Buying a car with cash isn't always the best option. Auto financing is an excellent way to fund the purchase, and qualifying for a car loan in Canada has never been easier!
The advantages of an auto loan are well documented:
- You don't have to dip into your savings or drain your available cashflow.
- You get to decide how much your monthly instalment will be.
- You do not have to provide any collateral (besides the vehicle itself).
- You can get approved without a down payment.
- Your credit score will improve thanks to positive payment history.
- You'll own the car at the end of the term (compared to leasing).
- Nowadays, you DO NOT need a good credit score to get approved (more on this point below).
But where should you go for auto financing?
Finding the right option can feel stressful, especially when you don't know where to start! This quick rundown will help you determine the best path forward...
Where to get auto financing in Canada?
Traditionally, if you want to finance a vehicle purchase in Canada, car loans could only be obtained through a bank or dealership. But thanks to technology, there is a third option that's emerging as a convenient alternative. Let's take a look at all three options available today.
Bank lending
The traditional way to borrow money, when you borrow money directly from a financial institution, you fill out an application form and meet with the bank manager to discuss the loan. Bank officials look at various factors such as your income, savings, and credit score before making a decision about whether or not to approve you.
The frustration with bank loans is the back-and-forth with paperwork and face-to-face appointments before you get approved for the loan. And if your credit score is low, there is a good chance that your application will get declined. Auto loans from banks are generally only available to borrowers with good credit.
Dealership financing
When you apply for financing through the dealership, you usually pick out the car you want AND THEN organize finance. Your dealer will send your application to their inhouse financing division or multiple external lenders (including banks) in the hopes of getting you approved for the car you want.
Unfortunately this process involves waiting for the approval, and if you get declined, your car search was a waste of time. Too many customers are left frustrated and disappointed when—after weeks of car shopping—they cannot get approved for the vehicle they want.
The rise of online auto financing
Online auto financing simplified car shopping for all Canadians. Financial technology companies (like Canada Drives) figured out a way to help car shoppers organize vehicle financing from the comfort of thier homes. For example, you can now get preapproved online before you even start looking at vehicles. Getting preapproved will give you a better idea of what vehicle options you can afford, and the required credit check will not damage your credit score. Furthermore, your preapproval does not commit you to a purchase; you still have to select your vehicle and make sure it's the right fit for you.
You can get preapproved for car finance in the dealership or bank too, but many of these lenders are not equipped to help you unless you have a good credit score. Meanwhile, Canada Drives has spent the last ten years building a network of prime and non-prime lending partners to help Canadians facing all types of financial situations.
Once you have your preappoval terms, there are hundreds of certified vehicles in our online showroom to browse. If you find a car you like with Canada Drives, you can organize the car loan with Canada Drives too—and you can do it all 100% online.
Simply fill out a quick application and you will receive your preapproval terms by text or email.
Shop with Canada Drives today
While it's a recommended step that could save you a lot of time and frustration, you don't need to get preapproved to shop with Canada Drives. You can go straight to our online showroom to shop for vehicles.
If you see something you love, there are several payment and financing options to choose from. You can finance with Canada Drives or secure a loan separately from your own financial institution. Additional payment options include paying in full via debit and credit cards, and through bank draft.
The Canada Drives Advantage
7-Day Test Own: Our 7-day “Love It or Return It” guarantee gives you an entire week to drive your new car and make sure you love it. If not, we'll give you your money back!
Buy Online & Save: Buying online means less overhead, no dealer fees, and thus more savings for the customer.
Flexible Financing Options: Get financing through Canada Drives lending partners, or separately with your own bank. You can also pay by debit, credit, or bank draft.
Free Warranty Protection: Your car is covered under our no-charge 30 Day / 1,500 km warranty for added peace-of-mind.
1-Click CARFAX History Reports: Get free CARFAX reports and know the full history of what you’re buying.
150-Point Inspections: Professionally inspected vehicles that meet a high standard of quality.
Delivered To Your Door: We’ll pick up and drop the car off for you – total convenience!
Certified Vehicles: Hundreds of SUVs, trucks, sedans, you name it – search our online showroom today!
Instant Quote Trade-ins: Easily find out what your trade-in is worth and include that in your shopping budget.
More resources
- How to Buy Your First Car in 4 Simple Steps
- How to Qualify for Car Financing with Bad Credit in Canada
- Are Certified Pre-Owned Cars Better than Regular Used Cars?
- 4 Common Car Loan Promotion Myths Debunked
- How to Check & Monitor Your Credit for Free in Canada
- See What Your Vehicle Payments Could Look Like With Our Car Loan Calculator
