While it would be great for dealerships and banks to just give away their money to us without a hassle, it makes sense that lenders need information about our finances and the deal they’re entering into before they fork over thousands of dollars.
When you’re applying for an auto loan, whether the car is new or used, you’ll need to bring information and documentation before you’re approved. In this post, we’re going over 5 documents and pieces of information that you need to bring with you as part of auto loan requirements.
1. Proof of Insurance
Ontario law requires that all vehicles are insured. You usually cannot purchase a car or drive a car off the dealership lot without proof of insurance, so it makes sense that proof of insurance is a requirement for auto loans.
If you have insurance for a different vehicle, you might already be covered. Double check with your policy to see if that’s the case. If it’s not, you’ll need to secure a policy for your new vehicle and get proof of that coverage.
2. Proof of Income
Lenders want to make sure that you’re going to be able to pay them back before they approve you for a loan. They do this by ensuring that you’re actively earning money.
Proof of income can take the form of bank statements, tax returns, tax history, pay stubs, and sometimes employer verification. You’ll likely need at least 3-5 months of documentation proving this income, and some may require a couple of years worth of tax documents.
Lenders require you show proof of identity with ID documents like a license or a passport. Most lenders require government-issued documentation with a picture of you to further ensure the person they’re giving the loan to is you.
You may also be required to give them your social insurance number (SIN) so they can run a credit check on you. In order to get an auto loan, you usually need to have fair to good credit. Credit is based on your debts, payment history, credit history, and other similar factors.
4. Proof of Residence
You’ll also need to prove your residence, which can often be done with the same document you used for your ID (passport, license, etc). You can also use bills from the past few months with your address on it, credit card statements, insurance bills, etc.
5. Vehicle Information
Especially important for purchasing used cars, lenders want to know about the car you’re buying. The make, model, year, condition, vehicle identification number (VIN), the price, car mileage, and a copy of the car’s title are all going to be required.
Prepare These Auto Loan Requirements to Get on the Road ASAP!
Bringing these documents and auto loan requirements to the dealership or lender is going to help you get approved and driving as soon as possible.
If you’re worried about your credit history but still need financial assistance to get a car, don’t hesitate to contact us!