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Expert Advice: Navigating the Car Buying Process in Canada

So, you’ve reached the decision that it’s the perfect time to buy a car. But where do you begin? To guide you through the car purchasing process, we’ve interviewed two expert auto lenders, Robin and Jess, to provide you with invaluable insights and tips. What we’ve learned – buying a car involves more than just taking it for a test drive!

Question #1: Key Considerations When Buying a Car

Your personal budget takes the top spot. It’s crucial to understand what you can afford before you start looking. Next, plan for any potential repairs the car might need during your ownership. Many people overlook this aspect, leading to financial troubles down the road. Lastly, decide between a new or used car. Each option comes with its pros and cons.

Don’t forget about insurance costs; it’s a requirement that a car under a loan must be fully insured. Many buyers overlook this cost when purchasing a vehicle.

Question #2: Common Concerns When Applying for an Auto Loan

Commonly, people ask if they are getting a good deal on the car they’ve chosen. I always advise them to compare values on NADA or even contact us for assistance. Additionally, it’s essential to research the chosen car by checking websites like, where you can find reviews from actual owners. Another crucial step is having a trusted mechanic inspect the used car before buying. It’s a small investment with significant benefits.

Monthly payments are another primary concern. It’s important to work within your budget to determine a comfortable payment. Don’t let the dealership or a car loan provider dictate your limits. Be honest with yourself about what you can truly afford.

Question #3: Importance of a Down Payment

A down payment can work to your advantage. It helps you build equity in your car, which is crucial, especially when purchasing a new car. New cars can lose about 25% of their value once driven off the lot. Having equity means your car is worth more than what you owe. This safeguards you from being in an upside-down situation where you owe more than your car’s value.

A down payment also leads to smaller monthly payments, making it a definite plus. However, if you need a car and haven’t been able to save for a down payment, it’s not a deal-breaker.

Question #4: Required Documentation for an Auto Loan

At a minimum, borrowers need to provide three things: proof of insurance (usually a valid insurance card), proof of income (such as pay stubs), and the purchase agreement from the dealer confirming your vehicle purchase.

However, depending on circumstances, additional documents might be requested to facilitate the approval process. For instance, self-employed individuals might need to provide the past two years’ income tax returns to verify earnings. In the case of a private party sale, a copy of the vehicle title and a lien card release might be needed instead of the purchase agreement.

Ready to embark on your car-buying journey? Apply for an auto loan with Toronto Car Loans today and make your dream car a reality!


Disclaimer: The information provided in this article is for general informational purposes only. It is not intended as legal, financial, or professional advice, and should not be taken as such. Always consult with a qualified professional or specialist before making any decisions based on the information provided. While every effort has been made to ensure the accuracy and completeness of this information, no guarantee is given nor responsibility taken for errors, omissions, or updates.

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