Car Loans For Young Drivers in Canada: How to Get Approved

Have you just got your driver’s licence? Want to get out on the road and explore the countryside? Don’t have the cash to buy your own car right away so you're looking to finance a car loan as a young driver? You’re not alone. Thousands of young people qualify to drive but don’t have the money to buy a car for cash.

So, what are you to do?

We asked our auto loans team to outline three key things you need to know when you want to finance a car loan as a young driver.

You Need to be 18 to Access Credit

You can get your G1 at 16 and after a year get your G2 and another year get you the full licence. For many, that means you’ll get your full licence on or around your 18^th birthday.

That’s good because you cannot access any form of credit until you are 18.

That’s a universal rule, one of a few that works across the world. Different countries have different driving ages but almost every country has a minimum age of 18 to qualify as an adult to be able to access credit.

The Importance of Building Credit

Life is different for younger people, just like it was different for my generation and generations before mine. Everything changes, that’s the only constant.

For your generation, credit reports and credit scores are vital. They can influence how you live, what car you can drive, what type of phone contract you can have, even where you live in some cities.

So having a good credit score is essential.

You can begin building you’re the moment you turn 18 and we recommend doing that.

Get a credit card in your name. Set up an automatic payment for that credit card and use the card in the same way you use your bank card.

This is the important part. Don’t spend money you wouldn’t normally spend and clear the card balance every month. That way, you get all the convenience of a credit card without having to pay too much interest.

Using the card, making those automatic payments and clearing the card help contribute towards your credit score.

Once you add a phone contract, rent when you leave home, utility bills and cable, you’ll soon be building a decent credit score.

Saving for a Down Payment

While it’s tough planning so far ahead when you just want to get out and experience life, saving is vital. Whether you’re saving for a rainy day, something specific, college or an auto loan down payment, get into the habit of saving.

You should be saving at every stage of life. Sometimes it will be harder than other times to save but if you get into the habit early, it should quickly become second nature and require zero effort.

Then, when it comes time to get that auto loan, you have savings in the bank to make the down payment.

When you’re of legal age and ready for an auto loan, contact one of our auto loans team. We have the knowledge and expertise to help find you a great deal!