\u003Cbr />\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>APR\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: The APR includes not only the interest rate but also additional costs such as fees and closing costs, giving a more comprehensive look at the total cost of the loan.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">One key distinction is that the \u003C/span>interest rate\u003Cspan style=\"font-weight: 400;\"> focuses solely on the cost of borrowing based on the loan principal, while \u003C/span>APR\u003Cspan style=\"font-weight: 400;\"> offers a more holistic view by accounting for various associated fees. This means that APR will typically be higher than the interest rate.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>Types of APR\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cstrong>Fixed APR\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> and \u003C/span>\u003Cstrong>Variable APR\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> refer to two different types of interest rates that can be applied to loans, credit cards, and other forms of credit. Each has its own characteristics, advantages, and potential risks. Let’s break down the differences between the two:\u003C/span>\u003C/p>\r\n\u003Ch3>\u003Cstrong>Fixed APR\u003C/strong>\u003C/h3>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">A \u003C/span>fixed APR\u003Cspan style=\"font-weight: 400;\"> means that the interest rate remains constant throughout the life of the loan or credit agreement. It does not change based on market conditions or economic shifts. This provides \u003C/span>predictability\u003Cspan style=\"font-weight: 400;\"> and consistency for the borrower, as the monthly payments and interest costs will remain the same.\u003C/span>\u003C/p>\r\n\u003Ch4>\u003Cstrong>Key Characteristics of Fixed APR:\u003C/strong>\u003C/h4>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Stability\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: The rate is set at the beginning of the loan and does not change.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Predictable Payments\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: You’ll have the same interest rate and payment amount for the duration of the loan term, making it easier to plan your finances.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Protection from Rate Increases\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: A fixed APR shields you from rising interest rates in the broader economy.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Ch4>\u003Cstrong>Common Uses of Fixed APR:\u003C/strong>\u003C/h4>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Auto loans\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Most car loans have fixed APRs, so you know exactly what your monthly payments will be.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Personal loans\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Many personal loans offer fixed APRs for set loan terms.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Mortgages\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Some home loans also have fixed APRs.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Ch4>\u003Cstrong>Example of Fixed APR:\u003C/strong>\u003C/h4>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">If you take out a personal loan with a \u003C/span>fixed APR of 5%\u003Cspan style=\"font-weight: 400;\"> for five years, the APR and your monthly payments will remain at \u003C/span>5%\u003Cspan style=\"font-weight: 400;\"> for the entire loan term, regardless of any changes in economic conditions or market interest rates.\u003C/span>\u003C/p>\r\n\u003Ch4>\u003Cstrong>Pros of Fixed APR:\u003C/strong>\u003C/h4>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Predictability\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Easier to budget for payments.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Consistency\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Your rate won’t increase over time.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Less Risk\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: You're not affected by fluctuating interest rates.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Ch4>\u003Cstrong>Cons of Fixed APR:\u003C/strong>\u003C/h4>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Higher initial rates\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Fixed APRs may be higher than the starting rates of variable APRs because they provide long-term stability.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Ch3>\u003Cstrong>Variable APR\u003C/strong>\u003C/h3>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">A \u003C/span>variable APR\u003Cspan style=\"font-weight: 400;\"> means that the interest rate can change over time based on fluctuations in an underlying index, usually referred to as the \u003C/span>prime rate\u003Cspan style=\"font-weight: 400;\">. Lenders typically add a margin to the index rate to determine the total APR. When the index rate changes, your APR can either increase or decrease accordingly.\u003C/span>\u003C/p>\r\n\u003Ch4>\u003Cstrong>Key Characteristics of Variable APR:\u003C/strong>\u003C/h4>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Fluctuation\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: The APR changes periodically based on movements in the benchmark rate.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Lower initial rates\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Variable APRs often start lower than fixed APRs, but they can rise over time.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Risk of rate increases\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: If the benchmark rate rises, so does your APR, which can result in higher interest payments.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Ch4>\u003Cstrong>Common Uses of Variable APR:\u003C/strong>\u003C/h4>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Credit cards\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Many credit card companies have variable APRs tied to an index like the prime rate.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Adjustable-rate mortgages (ARMs)\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: These mortgages start with a fixed rate for a set period (e.g., five years) and then switch to a variable rate.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Lines of credit\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Home equity lines of credit (HELOCs) and other revolving credit lines often have variable APRs.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Ch4>\u003Cstrong>Example of Variable APR:\u003C/strong>\u003C/h4>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Suppose you have a credit card with a \u003C/span>variable APR of 14%\u003Cspan style=\"font-weight: 400;\"> based on the prime rate plus a 10% margin. If the prime rate rises by 0.5%, your APR would increase to \u003C/span>14.5%\u003Cspan style=\"font-weight: 400;\">, and you would pay more in interest.\u003C/span>\u003C/p>\r\n\u003Ch4>\u003Cstrong>Pros of Variable APR:\u003C/strong>\u003C/h4>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Potential for lower costs\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: If the index rate drops, your APR will decrease, reducing your interest payments.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Lower starting rates\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Variable APRs often have lower initial rates compared to fixed APRs.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Ch4>\u003Cstrong>Cons of Variable APR:\u003C/strong>\u003C/h4>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Unpredictability\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Payments can fluctuate, making it harder to budget for monthly expenses.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Risk of rate hikes\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: If interest rates rise, your APR can increase significantly, leading to higher payments.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Ch2>\u003Cstrong>Interest Rate vs APR Example\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Let’s look at an example to better understand the difference between interest rate and APR.\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Imagine you're looking to borrow $10,000 for a car loan. Two lenders offer the following terms for 2 years:\u003C/span>\u003C/p>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Lender A\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> offers a 4% interest rate with no additional fees.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Lender B\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> offers a 3.5% interest rate but charges $300 in loan origination fees.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>Lender A\u003C/strong>\u003Cspan style=\"font-weight: 400;\">:\u003C/span>\u003C/p>\r\n\u003Cul>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">Loan amount: $10,000\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">Interest rate: 4%\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">No additional fees\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003C/ul>\r\n\u003Cul>\r\n\u003Cli aria-level=\"1\">\u003Cstrong>APR = 4%\u003C/strong>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>Lender B\u003C/strong>\u003Cspan style=\"font-weight: 400;\">:\u003C/span>\u003C/p>\r\n\u003Cul>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">Loan amount: $10,000\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">Interest rate: 3.5%\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">Origination fee: $300\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">APR = ((Interest + Fees / Loan amount) / Number of days in loan term)) x 365 x 100\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">To find the total Interest amount you can use this formula: Loan amount x Interest rate x time period = 10,000 x 0.035 x 2 = 700\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cspan style=\"font-weight: 400;\">So APR = ((700 + 300 / 10,000) / 730)) x 365 x 100 = 5\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003C/ul>\r\n\u003Cul>\r\n\u003Cli aria-level=\"1\">\u003Cstrong>The APR for this loan is 5%\u003C/strong>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">In this case, \u003C/span>Lender B\u003Cspan style=\"font-weight: 400;\"> has a lower interest rate but a higher APR because of the additional fees. This illustrates why APR is a more accurate representation of the total cost of the loan.