Buying a Car When Retired in Ontario: Explained in 5 Minutes

A common desire among the many retirees we encounter while working here is to hit the road and travel across Canada. It's a big country, and most of us only get to see a small portion of it while we're working. Which raises the question of whether purchasing a car after retiring differs significantly from doing so while working.

We asked our auto loans team to outline how you might go about buying a car when retired. If you want to explore Canada and your current car isn’t enough, there’s nothing to stop you getting another.

Buying a Car When Retired

The good news is that you may still get a new car and take out a loan to help pay for it even though you are retired.

You should be fine as long as your pension is enough to meet both the payments and your normal expenses.

Lenders are much more concerned with the consistency of revenue than the source of that income.

Lenders don't really care where anything comes from as long as it's legal; they only care that it's adequate for the job at hand and consistent enough to pay back the loan.

Applying for Your Car Loan as a Retiree

The procedure hasn't changed much from the last time you applied for a car loan, and it will probably go precisely as you recall.

The only variation will be in the loan terms. For obvious reasons, lenders are hesitant to give retirees or elderly customers the longest loan terms.

You have access to the entire market, but it's possible that you'll only be offered 3-5 year vehicle loans rather than 7-8 year ones.

Proof of income is required since retirees are treated exactly the same as younger borrowers.

You must provide evidence of your income as well as proof that you can repay the loan, including supporting documents.

The biggest distinction is where that income comes from. It is more likely to come through investments, pensions, IRAs, or social security than from a salary.

You should have no trouble buying a car when retired as long as you have the documentation to prove your income.

Save money for a down payment or save aside enough money to put between 10 and 20 percent of the car's value down.

By doing this, you increase your chances of getting the loan and lower the amount you have to borrow.

Check your credit score. Credit ratings are crucial throughout your life, so make sure yours is still high enough for you to be able to borrow the money you require.

Utilize an auto loan calculator. They are widely available online. Calculate how much you could borrow and easily afford to repay using the numbers.

Visit us - We can assist you with purchasing a car when you are retired after you know how much you can afford, how much you want to borrow, and how much you have to put down.

The procedure is quite simple. Depending on what we discover, we check your situation and proceed with prequalification or preapproval.

These are test runs to determine more precisely how much and at what rate you could borrow.

Then, armed with this knowledge, we can decide for ourselves whether to borrow money, how long to borrow it for, and other important aspects.

If you're ready to buy a car when retired, we'd love to help with that! simply fill in the form below to get started.