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Buying a Car in Canada as a Student A Guide

Buying a Car in Canada as a Student: A Guide 

So, you’re a student in Canada, fresh out of high school or college, and you want to buy a car of your own. Are you feeling a little intimidated by the idea? Don’t worry – buying a car as a student doesn’t have to be an intimidating process.

To buy a car as a student in Canada, you must first know your options. You have to know the basic requirements, the kind of car you want, how much you can afford, get a loan, and know the best deals on insurance.

These steps will help give you an idea of what it takes to buy a car as a student in Canada—so don’t feel overwhelmed! With some research and preparation, buying a car doesn’t need to be daunting!

Read on as we’ll cover how to find the right loan or lease option for your budget, what kind of vehicle might work best for your lifestyle and needs, and other important factors.

Basic Requirements When Buying a Car in Canada

Basic Requirements When Buying a Car in Canada

Buying a car in Canada when you’re a student isn’t impossible, but there are some important documents you need to have to make it happen. Here’s a quick rundown of the requirements for when you go to buy a car.

Requirements When Buying a Car 
Driver’s LicenseYou’ll need to have a valid driver’s license in order to buy and operate any vehicle. 
Make sure your license is up-to-date and conforming to both provincial and federal regulations.
If you’re an international student, make sure to check the rules around when you can apply for a driver’s license in your country.
Money Down / Financing DocumentsIf you’re putting money down for the car, be prepared for that too, with either cash or a cashier’s check ready to pay the dealer. 
If you’re taking out a loan, also have paperwork from your financial institution ready to show how much is being loaned, and at what interest rate.
Insurance InformationIt goes without saying that you’ll need insurance if you want to drive your vehicle. 
You’ll likely have been given information about different types of insurance at the time of purchase or lease.
So make sure to research the policies and rates in advance so that when it comes time to buy, you can ensure that your vehicle is covered through an affordable insurance plan.
Vehicle History Report & Inspection ReportTo do this, you should get both a vehicle history report and an inspection report from an authorized mechanic. 
Both of these will give you detailed information on the car’s condition, from the engine to the brakes, as well as accident history and recall notices.

No matter which province and city you live in Canada, these documents will be required when buying a car as a student. Knowing what is exactly needed before going into the dealership will help ensure that the process runs more smoothly!

Pros and Cons of Owning a Car as a Student in Canada

Pros and Cons of Owning a Car as a Student in Canada

If you’re a student in Canada, you may be wondering about the pros and cons of buying a car. After all, cars are not an investment–plus, they’re expensive!

However, cars are sometimes a necessity, depending on your situation. Let’s take a look at the table below to see the advantages and disadvantages of owning a car while you’re a student in Canada.

Pros and Cons of Owning a Car as a Student in Canada
Having the freedom to go where you please.

You no longer need to rely on public transportation.

If you buy a used car at a good price, it can prove to be cheaper than relying on transportation.
The financial burden that comes with owning and maintaining a car.

The initial investment can be daunting.

You can’t immediately buy a car unless you find an affordable purchase option.

To sum it up, it is possible for students to buy a car in Canada, but it is important to assess the financial impact of the purchase within the scope of your current budget. 

If you can make it work, it is a great way to start building credit, as well as to give yourself the freedom to travel without relying on public transportation.

Where to Get the Best and Cheapest Cars in Canada

There are a couple of good options for Canadian university students looking for a cheap 

car. One is to look online, either directly from dealerships or from private sellers.

AutoTrader Canada
Data sourced from: AutoTrader Canada

Most dealerships in Canada will have special offers or discounts that may be available exclusively to students. However, it is important to remember that each dealership will have different incentives, so shop around before committing.

Visiting used car dealerships can also be helpful when looking for an affordable car. Used dealerships may have cars that fit your budget and typically have more flexible financing options. 

You should also take the time to inspect any used vehicle before purchasing it so that you know what you’re getting into financially.

Average Cost of a Car in Canada

Average Cost of a Car in Canada

It’s not just possible, but also quite common for students to buy a car! But let’s get into specifics: what’s the average cost of a car in Canada?

According to Statistics Canada, in 2020 the average cost of buying a new car was $40,528. That may seem like a lot, but depending on the model and how you pay for it, you could get away with paying less.

Average Cost of Top Searched Vehicles
Ford F-150$72,045$41,075
BMW 3 Series $66,066$31,089
Toyota RAV4$39,753$32,287
Honda Civic$35,171$15,417
Ford Mustang$63,671$39,438
Jeep Wrangler$63,337$42,928
Data sourced from AutoTrader Canada

For instance, if you go for something that’s used and of lower value, you can save some money upfront. Just make sure that the dealer is reputable and that the vehicle is reliable and safe. 