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>APR Meaning for Credit Cards\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">APR is especially important in the world of credit cards. When you use a credit card, you're essentially borrowing money from the card issuer, and the APR is the cost you pay for that borrowing.\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Credit card APRs typically apply to:\u003C/span>\u003C/p>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Purchases\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: The APR applied to any balance you carry from your purchases if you do not pay off your balance in full by the due date.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Balance Transfers\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: The APR applied to balances moved from one card to another.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Cash Advances\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: The APR charged when you withdraw cash using your credit card. This APR is typically higher than the purchase APR and starts accruing interest immediately.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Penalty APR\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: A higher APR charged if you miss payments or violate the terms of your credit card agreement.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">The APR on credit cards is usually variable, meaning it can change based on factors like the \u003C/span>prime rate\u003Cspan style=\"font-weight: 400;\"> or economic conditions. It's also important to note that credit card APRs can vary widely depending on your creditworthiness, so people with better credit scores will generally be offered lower APRs.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>What is a Good APR for a Car Loan?\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">When it comes to car loans, a good APR varies depending on several factors, including the borrower’s credit score, the loan term, and current market conditions. If you have excellent credit, you may qualify for promotional car loan APRs, which can be as low as 0% on a new car loan. These promotions are often offered by car manufacturers to entice buyers during sales events. Available car loan interest rates also depend on whether or not the loan is for a new or used car. Typically a new car loan will have a lower APR than a used car loan. \u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Your \u003C/span>credit score\u003Cspan style=\"font-weight: 400;\"> plays a significant role in determining the \u003C/span>Annual Percentage Rate (APR)\u003Cspan style=\"font-weight: 400;\"> offered by lenders for loans, credit cards, mortgages, and other types of credit. Here’s how your credit score impacts APR:\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">With Canada Drives you can quickly see what car loan pre-approval options you qualify for. It takes less than 3 minutes to complete the \u003C/span>\u003Ca href=\"https://apply.canadadrives.ca/\">\u003Cspan style=\"font-weight: 400;\">simple online application\u003C/span>\u003C/a>\u003Cspan style=\"font-weight: 400;\">, and there is no obligation to purchase a vehicle if you change your mind.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>How does your credit score impact APR?\u003C/strong>\u003C/h2>\r\n\u003Ch3>\u003Cstrong>Higher Credit Scores Lead to Lower APRs\u003C/strong>\u003C/h3>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">When you have a higher credit score (good credit or “prime”)\u003C/span> \u003Cspan style=\"font-weight: 400;\">, lenders view you as a \u003C/span>lower-risk borrower\u003Cspan style=\"font-weight: 400;\">. This means you are more likely to pay back the loan on time, with minimal risk of defaulting. As a result, most lenders offer \u003C/span>lower APRs\u003Cspan style=\"font-weight: 400;\"> and special loan offers to individuals with strong credit scores. Lower APRs mean you pay less in interest and fees over time, making borrowing more affordable.\u003C/span>\u003C/p>\r\n\u003Ch3>\u003Cstrong>Lower Credit Scores Lead to Higher APRs\u003C/strong>\u003C/h3>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Conversely, a lower credit score (bad credit, poor credit, or “subprime”) signals to lenders that you are a \u003C/span>higher-risk borrower\u003Cspan style=\"font-weight: 400;\">, meaning there's a greater chance that you may miss payments or default on the loan. To compensate for this increased risk, most lenders charge \u003C/span>higher APRs if you have poor credit\u003Cspan style=\"font-weight: 400;\">. This allows them to make more money in interest to offset the potential risk of lending to you.\u003C/span>\u003C/p>\r\n\u003Ch3>\u003Cstrong>Improving Your Credit Score to Lower APR\u003C/strong>\u003C/h3>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">If you improve your credit score, you can often qualify for lower APRs in the future, which will help you qualify for lower monthly payments on various loan products. Here are the basic ways to improve your credit score:\u003C/span>\u003C/p>\r\n\u003Cul>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Paying off debt\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Reducing your overall debt, particularly on credit cards, can improve your credit score and lead to better APR offers.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Making on-time payments\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Consistently paying your bills on time builds your credit and shows lenders that you're a responsible borrower, reducing your risk profile and lowering your APR.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Keeping credit utilization low\u003C/strong>\u003Cspan style=\"font-weight: 400;\">: Keeping your credit card balances low relative to your credit limit (under 30%) can improve your score and result in better APR offers when applying for loans or new credit cards.\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>For more information about how credit scores work, and how you can improve your credit score visit these articles below:\u003C/strong>\u003C/p>\r\n\u003Cp>\u003Ca href=\"https://www.canadadrives.ca/blog/credit/free-credit-score-vs-credit-report\">\u003Cstrong>How to Check & Monitor Your Credit for Free in Canada\u003C/strong>\u003C/a>\u003C/p>\r\n\u003Cp>\u003Ca href=\"https://www.canadadrives.ca/blog/credit/how-long-does-it-take-to-improve-your-credit-score\">\u003Cstrong>How Long Does it Take to Improve Your Credit Score?\u003C/strong>\u003C/a>\u003C/p>\r\n\u003Cp>\u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/5-factors-that-impact-your-credit-score-in-canada\">\u003Cstrong>5 Factors that Impact Your Credit Score in Canada\u003C/strong>\u003C/a>\u003C/p>\r\n\u003Cp>\u003Ca href=\"https://www.canadadrives.ca/blog/credit/what-is-a-good-credit-score\">\u003Cstrong>What Is a Good Credit Score? (and How Can I Get One?)\u003C/strong>\u003C/a>\u003C/p>\r\n\u003Ch2>\u003Cstrong>What Does 7.99% APR Mean?\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">When you see an APR of 7.99%, this means that over the course of a year, you will pay an amount equivalent to 7.99% of the loan or balance amount in interest and fees.\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">For example, if you borrow $10,000 at an APR of 7.99%, over a year, you could expect to pay approximately $799. This is a simplified example, as APR is spread out over monthly payments, but it gives a general sense of the cost.\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">When shopping for loans, understanding your APR helps you compare the true cost across different lenders, as they may offer similar interest rates but differ significantly when fees and other charges are included.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>Conclusion\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">APR is a critical factor to consider when borrowing money, whether it's for a car loan, personal loan, mortgage, or credit card. While interest rates can tell you part of the story, APR provides a fuller picture of the cost of borrowing by including additional fees and charges. This makes APR one of the most reliable metrics for comparing different financial products.\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">When evaluating loan options, it’s essential to pay attention to both the \u003C/span>interest rate\u003Cspan style=\"font-weight: 400;\"> and \u003C/span>APR\u003Cspan style=\"font-weight: 400;\"> to ensure you're making an informed decision. Comparing loan options and comparing APRS is a smart move. Making the right decision could save you hundreds, if not thousands of dollars. \u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">For credit cards, understanding your APR can help you manage debt responsibly, while for loans, a favourable APR can save you thousands of dollars over time. Ultimately, APR serves as a powerful tool to navigate the complexities of borrowing and to achieve better financial outcomes.