Here’s the thing – there are a lot of factors that go into buying a car in Canada. Dealing with dealerships, banks and insurance brokers can seem like a monotonous task, especially if you’ve got classes to get to.
The good news, getting a vehicle may be easier than you think. In this blog, we’ll outline how to buy a car as an international student in Canada. Driving to class in style has never been easier!
Step 1: Get a Social Insurance Number
The fact of the matter is, if you need a student car loan, a SIN number is required in order to purchase a vehicle. This is because big-ticket purchases (over ten-thousand dollars) need to be reported to the revenue agency and the dealer will need your social insurance number for that. This unique 9-digit number grants you access to get paid in Canada, as well as, other government programs and benefits.
If you don’t already have one, Service Canada makes it pretty easy to apply. As an international student, you’ll need to gather the following documents:
- A study permit: this has to be issued by CIC (Citizenship and Immigration Canada) and indicate that the permit holder may either “accept employment” in Canada or a “confirmation to work off-campus” letter issued by the IRCC or CIC.
- Visitor record: similar to the study permit, the visitor record must be issued by the CIC and indicate that you are authorized to work in Canada.
- Diplomatic identity card and a note of permission of employment: this must be issued by Global Affairs Canada or Foreign Affairs, Trade and Development Canada.
Once you’ve gathered these documents, all you have to do is visit the closest Service Canada location and receive your new social insurance number.
Step 2: Get a Valid Driver’s License and Vehicle Insurance
If you are planning to purchase a vehicle, a valid Canadian driver’s license and insurance are mandatory. Here is what to do if you have a foreign driver’s license:
- Bring your license to a Service Canada location and find out if your country has a reciprocal agreement to obtain a license without having to go through the regular process.
- If your country does not qualify, you must provide confirmation of your driving experience written by the Embassy and translated into English by a qualified translator.
- You will then have to pass a vision test and a written knowledge test regarding your provinces rules.
- If you have less than 12 months of driving, you will have to get 12 months of driving experience before your road test.
- If you have over 12 months of driving, you can take a road test immediately.
A valid driver’s license is a requirement to qualify for auto insurance. Without auto insurance, you will not be able to purchase a new vehicle in Canada.
Step 3: Apply for a Student Car Loan
Now that you’ve got your SIN number and driver’s license, you may want to consider applying for an auto loan. However, if you are a new resident, your credit history may not be up to par to lease or finance a new vehicle. Remember, if you need a car loan, lenders need to know that you can pay it back on time. Here are the challenges to consider and how to get around them:
- Work or student permit: when going to the dealership, it’s important to establish that the terms of your loan do not exceed your permits expiry date. This is meant to show that you can pay off your vehicle prior to leaving the country.
- Have an income: showing ongoing income can lower your interest rate as you are deemed less of a risk. Being enrolled in a medical or ph.D program is another bonus as future income is more predictable and often paid for by the foreign government.
- Have a down payment: since you may lack a credit history, having a down payment may help with securing an auto loan. Remember, lenders want to know that they can recoup their investment within the loan term. Many dealerships guarantee car loans to students if a 60% down payment is presented.
If you’re a temporary resident in Canada and planning on extending your stay, or moving here permanently, getting a car loan is a great way to establish your credit history. At Cheap Cars Canada we’ve helped thousands of international students secure affordable car financing, so you’re not alone. With hundreds of thousands of vehicles to choose from and student car deals available, we can help find you a vehicle at a price that you can afford.
2