Here's a simple guide to the options available to you should you want to purchase a car in Canada.
Buying A Car Cash-Down
As mentioned in our article about finding housing in Canada, Kijiji.ca is a hub for buying and selling almost anything, including cars.
You can find a list of used cars in your area, which you can buy cash-down (some sellers allow you to finance the car - pay in installments).
You will be interacting with the seller/owner directly, so be sure to do your homework regarding the state of the car (check mileage and request for a CARFAX Canada Report to ascertain vehicle history).
Financing A Car
In Canada, after oxygen and your Social Insurance Number, your credit score comes next. You need a good credit score to be able to secure a loan to buy a house or a car.
Financing a car means that you pay in monthly or biweekly installments until you have completely paid the loan off.
Most car dealerships will need to confirm the following before loaning you money to finance a car:
You have a G2 or G license
You have car insurance
You have a good credit score
The interest rates for the loan given to you will differ from dealership to dealership, so be thorough and take your time shopping for the best deal. Most dealerships will also serve as middlemen and will procure the CARFAX Canada report on your behalf.
Building Your Credit Score
As a newcomer, one of the best ways to build up your credit score is to get a credit card which you can use for small to medium purchases. Make sure you pay off the credit you have incurred in full before the due date on your monthly credit card statement.
As you begin to pay off larger debts like car loans and monthly mortgages, your credit score will increase.
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