\u003C/span>\u003C/p>","2024-09-06","/uploads/2024/9/66db7ac6a32ee.jpg","/uploads/2024/9/66db7ac76f1a4.jpg","/uploads/2024/9/66db7ac7a6afc.jpg","/uploads/2024/9/66db7ac7e7692.jpg","APR?","Understanding APR Financing: A Comprehensive Guide | Canada Drives","Annual Percentage Rate (APR) is a measure of the cost of borrowing money. We discuss how understanding APR can help you make better financial decisions.","2024-09-06 14:57:28","2024-09-06 15:05:07","Sep 6, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/9/66db7ac7e7692.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/9/66db7ac7a6afc.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/9/66db7ac6a32ee.jpg",{"id":133,"testimonial_id":13,"score":13,"url":134,"title":135,"quote":136,"body":137,"amp_body":13,"amp_verified":13,"publish_at":138,"img_thumb":139,"img_small":140,"img_medium":141,"img_large":142,"alt_text":143,"image_source":81,"seo_title":144,"seo_description":145,"seo_keywords":84,"type_id":6,"category_id":17,"user_id":106,"author":106,"deleted_at":13,"created_at":146,"updated_at":147,"category_url":20,"category_name":18,"publish_date":148,"img_large_src":149,"img_medium_src":150,"img_thumb_src":151},1856,"what-is-a-lien-on-a-vehicle","What Is a Lien on a Vehicle?","A lien registered on a vehicle is a legal claim or right that a creditor, usually a financial institution, holds against a vehicle as collateral for a loan or debt. When a car buyer finances a vehicle purchase, the lender places a lien on the car until the loan is fully paid off. \r\n","\u003Cp>\u003Cspan style=\"font-weight: 400;\">This lien ensures that the lender can repossess the vehicle if the borrower defaults on the loan terms (fails to pay the car loan bill). Understanding vehicle liens is crucial for anyone involved in buying or selling a used car, especially in Canada, where regulations can vary significantly by province or territory.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>Bought a Car with a Lien on It in Canada - What Happens Now?\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">If you discover that you've bought a used vehicle with a lien on it in Canada, it's important to take immediate action to address the situation. The lien represents an outstanding debt that you could be responsible for if not resolved, meaning you could be responsible for the money owed on the outstanding lien! Here’s what typically happens and what steps you should take:\u003C/span>\u003C/p>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Contact the Seller:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Reach out to the seller to discuss the lien. If the seller is a dealership, they should resolve the lien as part of the sale agreement. If it's a private seller, request that they pay off the debt immediately to remove the car lien..\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Verify the Lien:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Obtain the lender’s contact information and verify the outstanding amount. Ensure you have all the details about the lien, including how much is owed and the loan terms.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Negotiate:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> If the seller refuses to pay off the lien, you may need to negotiate a reduction in the purchase price equivalent to the lien amount or return the vehicle for a full refund.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Legal Action:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> If the seller was aware of the lien and did not disclose it, you could consider legal action for misrepresentation or fraud. When selling cars privately the seller should always disclose a car lien. \u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Pay Off the Lien:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> If no resolution is possible with the seller, you might have to pay off the lien yourself to clear the vehicle title. This step is crucial for car buyers wanting to ensure a lien-free vehicle.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Ch2>\u003Cstrong>How to Put a Lien on a Vehicle by Province\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">The process of placing a lien on a vehicle in Canada varies by province. Generally, it involves the lender registering the lien with the provincial body that governs transportation and vehicle registration or the Personal Property Registry.\u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Each province or territory has specific procedures and fees for registering a lien, and lenders must comply with these regulations to ensure their claim is legally binding.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>Someone Sold Me a Car with a Lien on It Without Telling Me\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">If you bought a car with an existing lien that the seller did not disclose, you could face significant legal and financial challenges. Here's what you can do:\u003C/span>\u003C/p>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Contact the Seller:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Immediately reach out to the seller and demand they pay off the lien. If the seller refuses or cannot be reached, document all your communications for potential legal action.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Legal Recourse:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Consider filing a lawsuit against the seller for failing to disclose the lien. You may be able to recover the amount you paid for the vehicle or force the seller to pay off the lien.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Lien Holder:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Contact the lien holder to explain the situation. They may provide options for resolving the lien, although you might still be responsible for paying it off to clear the vehicle title.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Check Provincial Laws:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Some provinces have consumer protection laws that might offer additional recourse in cases of undisclosed liens.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">To avoid such situations, always check the lien status of a vehicle before purchasing, especially from a private seller.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>Can Someone Put a Lien on My Car Without Me Knowing?\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">In most cases, a lien cannot be placed on your vehicle without your knowledge, as it involves a formal process where the vehicle owner usually grants consent to the lien as security for a debt. However, there are exceptions:\u003C/span>\u003C/p>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Statutory Liens:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> These can be placed without your explicit consent, typically for unpaid taxes or fines. Government agencies have the authority to impose such liens. If you hear someone mention a tax lien this is a type of statutory lien. \u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Mechanic’s Liens:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> If you fail to pay for repairs or services on your vehicle, a mechanic or service provider may place a lien on your car for the unpaid bills.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Unpaid Debts:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Creditors may obtain a court judgment against you and place a lien on your vehicle to secure payment of unpaid debt.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">If you discover an unexpected lien on your vehicle, contact the lien holder or registering agent to understand the nature of the lien and the debt it secures.\u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>Is It Illegal to Sell a Car with a Lien on It in Canada?\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Selling a car with a lien on it is not illegal in Canada, but the seller is legally required to disclose the existence of the lien to the buyer. Failure to do so can result in legal consequences for the seller and financial hardship for the buyer. Here’s what you need to know:\u003C/span>\u003C/p>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Disclosure:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Sellers must inform potential buyers of any existing liens on the vehicle. This transparency allows buyers to make informed decisions and negotiate accordingly.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Clear Title:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> It is common practice to clear the lien before transferring ownership. The seller can use the sale proceeds to pay off the lien, ensuring the buyer / new owner receives a free and clean title.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Legal Consequences:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> If a seller fails to disclose a lien, the buyer may have grounds for legal action based on misrepresentation or fraud.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Buyer’s Responsibility:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Buyers should perform due diligence by checking the lien status through a vehicle history report or provincial registry before completing the purchase.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Ch2>\u003Cstrong>How Do You Check if a Vehicle Has a Lien on It in Canada?