New arrivals soon realize that they need their own transport to get around comfortably in Canada. However, accessing auto loans can be a tricky process, where a helping hand can make all the difference. Some car financing firms have teams of specialists who can steer you smoothly through the loan approval process. But before reaching out for financial assistance, make sure you have the necessary documentation lined up, for faster financing approval. 

Here’s what you need to know:

  • A Canadian citizenship card, which is issued by the Government to confirm your residency status. It may take over a year to process your request (which is not an application for citizenship), which must be properly completed and supported by the correct documentation. This may include a copy of the personal data page of your passport or travel document, a permanent residency permit, a health insurance card, and a senior citizen ID, as well as your original driving licence and perhaps a letter from your licensing authority as well. If your documentation is in a language other than English or French, you must send in translations, together with an affidavit from the translator (who cannot be a family member). 
  • A Canadian driver’s licence, issued by the province where you live, with rules that are fairly similar, although specific regulations vary from place to place. Learner permits are issued at 16 years of age in all provinces (except for Alberta which accepts applications from 14 year olds). The standard age for full licence is 18 in British Columbia, New Brunswick, Newfoundland and Labrador, Ontario, and Saskatchewan; and 19 in Manitoba, Nova Scotia, Prince Edward Island, and Québec. 
  • Proof of employment or income, which can consist of a job offer letter that includes remuneration and terms of employment, even for seasonal workers or new hires just out of probation. Like everyone else in the world, Canadian car loans are generally based on credit scores and income. As you won’t have built up a credit score yet in Canada, lenders will focus on affordability, to see whether you are earning enough to pay back a car loan each month.

Car Insurance Is Vital for Auto Loans

With a Canadian citizenship card and driver’s licence, you can apply for vehicle registration and car insurance, both of which are crucial for owning vehicles in Canada. To take out a car loan, both these steps are needed, together with proof of employment or evidence of sufficient income to cover the monthly repayments. 

Mandatory car insurance in Canada includes liability coverage, which protects you against liability in an accident. Direct compensation offers coverage for vehicle damage. Accident benefits, medical and rehabilitation bills, funeral costs and loss of income.

Car Insurance Is Vital for Auto Loans

Canada is actively seeking immigrants – welcoming a record 405,303 newcomers in 2021 – and its auto loan market is keeping pace with these demands. With just over eight million immigrants living permanently in Canada – almost a third of them from India – immigrants now account for well over 20% of the Canadian population.

As a result, many major credit unions and banks in Canada are offering auto loans specifically for recent immigrants. Unlike regular financing, they require no previous Canadian credit history, allowing newcomers to buy the cars they need to travel around as they settle into their new homes. 

These flexible car financing options are available through many dealerships, covering new or used vehicles up to ten years old, terms as long as 96 months. For newcomers still finding their feet in Canada, an added advantage is the no-penalty option to pay off loans early, freeing up income for other expenses.


Renowned for cordiality, Canada’s financial institutions offer warm welcomes and friendly terms to newcomers from all over the world.

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