Personal Finance

Need help/advice for first car loan as a newcomer to Canada

  • Last Updated:
  • Nov 11th, 2017 10:33 am
[OP]
Newbie
Sep 6, 2017
5 posts

Need help/advice for first car loan as a newcomer to Canada

Hey,

I've been in Canada since March of this year. We need a new vehicle, at least within the next 6 months...I plan to purchase sometime in the spring. Upon moving here I obtained a Scotiabank credit card (visa) and not too long ago I applied for 2 lines of service with Telus and was approved for high-end smartphones with no deposit required. I also have an electric bill in my name with our new place, but I know that doesn't really relove around my credit (unless I don't pay it). I pay my bills on time and have a good credit score (mid/high 700's) - as well as a good paying, full-time job. My credit card is paid off in full each month and I try to only utilize around 30% of it.

I was wondering if I should wait until March/April to apply for a car loan that way my Canadian credit history will be 1 year old at that point, or should I be okay to apply sooner...or should I wait longer? What are the chances of approval? Has anyone had experience in purchasing a car in Canada after landing and establishing credit, how long did you wait, what was the purchase or lease amount? We're looking at a Subaru WRX or a 4x4 Truck, so anywhere from 30-40k. I plan to purchase new (not lease) as I know banks usually will approve easier on new cars rather than used, and I plan to put anywhere between $5,000-$8k as a down payment, maybe more. Do you know if it'll be easier to be approved for new versus certified pre-owned (such as a barely driven, year old model)? We thought about leasing but after doing the math it wouldn't make much sense to us and our future plans; plus I know leasing requires very high end credit from my previous experience in the US, doubt I can get approved with 1 year of credit history only.

Thanks for any help.
9 replies
Member
May 7, 2017
282 posts
119 upvotes
you will get approved.

Cars are collateral compared to credit cards.
[OP]
Newbie
Sep 6, 2017
5 posts
BeanFinn wrote:
Nov 9th, 2017 5:15 pm
you will get approved.

Cars are collateral compared to credit cards.
Thanks for the confidence boost. Do you know what kind of rates I'd be looking at with 1-year credit history and say 10%-15% down payment, overall good score? The only downside of moving here is I lost all my US credit and history which was great with over 10 years of history. Starting over sucks! Should I look at new vs pre-owned for better rates? Usually from my experience the new cars get better financing rates but you lose value as soon as you drive it off the lot. With a Subaru STI or full size truck, or even a truck like a Tacoma, those models generally hold value really well.
Member
Feb 21, 2010
411 posts
69 upvotes
Scarborough
You will get the best rate car company is offering. If you are putting like 15% down, you will get the absolute best out there for that model offered by the company.

Do not fall into any trap with dealer financing offers with higher interest rate. Also do not pay any financing or application fees. If dealer doesn't agree, go to the next dealer. And lastly, it is ok to shop around and get multiple hits within 2 weeks window. Don't be afraid
[OP]
Newbie
Sep 6, 2017
5 posts
romeocanada wrote:
Nov 9th, 2017 10:32 pm
You will get the best rate car company is offering. If you are putting like 15% down, you will get the absolute best out there for that model offered by the company.

Do not fall into any trap with dealer financing offers with higher interest rate. Also do not pay any financing or application fees. If dealer doesn't agree, go to the next dealer. And lastly, it is ok to shop around and get multiple hits within 2 weeks window. Don't be afraid
Thank you. What's the least amount I could put down and still get the best rate?
Member
Feb 21, 2010
411 posts
69 upvotes
Scarborough
> 10-15% should be enough
RedWings88 wrote:
Nov 10th, 2017 3:51 am
Thank you. What's the least amount I could put down and still get the best rate?
Member
User avatar
Oct 19, 2016
393 posts
134 upvotes
Toronto
Its not the car loan you should be worried about. Its the insurance. LOL. Your looking at probably $800 monthly just for liability.. if your in toronto.
[OP]
Newbie
Sep 6, 2017
5 posts
I'm not a new driver, I have a full 40% discount through ICBC...been driving since I was 15 and I'm now 29. My US records transferred just fine. I don't want an ecnobox and don't need a lecture on if my car is worth the payment or not, I understand I could buy a used cheap car but some people are different than others. Also I don't see how Telus was a bad choice given I need new phones and it helps build my credit. I have alot of extra income per month so it's not like I'm living outside of my means ... I still out 500/m in savings

To everyone else, thanks for the replies
Last edited by RedWings88 on Nov 10th, 2017 2:22 pm, edited 1 time in total.
Deal Addict
Jan 20, 2016
1366 posts
514 upvotes
Houston, TX
RedWings88 wrote:
Nov 9th, 2017 5:02 pm
Hey,

I've been in Canada since March of this year. We need a new vehicle, at least within the next 6 months...I plan to purchase sometime in the spring. Upon moving here I obtained a Scotiabank credit card (visa) and not too long ago I applied for 2 lines of service with Telus and was approved for high-end smartphones with no deposit required. I also have an electric bill in my name with our new place, but I know that doesn't really relove around my credit (unless I don't pay it). I pay my bills on time and have a good credit score (mid/high 700's) - as well as a good paying, full-time job. My credit card is paid off in full each month and I try to only utilize around 30% of it.

I was wondering if I should wait until March/April to apply for a car loan that way my Canadian credit history will be 1 year old at that point, or should I be okay to apply sooner...or should I wait longer? What are the chances of approval? Has anyone had experience in purchasing a car in Canada after landing and establishing credit, how long did you wait, what was the purchase or lease amount? We're looking at a Subaru WRX or a 4x4 Truck, so anywhere from 30-40k. I plan to purchase new (not lease) as I know banks usually will approve easier on new cars rather than used, and I plan to put anywhere between $5,000-$8k as a down payment, maybe more. Do you know if it'll be easier to be approved for new versus certified pre-owned (such as a barely driven, year old model)? We thought about leasing but after doing the math it wouldn't make much sense to us and our future plans; plus I know leasing requires very high end credit from my previous experience in the US, doubt I can get approved with 1 year of credit history only.

Thanks for any help.
Scotiabank used to have some "newcomer" programs for car financing, worked even with very short credit history (especially you already dealing with them)
1y history could be quite enough to lease a car, at least worked for me.

P.s. Funny I'm in quite same boots (again!) in USA, as I do not have US credit history and started from almost very begining

P.s.s. If you had car finance/lease in USA through car manufacturer finance company (e.g. Nissan Finance, Honda Finance etc) try to go to them in Canada - they could connect with their USA colleagues and get your history here.
At least Nissan financial person in USA was able to contact Nissan Finance in Canada, get my history there and make 0.9% financing opposed to 10%-20% as for no history person...
If you had Amex in USA you could "transfer" it to Canada...
Make the Trudeau drama teacher again!
Deal Addict
Feb 29, 2012
2662 posts
1394 upvotes
Richmond
asa1973 wrote:
Nov 10th, 2017 2:22 pm
Scotiabank used to have some "newcomer" programs for car financing, worked even with very short credit history (especially you already dealing with them)
Many years ago when I started my first job after university in a new city, I went into the closest bank (BMO) and asked if I could get a loan to buy a new car. After making me wait for 30 minutes to talk to a loan manager, he basically laughed at me and said I had insufficient credit history. Later in the week at the new car dealership, they said a bank loan shouldn't be any problem, and directed me to Scotiabank, which happened to have the 2nd-closest branch to my new home. They gave me the loan immediately. For many years afterwards I did all my business with Scotiabank and wouldn't touch BMO. Of course it's been a while since then, and now I wouldn't use either one of them!

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