\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">To check if a vehicle has a lien on it in Canada, you can use several resources:\u003C/span>\u003C/p>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Carfax Canada:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Provides a comprehensive vehicle history report that includes lien information. You can use the vehicle identification number (VIN) to obtain this report. This is particularly useful for used car buyers to ensure they are not inheriting someone else's debt.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Provincial Online Services:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Most provinces offer online services where you can check lien status using the VIN. These services are typically available through the provincial transportation or registry office websites.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Service Providers:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Companies that specialize in vehicle history and lien searches can provide this information for a fee.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Provincial Registry:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> You can contact the provincial registry office directly to inquire about the lien status of a vehicle. This may require a fee and specific forms.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Ensuring a vehicle is lien-free before purchase is crucial to avoid inheriting someone else's debt. You can visit the canada.ca website to check for car liens in your province or territory \u003Ca href=\"https://www.canada.ca/en/financial-consumer-agency/services/loans/financing-car/risks-car-liens.html\" target=\"_blank\" rel=\"noopener\">here\u003C/a>. \u003C/span>\u003C/p>\r\n\u003Ch2>\u003Cstrong>How to Remove a Lien on a Car in Canada\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Removing a lien on a car typically involves paying off the outstanding debt. Once the debt is cleared, the lender should provide a lien release document, which you then submit to the provincial body that manages vehicle registrations to update the vehicle's title to a lien-free status. Here’s a general outline of the process:\u003C/span>\u003C/p>\r\n\u003Col>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Pay Off the Debt:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Clear any outstanding loan or debt secured by the lien. Contact the lender to obtain the exact payoff amount and ensure the debt is fully satisfied.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Obtain Lien Release:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Get a lien release form or document from the lender. This document confirms that the debt has been paid and the lien can be removed.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Submit Documentation:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Provide the lien release to the appropriate provincial registry to update the car title. This may involve submitting forms and paying a fee.\u003C/span>\u003C/li>\r\n\u003Cli style=\"font-weight: 400;\" aria-level=\"1\">\u003Cstrong>Update Title:\u003C/strong>\u003Cspan style=\"font-weight: 400;\"> Once the lien is removed, the registry will update the vehicle’s title to reflect its lien-free status.\u003C/span>\u003C/li>\r\n\u003C/ol>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">It’s important to keep records of all transactions and communications during this process to avoid any future disputes.\u003C/span>\u003C/p>\r\n\u003Cp> \u003C/p>\r\n\u003Ch2>\u003Cstrong>Shop with confidence with a pre-approved car loan from Canada Drives:\u003C/strong>\u003C/h2>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">If the idea of potentially getting stuck with a vehicle that has a lien on it sounds like too big of a risk you can avoid the issue altogether by purchasing a car through Canada Drives. \u003C/span>\u003C/p>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Canada Drives has built a nationwide network of reputable new and used car dealerships who carry a wide variety of quality vehicles. Complete the simple \u003C/span>\u003Ca href=\"https://apply.canadadrives.ca/\">\u003Cspan style=\"font-weight: 400;\">pre-approval form\u003C/span>\u003C/a>\u003Cspan style=\"font-weight: 400;\"> online in minutes and you’ll get connected with a local dealership in your area who will show you all the vehicles you qualify for. All you have to do is pick the one you want and drive away! No stress. No worrying about potential liens! \u003C/span>\u003C/p>","2024-08-14","/uploads/2024/8/66bd15aa8780a.jpg","/uploads/2024/8/66bd15ab6de96.jpg","/uploads/2024/8/66bd15abba4ad.jpg","/uploads/2024/8/66bd15ac14370.jpg","Car being towed by a tow truck","What Is a Lien on a Vehicle? | Canada Drives","We explain vehicle liens in Canada, what they are, and what to do if you discover that a car you just bought has a lien on it.","2024-08-14 13:38:04","2024-08-14 13:45:47","Aug 14, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/8/66bd15ac14370.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/8/66bd15abba4ad.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/8/66bd15aa8780a.jpg",{"id":153,"testimonial_id":13,"score":13,"url":154,"title":155,"quote":156,"body":157,"amp_body":13,"amp_verified":13,"publish_at":158,"img_thumb":159,"img_small":160,"img_medium":161,"img_large":162,"alt_text":163,"image_source":81,"seo_title":164,"seo_description":165,"seo_keywords":84,"type_id":6,"category_id":17,"user_id":6,"author":6,"deleted_at":13,"created_at":166,"updated_at":167,"category_url":20,"category_name":18,"publish_date":168,"img_large_src":169,"img_medium_src":170,"img_thumb_src":171},546,"car-leasing-canada-guide","How To Lease a Car: Car Leasing in Canada Explained","Leasing a car can be a great alternative to other financing options if you’re not quite ready to buy. It essentially allows you to borrow a vehicle for a short-fixed duration with lower monthly and down payment costs. To avoid spending more money in the long run, it’s important to do your research and pay attention to the fine print. To help you out, we’ve compiled a guide outlining the disadvantages and benefits of leasing a car, as well as the best leasing options that will help you save money on your next vehicle. ","\u003Ch2>What is a car lease?\u003C/h2>\r\n\u003Cp>A car lease allows you to drive a brand new vehicle for a fixed period at an agreed monthly rate. Leasing doesn’t require a car loan approval or a hefty payment up front, but unlike typical financing plans, monthly lease payments go toward the \u003Cem>use\u003C/em> of the vehicle instead of the \u003Cem>ownership\u003C/em> of the vehicle. In other words, it’s essentially a long-term rental, and once the fixed lease period is over (typically between 2 to 4 years), then the customer must either return the car to the leasing company or purchase it for market value.\u003C/p>\r\n\u003Cp>Leasing a car requires a down payment and monthly payments consisting of rental charges, interest, taxes, and the depreciation costs of the vehicle over time. The interest rate and fees can vary based on the vehicle you are leasing.\u003C/p>\r\n\u003Cdiv class=\"block-quote\">\r\n\u003Ch2>Related articles\u003C/h2>\r\n\u003Cul>\r\n\u003Cli>\u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/leasing-vs-buying-what-is-best-for-you\" target=\"_blank\" rel=\"noopener\">Leasing vs. Buying: What Is Best for You?\u003C/a>\u003C/li>\r\n\u003Cli>\u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/getting-out-of-your-car-loan\" target=\"_blank\" rel=\"noopener\">How to Get Out of Your Car Loan\u003C/a>\u003C/li>\r\n\u003Cli>\u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/trading-in-a-vehicle-that-isn-t-paid-off\" target=\"_blank\" rel=\"noopener\">How to Trade in a Car (Even If It Isn't Paid Off Yet)\u003C/a>\u003C/li>\r\n\u003C/ul>\r\n\u003C/div>\r\n\u003Ch2>The pros and cons of leasing a car:\u003C/h2>\r\n\u003Ch2>\u003Cstrong>Benefits of leasing a car\u003C/strong>\u003C/h2>\r\n\u003Cp>There are plenty of benefits to leasing a new car, the main one being lower payments. The reason leasing a vehicle is beneficial is that you only pay for the depreciation of the car. Leasing is also a great option if you’re someone who struggles with commitment issues and can’t decide on a vehicle model? Or what interior to choose? A typical car lease contract only lasts 2 to 4 years and spans the early, problem-free days of a vehicle.\u003C/p>\r\n\u003Cp>Once the contract is over, you can trade in your car for an upgraded model, a new colour, or a different vehicle entirely! This comes with the added perk of always being up to date on car manufacturers’ latest features and technologies while driving a brand new car more frequently, and this gives you a shot at a fresh \u003Cspan style=\"font-weight: 400;\">manufacturer's warranty\u003C/span> every few years, which may even include \u003Cspan style=\"font-weight: 400;\">free maintenance such as\u003C/span> oil changes and servicing.\u003C/p>\r\n\u003Cp>So long as you can drive within the mileage cap outlined in your contract and avoid any major wear and tear damages to the car, you shouldn’t incur any additional fees outside of your monthly payment, regardless of the vehicle you choose.\u003C/p>\r\n\u003Ch2>\u003Cstrong>Disadvantages of leasing a car\u003C/strong>\u003C/h2>\r\n\u003Cp>Before getting too excited about the low-cost, low-commitment pros of leasing a car, it’s important to understand the cons as well. The obvious downside to leasing a car is the fact that, despite making monthly payments, you never actually own the car that you’re driving. Once the lease term ends, you’re required to return the vehicle and restart the process from scratch, with no equity to use toward the purchase of your next ride. This is the key difference between leasing and buying (or financing) a car.