paperwork and you’ll need to be organized when it comes time to apply.
You’ll need official proof of ID, of address, 3 months’ bank statements, proof of income and any paperwork regarding any other type of income you might have.
The more paperwork you can put together to support your application, the easier you’ll find it to qualify.
Work with auto loan experts
You will initially find it a challenge to qualify for an auto loan when you don’t have credit but no problem is insurmountable. If you work with auto loan experts like us, we know of many lenders willing to work with young people, students and those who have low or no credit scores.
If you need help or advice on anything to do with auto loans in Georgetown, contact Car Nation Canada today, we can help!
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