Another option is leasing a car. Leasing has become an increasingly popular option when it comes to buying cars because it typically requires lower monthly payments than if you were financing or buying outright.

And finally, there are government-offered grants and loans available specifically for students looking to purchase a vehicle; check with your local dealership to see what kind of incentives they offer – you might be pleasantly surprised!

5 Tips When Buying a Car in Canada as a Student

5 Tips When Buying a Car in Canada as a Student

When you’re a student, buying a car can be a great milestone. To make the process easier, we’ve compiled some tips that you can keep in mind:

1. Research different financing options. 

Research different financing options' Homepage

Before you even start looking at cars, it’s important to know how you’re going to pay for it. There are several financing options available and researching them all will help you compare and find the best fit for your situation.

Car Financing Options for Students in Canada
Canada Drives$500 – $35,00029.99% – 46.96%9 – 60 mos.
Splash Auto FinanceUp to $50,000Varies12 – 84 mos.
I-SafeLendUp to $50,0008.99% +12 – 72 mos.
SkyCap Financial$500 – $10,00012.99% – 39.99%9 – 36 mos.
Eden Park FinancingVaries11.9% +12 – 84 mos.
Data sourced from: Loans Canada

You’ll also want to look into different promotions offered by car dealerships. Many dealerships in Canada provide special incentives for students buying their first vehicle, such as discounted rates or extended warranties. 

Finally, don’t forget to check inflation rates before making your decision—you’ll want to make sure that the loan you take out won’t become unmanageable over time due to changes in the economy. 

With solid research and a little bit of planning, buying a car as a student can be an achievable goal!

2. Select your vehicle based on your budget and needs.

Select your vehicle based on your budget and needs' Homepage

Choosing a car that best suits your needs shouldn’t be too difficult. Even if you don’t have an unlimited budget, you can take measures to ensure that the car you buy fits your needs and budget.

First, consider what type of vehicle you’re looking for — sedan, hatchback, SUV, etc. Think about how much space you need in the car and how many people will be riding with you. 

From there, consider what features or amenities are important to you — a fuel-efficient engine, Bluetooth compatibility, cruise control? Then comes the tricky part: setting a budget. 

Sample Breakdown Cost of Owning a Car

This includes more than just the sticker price of the vehicle — factor in maintenance costs and extra fees such as registration and insurance, as well as gas money. 

Fortunately, there are several financing options for Canadian students these days, so make sure to explore those too!

3. Shop around.

Shop around's Homepage

Doing some comparison shopping can help you get the best deal and the best car for your needs. Start by looking at the available new and used car models in your price range. 

You can also look into leasing options or special offers from auto dealers and auto manufacturers themselves. Make sure that you understand all the terms and conditions of any offers or agreements before you sign anything!

Next, be sure to use the resources of organizations like student organizations and student unions to help get you the best deal possible on your new vehicle. 

They may be able to provide free consultations or special discounts on certain cars in order to make it easier for students to afford vehicle ownership.

4. Obtain pre-financing or pre-approval.

Obtain pre-financing or pre-approval's Homepage

If you’re a student in Canada, chances are you don’t have a lot of spare cash lying around. That’s why it’s important to obtain pre-financing or pre-approval for the loan you need to help cover the costs associated with buying a car.

This will give you an idea of how much money you can borrow and help make your car-buying experience easier. It is important to note that pre-financing or pre-approval does not guarantee loan acceptance or repayment terms.

To obtain pre-financing or pre-approval, you will need to submit an application and credit information to lenders, such as banks and credit unions. Many car dealerships offer in-house financing programs to make the process easier for buyers.

Car Loan Requirements in Canada

You’ll need to provide the following documents in order to be approved for a car loan:

  1. You may be asked to provide at least three of your most recent pay stubs if you are a working student.
  2. Bring a photo ID and proof of address if you are above 18.
  3. A valid driver’s license.
  4. All of the aforementioned paperwork will also be required if you have a co-signer.

Once the lender has processed and approved your application, they will provide you with your maximum loan amount and repayment terms, as well as estimates of the interest rate they will charge for the loan.

5. Get a vehicle history report.

Get a vehicle history report's Homepage

It’s always best to get some insight into the vehicle’s history before signing any paperwork.

So consider running an AutoCheck Vehicle History Report or Carfax Vehicle History Report to check if the vehicle has been involved in any accidents, recalls, or damage resulting from theft, floods, or other natural disasters.

Once you have a vehicle history report, take a close look at it for any signs of fraudulent activity or lies about the car’s true condition. Make sure to thoroughly examine everything from mileage to repair work to mechanical inspection records. 

This can be time-consuming, but it could save you from buying a lemon and having to incur costly repairs down the line.

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