\u003C/p>\r\n\u003Cp>While it may be tempting to jump on an apparently low price tag at first, be careful because, in the long run, it could actually cost you more. It’s easy to get carried away in the cycle of upgrading your vehicle every 2 to 4 years, but repeatedly leasing cars over time will actually carve a deeper hole in your pocket than a one-time car purchase would, and in the end, you’ll have no vehicle to truly call your own.\u003C/p>\r\n\u003Cp>Another aspect to carefully consider is the vehicle lease contract. Every car lease contract is embedded with rather restrictive guidelines, and if you fail to follow them, you could face costly penalty fees. These guidelines may include a mileage cap, as mentioned above, which restricts you to an annual kilometre limit (typically around 25,000 km/ year) that you’re expected to stay below. If you have a long commute to work or plan on making a few road trips, then you could face steep charges at the end of your lease term. For many Canadian drivers living in rural communities this kilometre limit is a deal breaker.\u003C/p>\r\n\u003Cp>You can also expect to be charged penalty fees for dings, damages and considerable wear to the vehicle’s interior, exterior or drive performance at the lease end, whether the lease expires or you end the lease early. And, should you \u003Cem>really\u003C/em> have commitment issues and want to quit your contract before the term’s end date, be prepared to fork over whatever cash amount remains on your lease, which could be upwards of a few thousand dollars. Although seldom discussed, these additional charges are always outlined in the contract, so be sure to read it thoroughly and pay close attention to the details!\u003C/p>\r\n\u003Ch2>Who pays for insurance on a leased vehicle?\u003C/h2>\r\n\u003Cp>When you lease a car in Canada, you are responsible for paying the insurance premiums, just as you would if you were financing or owning a car outright. However, leasing companies typically have specific insurance coverage requirements, which usually include:\u003C/p>\r\n\u003Cp>\u003Cstrong>Liability Coverage:\u003C/strong> This covers bodily injury and property damage to others if you are at fault in an accident. Minimum limits are typically higher for leased vehicles.\u003Cbr />\u003Cbr />\u003Cstrong>Collision Coverage:\u003C/strong> This covers damage to your leased vehicle resulting from a collision, regardless of who is at fault.\u003Cbr />\u003Cbr />\u003Cstrong>Comprehensive Coverage:\u003C/strong> This covers damage to your leased vehicle from non-collision events such as theft, vandalism, fire, or natural disasters.\u003Cbr />\u003Cbr />\u003Cstrong>Gap Insurance:\u003C/strong> Some leasing companies may require or recommend gap insurance. Gap insurance covers the difference between the actual cash value of the vehicle and the remaining lease balance if the car is totaled or stolen.\u003Cbr />\u003Cbr />Insurance premiums for leased vehicles can be higher compared to those for financed or owned vehicles because of the higher coverage limits required.\u003C/p>\r\n\u003Cp>It’s crucial to maintain the required insurance coverage for the duration of the lease term. Failing to do so can result in penalties, additional charges, or even termination of the lease agreement by the leasing company. \u003C/p>\r\n\u003Ch2>Can you return a leased car early?\u003C/h2>\r\n\u003Cp>Yes, you can return a leased car early in Canada, but it often comes with additional costs and considerations. Here's what you need to know:\u003C/p>\r\n\u003Cp>\u003Cstrong>Early Termination Fees\u003C/strong>\u003Cbr />Most lease agreements include penalties for early termination. These fees can be substantial and might include:\u003C/p>\r\n\u003Cul>\r\n\u003Cli>Remaining lease payments\u003C/li>\r\n\u003Cli>Early lease termination fees\u003C/li>\r\n\u003Cli>Depreciation costs\u003C/li>\r\n\u003Cli>Lease-end fees such as a \u003Cspan style=\"font-weight: 400;\">lease disposition fee\u003C/span>\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>Negative Equity\u003C/strong>\u003Cbr />If the car's current market value is less than the remaining lease obligations, you may have to pay the difference, known as negative equity.\u003C/p>\r\n\u003Cp>\u003Cstrong>Lease Buyout\u003C/strong>\u003Cbr />Some lease companies allow you to buy out the lease early. This involves paying the remaining lease balance plus any early termination fees. You can then sell the car to recoup some costs, but this depends on the car’s market value.\u003C/p>\r\n\u003Cp>\u003Cstrong>Lease Transfer\u003C/strong>\u003Cbr />In some cases, you can transfer the lease to another person through a lease transfer or lease assumption. However, there may be fees associated with this transfer, and the new lessee must be approved by the lease company.\u003C/p>\r\n\u003Cp>\u003Cstrong>Trade-In\u003C/strong>\u003Cbr />Another option is to trade in the leased car when you buy or lease a new vehicle from the same dealership. The dealer might roll the remaining lease balance into the new lease or loan, but this could result in higher monthly payments.\u003C/p>\r\n\u003Ch2>Steps to return a leased car early:\u003C/h2>\r\n\u003Col>\r\n\u003Cli>\u003Cstrong>Review your lease agreement:\u003C/strong> Understand the terms, fees, and penalties for early termination.\u003C/li>\r\n\u003Cli>\u003Cstrong>Contact your leasing company:\u003C/strong> Inform them of your intention to return the car early and inquire about the specific costs involved.\u003C/li>\r\n\u003Cli>\u003Cstrong>Evaluate your options:\u003C/strong> Consider whether buying out the lease, transferring it, or trading it in makes the most financial sense.\u003C/li>\r\n\u003Cli>\u003Cstrong>Prepare the car for return:\u003C/strong> Ensure the car is in good condition to avoid additional charges for excessive wear and tear.\u003C/li>\r\n\u003Cli>\u003Cstrong>Complete the paperwork:\u003C/strong> Follow the leasing company’s process for early termination, including signing any necessary documents and paying fees.\u003C/li>\r\n\u003C/ol>\r\n\u003Cp>\u003Cstrong>Considerations\u003C/strong>\u003C/p>\r\n\u003Cul>\r\n\u003Cli>\u003Cstrong>Financial impact:\u003C/strong> Early termination can be costly. Calculate the total expenses to ensure you’re making a financially sound decision.\u003C/li>\r\n\u003Cli>\u003Cstrong>Market value:\u003C/strong> Check the car’s market value to determine if buying out the lease and selling the car privately might be a better option.\u003C/li>\r\n\u003Cli>\u003Cstrong>Credit impact:\u003C/strong> Defaulting on lease payments or returning the car without proper settlement can negatively impact your credit score.\u003C/li>\r\n\u003C/ul>\r\n\u003Ch2>Buying out a car lease in Canada\u003C/h2>\r\n\u003Cp>Buying out a car lease in Canada involves purchasing the leased vehicle either at the end of the lease term or, in some cases, before the lease term ends. Here’s a detailed guide on how the process works:\u003C/p>\r\n\u003Cp>\u003Cstrong>1. Review your lease agreement\u003C/strong>\u003Cbr />Check your current lease agreement for the buyout terms, including the residual value (the car's estimated value at the end of the lease). This is the amount you’ll pay to buy the car.\u003C/p>\r\n\u003Cp>\u003Cstrong>2. Determine the buyout timing\u003C/strong>\u003C/p>\r\n\u003Cul>\r\n\u003Cli>End-of-Lease Buyout: This occurs at the end of your lease term, where you pay the residual value plus any applicable fees.\u003C/li>\r\n\u003Cli>Early Buyout: You can choose to buy the car before the lease term ends. This involves paying the remaining lease payments, the residual value, and possibly an early termination fee.\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>3. Evaluate the car’s market value\u003C/strong>\u003Cbr />Compare the residual value with the car’s current market value. If the residual value is lower or comparable to the market value, buying out the lease could be a good financial decision.\u003C/p>\r\n\u003Cp>\u003Cstrong>4. Arrange financing\u003C/strong>\u003Cbr />If you don’t have the cash to buy the vehicle outright, you’ll need to arrange financing. You can: Apply for a car loan from a bank or credit union or you can check if the leasing company offers financing options for the buyout.\u003C/p>\r\n\u003Cp>\u003Cstrong>5. Notify the leasing company\u003C/strong>\u003Cbr />Inform the leasing company of your intention to buy out the lease. They will provide you with the necessary paperwork and the final buyout amount, which may include taxes and fees.\u003C/p>\r\n\u003Cp>\u003Cstrong>6. Complete the paperwork\u003C/strong>\u003Cbr />Fill out and submit all required paperwork, which may include: Buyout form provided by the leasing company and loan documents if you are financing the buyout.\u003Cbr />\u003Cbr />\u003Cstrong>7. Make the payment\u003C/strong>\u003Cbr />Pay the buyout amount as specified by the leasing company. This can be done through: A lump-sum payment if you’re paying in cash or financing through a loan if you’ve arranged one.\u003Cbr />\u003Cbr />\u003Cstrong>8. Transfer ownership\u003C/strong>\u003Cbr />Once the payment is processed, the leasing company will transfer the title and ownership of the car to you. Make sure you receive all necessary documents, including: The vehicle title, bill of sale and lien release, if applicable.\u003Cbr />\u003Cbr />\u003Cstrong>9. Register the car\u003C/strong>\u003Cbr />Visit your local provincial or territorial licensing office to register the car in your name. You’ll need to provide:\u003C/p>\r\n\u003Cul>\r\n\u003Cli>Proof of purchase.\u003C/li>\r\n\u003Cli>Proof of insurance.\u003C/li>\r\n\u003Cli>Completed transfer of ownership documents.\u003C/li>\r\n\u003Cli>Pay any applicable registration fees.\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>Considerations\u003C/strong>\u003C/p>\r\n\u003Cul>\r\n\u003Cli>Car Condition: Ensure the car is in good condition, as any excessive wear and tear could affect the buyout decision.\u003C/li>\r\n\u003Cli>Warranty: Check if the car is still under warranty or consider purchasing an extended warranty.\u003C/li>\r\n\u003Cli>Financial Impact: Ensure the buyout and any associated costs fit within your budget and financial plans.\u003C/li>\r\n\u003Cli>Future Maintenance: Consider potential maintenance and repair costs as the car ages.\u003C/li>\r\n\u003C/ul>\r\n\u003Cp>\u003Cstrong>Benefits of buying out a lease\u003C/strong>\u003C/p>\r\n\u003Cul>\r\n\u003Cli>Ownership: You gain full ownership of the car.\u003C/li>\r\n\u003Cli>Avoid Fees: You avoid lease-end fees, such as excessive wear and tear charges or mileage overage fees.\u003C/li>\r\n\u003Cli>Familiarity: You already know the car’s history and condition.\u003C/li>\r\n\u003C/ul>\r\n\u003Ch2>Lease vs Finance \u003C/h2>\r\n\u003Cp>Below we examine the key differences between leasing and financing the same car as these are the two most popular methods of obtaining a new vehicle in Canada.\u003C/p>\r\n\u003Cp>\u003Cstrong>Ownership\u003C/strong>\u003C/p>\r\n\u003Cp>Lease: When you lease a new car, you’re essentially renting it for a set period (usually 2-3 years). At the end of the lease term, you return the car and can either lease a new vehicle or choose not to lease another car.\u003C/p>\r\n\u003Cp>Finance: When you finance a car, you’re taking out a loan to purchase it. Once you’ve paid off the loan, you own the car outright and can keep it as long as you want.\u003C/p>\r\n\u003Cp>\u003Cstrong>Payments\u003C/strong>\u003C/p>\r\n\u003Cp>Lease: Lease payments are typically lower monthly payments than loan payments because you're only paying for the car's depreciation during the lease term, not the full purchase price.\u003C/p>\r\n\u003Cp>Finance: Monthly loan payments are typically higher than lease payments because you’re paying off the entire purchase price of the car, plus interest.\u003C/p>\r\n\u003Cp>\u003Cstrong>Mileage Limits\u003C/strong>\u003C/p>\r\n\u003Cp>Lease: Leases often come with mileage limits, and exceeding these limits can result in additional fees.\u003C/p>\r\n\u003Cp>Finance: There are no mileage restrictions with financing, so you can drive as much as you want without worrying about penalties.\u003C/p>\r\n\u003Cp>\u003Cstrong>Maintenance\u003C/strong>\u003C/p>\r\n\u003Cp>Lease: Some leases include maintenance packages, which can help with regular upkeep costs.\u003C/p>\r\n\u003Cp>Finance: You’re responsible for all maintenance costs and repair costs once the car is out of warranty.\u003C/p>\r\n\u003Cp>\u003Cstrong>Customization\u003C/strong>\u003C/p>\r\n\u003Cp>Lease: Leasing usually doesn’t allow for modifications or customizations to the vehicle.\u003C/p>\r\n\u003Cp>Finance: You can customize or modify the car as you like.\u003C/p>\r\n\u003Cp>\u003Cstrong>Resale Value\u003C/strong>\u003C/p>\r\n\u003Cp>Lease: At the end of the lease you do not own the vehicle. In most cases you will have the option to buy out the car at the end of the lease. Your lease agreement will include the buyout terms, including the residual value, which is the car's estimated value at the end of the lease term. This is the amount you would pay to buy the car.\u003C/p>\r\n\u003Cp>Finance: When you finance a car, you have the option to sell it or trade it in later. You can also benefit from any resale value it may have.\u003C/p>\r\n\u003Cdiv class=\"block-quote\">\r\n\u003Ch2>Can I afford a car loan?\u003C/h2>\r\n\u003Cp>If you'd prefer to take ownership of your next car, an auto loan might be more affordable than you think. It takes seconds to see what your monthly payment could look like with our \u003Ca href=\"https://www.canadadrives.ca/car-loan-calculator/?utm_source=blog&utm_medium=car-leasing-canada-guide&utm_campaign=inline-link-car-loan-calculator\">car loan affordability calculator\u003C/a>.\u003C/p>\r\n\u003C/div>\r\n\u003Ch2>\u003Cstrong>Car leasing options\u003C/strong>\u003C/h2>\r\n\u003Cp>There are a few car leasing options in Canada, and depending on your personal needs and interests, one may be better suited than the others.\u003C/p>\r\n\u003Cul>\r\n\u003Cli>\u003Cstrong>Standard rental leases\u003C/strong> offer you the opportunity to drive brand new vehicles, so long as your credit profile is approved. You’ll be expected to make a small down payment, followed by monthly payments for the remainder of your car lease term. Once your lease term expires, you must return the car to the dealership, where you may choose to extend the lease or trade in your current car for a newer ride.\u003C/li>\r\n\u003C/ul>\r\n\u003Cul>\r\n\u003Cli>\u003Cstrong>Leasing to own\u003C/strong>, on the other hand, gives you the \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/car-lease-to-own\">option to purchase a vehicle once its lease term expires\u003C/a>. You’re required to make regular payments, often on a weekly or bi-weekly schedule, but rather than paying for the mere use of the vehicle, your payments will help you accumulate equity. This option is typically offered by smaller dealerships to customers with bad credit, as a credit check is often skipped over in the approval process. All a customer needs in hand is their proof of identity, residency or citizenship, proof of income, and occasionally proof of insurance. However, although the approval process is more lenient, you typically won’t have a roster of shiny, brand new vehicles to choose from, as you would in a standard car lease agreement.\u003C/li>\r\n\u003C/ul>\r\n\u003Cul>\r\n\u003Cli>\u003Cstrong>Lease takeovers\u003C/strong> can be a great opportunity to get a good deal on a lease \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/car-lease-takeover\">by taking over someone else's lease payments\u003C/a>. The upstart costs and fees are lower, and often there is a cash incentive to taking over someone’s lease. With that said, there are also some risks to taking over a lease, such as inheriting vehicle condition and mileage overages which may come as a surprise at the end of the lease if you don’t inspect the lease terms.\u003C/li>\r\n\u003C/ul>\r\n\u003Cul>\r\n\u003Cli>\u003Cstrong>Leasing a used car or certified pre owned\u003C/strong> \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/can-you-lease-a-used-car\" target=\"_blank\" rel=\"noopener\">is possible\u003C/a> and is often the case if you’re in a lease-to-own agreement. In other instances, a customer may wish to terminate their lease contract early and seek someone who would be willing to take over their payments. If that someone is you, then you could save money on down payment costs, but before you jump in the driver’s seat, be sure to thoroughly inspect the vehicle for any damage, wear, or kilometre overage, as you assume responsibility once you take over lease payments. And, while it may seem cheaper to go with a used car rather than a new one, you may end up incurring heavier costs for maintenance, as the warranty expires, and the car’s reliability decreases with age.\u003C/li>\r\n\u003C/ul>\r\n\u003Ch2>\u003Cstrong>Can you get a one-year car lease?\u003C/strong>\u003C/h2>\r\n\u003Cp>A short-term car lease is typically a minimum of two years. One-year leases are available but they’re rare. If you do find a dealership offering a one-year lease agreement, you’ll find that your monthly payment will be very high due to depreciation. However, you might be able to lease a used car and bypass high depreciation costs. Alternatives to one-year vehicle leases include long-term rentals and a lease takeover.\u003C/p>\r\n\u003Cp>Leasing a car lets you drive a brand new vehicle without the more expensive cost of purchasing one. Of course, car leases are appealing to many; who wouldn’t want to drive a high-end car without the big price?! If you’re one of the many interested individuals, you’ve already weighed the pros and cons and now you're wondering “how do you lease a car”?\u003C/p>\r\n\u003Ch2>How to lease a car in Canada in 9 steps\u003C/h2>\r\n\u003Cp>Leasing a car lets you drive a brand new vehicle without the more expensive cost of purchasing one. If you’re one of those interested individuals who has already weighed up the pros and cons and is now wondering “how do you lease a car”?\u003C/p>\r\n\u003Cp>If you're intent on leasing a car, these 9 steps will guide you through the process. In an ideal situation where you know exactly what you want, leasing a car can be done pretty quickly. For others, it may take up to a couple of weeks.\u003C/p>\r\n\u003Ch3>Check Your Credit Score\u003C/h3>\r\n\u003Cdiv id=\"credit-score\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9e25537ae.png\" alt=\"Credit Score Meter Icon\" width=\"200\" height=\"200\" align=\"middle\" />\r\n\u003Cp>Remember, you normally need an above-average credit score to get approved for a lease. According to Equifax, any score over 660 is considered good. If you’re not there yet and have poor credit or no credit at all, don’t worry! You can check your \u003Ca href=\"https://www.canadadrives.ca/blog/credit/free-credit-score-vs-credit-report\">credit score\u003C/a> for free, and there are things you can do to \u003Ca href=\"https://www.springfinancial.ca/blog/credit-tips/how-to-improve-your-credit-score\">improve your credit\u003C/a> too!\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Create a Budget\u003C/h3>\r\n\u003Cdiv id=\"budget\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9e3751ab0.png\" alt=\"Lease Budget Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>When leasing a vehicle, your monthly payment might be lower than if you finance, but you also need to consider a potential down payment, \u003Ca href=\"https://www.canadadrives.ca/blog/buying-a-vehicle/first-time-car-buyer-tips\">insurance, fuel, maintenance\u003C/a>, and more. It’s wise to sit down and crunch some numbers to make sure you know exactly what you can afford without feeling financially squeezed.\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Find the Right Car\u003C/h3>\r\n\u003Cdiv id=\"find\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9e547522d.png\" alt=\"Mobile Car Search Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Firstly, you need to decide what type of vehicle suits your needs! Maybe you need a big family car, or maybe you need a luxury model for business purposes? Obviously, the internet is a powerful research tool. Google Search and YouTube alone can help you narrow down your choices until you find “The One.”\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Find the Right Dealership\u003C/h3>\r\n\u003Cdiv id=\"dealer\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9e6a87719.png\" alt=\"Car Dealership Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Once you’ve chosen a car, it’s best to research different vendors and available offers. Understand all your options so you can \u003Ca href=\"https://www.canadadrives.ca/blog/car-guide/how-to-negotiate-with-a-car-dealer\">negotiate\u003C/a> and walk away from a deal if you don’t like what’s being offered.\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Book a Test Drive\u003C/h3>\r\n\u003Cdiv id=\"test-drive\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9e7ae8640.png\" alt=\"Test Drive Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Take the vehicle you are interested in out for a test drive so you can be sure it meets your requirements and is everything you expected it to be.\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Consider a Down Payment\u003C/h3>\r\n\u003Cdiv id=\"downpayment\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9e8ba2d1b.png\" alt=\"Downpayment Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Down payments are not entirely necessary for car leases but are helpful in some instances. For one, money down increases the likelihood of getting approved and reduces your monthly payments. If you don't have the savings to make a down payment, don't worry, a \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/0-down-car-lease\">0 down car lease\u003C/a> is possible. \u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Review Your Lease Agreement\u003C/h3>\r\n\u003Cdiv id=\"review\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9de8ef877.png\" alt=\"Lease Agreement Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Once you select a car and get approved for finance, you’ll want to examine your lease agreement closely. Take note of your monthly payment, down payment, length of the term, what maintenance you’re responsible for, and other fees. If you need to change anything at the last minute, you can discuss it with your dealer.\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Start Making Payments\u003C/h3>\r\n\u003Cdiv id=\"payments\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9ea7d7409.png\" alt=\"Car Payments Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Now that you have a leased car, drive off the lot and start making payments! If you don’t miss any payments, a lease can help boost your credit score!\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Ch3>Remember Routine Maintenance\u003C/h3>\r\n\u003Cdiv id=\"maintenance\" class=\"step\">\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667c9ebd65a41.png\" alt=\"Car Maintenance Icon\" width=\"200\" height=\"200\" />\r\n\u003Cp>Many people don’t need to be told to take care of their car, but it’s worth reiterating for a leased car. Any damage incurred or neglect could end up costing you at the end of the lease term.\u003C/p>\r\n\u003C/div>\r\n\u003Cp> \u003C/p>\r\n\u003Cdiv class=\"block-quote\">\r\n\u003Ch2>Get pre-approved today\u003C/h2>\r\n\u003Cp>If you're leaning towards financing a car instead of leasing, it takes two minutes to know if you're eligible for a car loan by getting pre-approved online. With a pre-approval you can shop with confidence knowing exactly what you can afford.\u003C/p>\r\n\u003Cp>\u003Ca href=\"https://apply.canadadrives.ca/\">Get pre-approved today.\u003C/a>\u003C/p>\r\n\u003C/div>","2024-07-24","/uploads/2022/5/6282de82bfb6c.jpg","/uploads/2022/5/6282de83608fe.jpg","/uploads/2022/5/6282de8389f02.jpg","/uploads/2022/5/6282de83cdae4.jpg","Car Leasing Canada","How To Lease a Car: Car Leasing in Canada Explained | Canada Drives","Everything you wanted to know about leasing a car in Canada—simplified! Find out if it’s the best option for you & how to get the best deal…","2018-11-22 00:18:15","2024-07-24 15:24:05","Jul 24, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/5/6282de83cdae4.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/5/6282de8389f02.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/5/6282de82bfb6c.jpg",{"id":173,"testimonial_id":13,"score":13,"url":174,"title":175,"quote":176,"body":177,"amp_body":13,"amp_verified":13,"publish_at":178,"img_thumb":179,"img_small":180,"img_medium":181,"img_large":182,"alt_text":183,"image_source":81,"seo_title":184,"seo_description":185,"seo_keywords":84,"type_id":6,"category_id":17,"user_id":186,"author":6,"deleted_at":13,"created_at":187,"updated_at":188,"category_url":20,"category_name":18,"publish_date":189,"img_large_src":190,"img_medium_src":191,"img_thumb_src":192},562,"0-car-finance","0% Financing Car Deals in Canada: Fact or Fiction?","There’s something about seeing those 0% financing offers in car commercials and internet ads that makes you think \"free money!\" Doesn’t 0% financing essentially mean you not only get a loan, but you don’t have to pay interest on that loan?","\u003Cp>Technically yes, but like most too-good-to-be-true deals in life, it’s not that simple. \u003C/p>\r\n\u003Cp>The offer of 0% financing is one of the most common in the auto industry for a reason. It entices the buyer like few other promotions can. The idea of getting great financing deals while making expensive vehicles seem more accessible seems very appealing. But what many don’t know is that while saving money on a vehicle with 0% financing is possible, \u003Cstrong>it’s not easy to get approved\u003C/strong> for a vehicle at this rate. To qualify for a zero percent car loan you often need an excellent credit score, so if your credit history isn't looking too good your chances of qualifying for 0% is probably pretty slim. For those select few who do get approved, 0% financing still may not be worth it in the long run.\u003C/p>\r\n\u003Cp>So before you sign on the dotted line, let’s pull back the curtain on 0% financing and see what’s really going on behind the scenes. And then let's talk about how you can \u003Cstrong>find the best car deals near you and the best place to finance a car\u003C/strong>, with or without 0% APR. (APR stands for Annual Percentage Rate. It is the yearly interest rate charged on borrowed money, expressed as a percentage of the loan amount).\u003C/p>\r\n\u003Ch2>What does 0% car financing mean?\u003C/h2>\r\n\u003Cp>When you apply for auto financing, you agree to borrow money from a financial institution—either a bank, in-house financing at the dealership, or other lending institution—to help pay for the car loan. For this service, you will be charged an interest rate, which is a fee that you pay every month for the duration of the loan term, in addition to the principal sum of money borrowed.\u003C/p>\r\n\u003Cp>\u003Cstrong>Zero percent financing means that\u003C/strong> \u003Cstrong>you can get approved for finance without having to pay any interest\u003C/strong>.\u003C/p>\r\n\u003Cp>But why would any lender do that?\u003C/p>\r\n\u003Cp>Well, it’s usually not the banks that offer this type of financing, but rather the automaker or new car dealership itself.\u003C/p>\r\n\u003Cp>This financing incentive is beneficial to dealers and manufacturers because it helps them clear out old inventory and select models in order to make space for newer models. It can also spark sales of slow-selling vehicles. \u003C/p>\r\n\u003Cp>If the dealer can motivate a vehicle purchase by forgoing the interest on your loan, they might calculate it makes good business sense in order to move inventory.\u003C/p>\r\n\u003Cp>Furthermore, this typically happens when you have already qualified for a loan with a low APR, so the dealer has calculated that the amount they are covering is acceptable.\u003C/p>\r\n\u003Ch2>How can I get 0% financing on a car?\u003C/h2>\r\n\u003Cp>While the offer of 0% financing might be easy to find, your chances of actually getting that interest rate could be more elusive. Zero percent is commonly reserved for customers shopping for new cars with outstanding credit scores and great credit history.\u003C/p>\r\n\u003Cp>New car dealerships that promote these 0% APR special offers don't usually specify that only buyers with great credit will get approved. That’s in the fine print. The reality is that automakers maintain strict applicant criteria that must be met before 0% financing is offered. \u003C/p>\r\n\u003Cp>Having said that, \u003Cstrong>qualifying for 0% car finance with imperfect credit is possible\u003C/strong>. Despite a lower credit score, applicants may get approved for special vehicle offers if they can prove that they can make their monthly payments in full for the duration of the term. Sometimes a co-signer, larger down payment, or collateral will be requested. It also helps if the customer has shown loyalty to the car brand.\u003C/p>\r\n\u003Cp>If you walk into a dealership that has a special promotion and you find out you’re not eligible, don’t fret because 0% financing isn't the only offer worth pursuing. At any given time, there's plenty of value to be found in the new and pre-owned car market. \u003C/p>\r\n\u003Ch2>Is 0% car financing worth it?\u003C/h2>\r\n\u003Cp>As enticing as 0% financing sounds, it might not always be the best deal on offer. For example, a 0% interest loan is usually offered versus a cash rebate option, and the rebate option can often work out better for you, so make sure you have a calculator close by when you're considering your options. See the example below.\u003C/p>\r\n\u003Cdiv class=\"block-quote\">\r\n\u003Ch3>0% Finance vs. Cash Rebate\u003C/h3>\r\n\u003Cp>Steve wants to buy a car priced at $30,000. He applied and got approved with two different dealerships/lenders. With \u003Cstrong>Option A\u003C/strong>, he got a financing rate of 5% and a cash bonus rebate of $5,000. With \u003Cstrong>Option B\u003C/strong>, he was offered the 0% financing rate instead of the cash rebate.\u003C/p>\r\n\u003Cp>In \u003Cstrong>Option A\u003C/strong>, Steve will take the $5,000 cash rebate and pay $3,300 in interest on the $25,000 sum borrowed over the course of a 60-month term. He pays $28,300 altogether.\u003C/p>\r\n\u003Cp>In \u003Cstrong>Option B\u003C/strong>, he will take 0% APR, but he will have higher monthly payments without the cash rebate. Over 60 months, he will pay $30,000 altogether. Just the principal. There is no rebate or interest to calculate.\u003C/p>\r\n\u003Cp>In this circumstance, the \u003Cstrong>cash rebate works out better than 0% financing\u003C/strong>. If there's a trade-in or down payment, you should factor these into your calculations as well.\u003C/p>\r\n\u003Cp>Furthermore, this example does not factor in car sales tax, but it's worth remembering that the rebate not only decreases the amount of interest you ultimately pay, but also how much tax you will pay on the total amount financed. If you have a trade in vehicle that can also decrease the amount of tax you need to pay as it lowers the total amount owed. \u003C/p>\r\n\u003C/div>\r\n\u003Ch2>Other reasons why 0% finance might not be the best offer\u003C/h2>\r\n\u003Cp>While the 0% APR promotion is usually the most attractive at first glance, there are multiple reasons why you shouldn't jump at the first offer that comes along. Below are a few reasons why you might steer clear of a 0% financing offer:\u003C/p>\r\n\u003Ch3>Your options are limited\u003C/h3>\r\n\u003Cp>As we mentioned earlier, 0% financing is usually offered by dealers and manufacturers to clear out old stock or move under-selling vehicles. Sure, you’re getting a good deal, but you might not be getting the car that you actually want. Popular models or specific trims and features may not be included in a zero percent interest rate promotion while certain car brands such as luxury brands may never offer a 0% financing promotion. \u003C/p>\r\n\u003Ch3>You don't decide the term\u003C/h3>\r\n\u003Cp>It’s important to note that 0% financing offers typically don't let you choose the length of the term. You might only get 0% interest for a certain period before a higher interest rate kicks in. This abrupt change in monthly payments could be disruptive to your finances and it might encourage you to accept a shorter term. That’s not ideal if you were hoping for a longer term to keep monthly payments low. With 0% APR, you may have to provide a larger down payment to keep payments low and get the loan paid off before the higher rate kicks in.\u003C/p>\r\n\u003Ch3>No 0% financing on used cars\u003C/h3>\r\n\u003Cp>The 0% interest rate offer is utilized by many dealerships and manufacturers to move new vehicle inventory to make space for incoming models. For example, don’t be surprised to see 0% financing available on this year's models just when the latest models for next year are making their way to dealer lots and online shopping. In other words, pre-owned vehicles are not part of the equation. While there are many great deals to be found in the used car market, don’t expect to find this promotional offer available for used vehicles.\u003C/p>\r\n\u003Ch2>Other financing options for new and used cars\u003C/h2>\r\n\u003Cp>0% financing isn't the only option out there when it comes to financing a new car. There are several other popular financing options to consider:\u003Cbr />\u003Cbr />\u003Cstrong>1. Traditional Auto Loans\u003Cbr />\u003C/strong>\u003Cbr />Description: A standard loan provided by banks, credit unions, or online lenders where you pay back the principal amount plus interest over a set term (usually 36, 48, or 60 months).\u003Cbr />\u003Cbr />Pros: Flexible terms, competitive interest rates, and potential for negotiation.\u003Cbr />\u003Cbr />Cons: Interest rates vary based on credit score, and longer terms can lead to higher overall interest costs.\u003Cbr />\u003Cbr />Read how to \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/how-to-qualify-for-car-financing-with-bad-credit-in-canada\">get approved\u003C/a> for a car loan with bad credit in Canada \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/how-to-qualify-for-car-financing-with-bad-credit-in-canada\">here\u003C/a>.\u003C/p>\r\n\u003Cp>\u003Cstrong>2. Dealer Financing\u003Cbr />\u003C/strong>\u003Cbr />Description: Financing arranged directly through the car dealership, often with promotional rates or special offers other than 0% financing, such as cash rebates.\u003Cbr />\u003Cbr />Pros: Convenience, potential for special offers or incentives.\u003Cbr />\u003Cbr />Cons: Interest rates might be higher than those available through banks or credit unions, and the dealership might not always offer the best terms.\u003Cbr />\u003Cbr />\u003Cstrong>3. Lease Financing\u003Cbr />\u003C/strong>\u003Cbr />Description: Renting the car for a specified term (typically 24-36 months) with the option to buy at the end of the lease or return the car.\u003Cbr />\u003Cbr />Pros: Lower monthly payments, the ability to drive a new car every few years, potential tax benefits.\u003Cbr />\u003Cbr />Cons: Mileage limits, wear-and-tear charges, no ownership of the vehicle unless you choose to buy it at the end of the lease.\u003Cbr />\u003Cbr />Read more: \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/car-leasing-canada-guide\">How to Lease a Car: Car Leasing in Canada Explained\u003C/a>\u003Cbr />\u003Cbr />\u003Cstrong>4. Personal Loans\u003Cbr />\u003C/strong>\u003Cbr />Description: Unsecured loans from banks, credit unions, or online lenders that can be used for any purpose, including buying a car.\u003Cbr />\u003Cbr />Pros: Flexibility in how the funds are used, no collateral required.\u003Cbr />\u003Cbr />Cons: Higher interest rates compared to secured auto loans, potential for higher monthly payments.\u003Cbr />\u003Cbr />Read more: \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/auto-loans-vs-personal-loans\">Auto Loans vs. Personal Loans\u003C/a>\u003C/p>\r\n\u003Cp> \u003C/p>\r\n\u003Ch2>The best place to finance a car & get a great deal (without 0% car finance)\u003C/h2>\r\n\u003Cp>If 0% financing doesn’t work out for you, don’t lose heart. There are plenty of other ways to find the right car at the right price. Follow these tips to ensure you\u003Cstrong> find the best possible deal\u003C/strong> with or without 0% financing.\u003C/p>\r\n\u003Cp>\u003Cstrong>1. Get pre-approved in minutes: \u003C/strong>Before you start looking at new cars, it's a good idea to find out firsthand what rate and deals you’re eligible for. Canada Drives can help you figure out what kind of financing you qualify for, even if you have bad credit. With a pre-approval in your back pocket, you’ll know exactly what vehicle options you're eligible for, saving you a lot of time and frustration.\u003C/p>\r\n\u003Cp>\u003Ca href=\"https://apply.canadadrives.ca/\">Get pre-approved now\u003Cbr />\u003C/a>\u003Cbr />\u003Cstrong>2. Shop pre-owned: \u003C/strong>There are fantastic deals to be found in the used car market regardless of 0% financing. The benefit of buying a used car from a dealership is that you know the car has been professionally inspected and serviced. Furthermore, car dealers and online vendors rely on repeat business, referrals, and online reviews. Therefore, you can be confident that you’re getting a reliable vehicle. Typically, you won’t enjoy the same value for money with a brand new car, or the same peace of mind when you buy a used car in a private sale.\u003C/p>\r\n\u003Cp>\u003Cstrong>3. Mark your calendar:\u003C/strong> Even if 0% financing offers are coming up short, look for special sale events like \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/employee-pricing-fact-or-fiction\">Employee Pricing\u003C/a>, cash rebates, and other promotions. These events generally kick off in the late summer months alongside other promotional offers to clear lots and make space for next year’s models. But there are other opportune times to snag a deal, such as: \u003C/p>\r\n\u003Col>\r\n\u003Col>\r\n\u003Cul>\r\n\u003Cli>towards the end of the year. \u003C/li>\r\n\u003Cli>towards the end of every month. \u003C/li>\r\n\u003Cli>during slower days at the dealership (i.e. weekdays).\u003C/li>\r\n\u003Cli>During the off-season for your vehicle type (i.e. shop for convertibles in October).\u003C/li>\r\n\u003C/ul>\r\n\u003C/ol>\r\n\u003C/ol>\r\n\u003Cp>Read more about \u003Ca href=\"https://www.canadadrives.ca/blog/car-guide/when-is-the-best-time-to-get-a-new-car\" target=\"_blank\" rel=\"noopener\">the best times to buy a car.\u003Cbr />\u003Cbr />\u003C/a>\u003Cstrong>4. Work on your credit score: \u003C/strong>Traditionally, 0% financing is reserved for customers with the best credit scores. But that’s not always realistic for many potential car buyers. Fortunately for today's car buyer, you can get approved for great deals regardless of credit. But in the long run, it makes good financial sense to work towards improving your credit score. Fortunately, \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/do-car-loans-help-build-credit\">any car loan you get approved for today can help you start building credit\u003C/a> for tomorrow.\u003C/p>\r\n\u003Cdiv class=\"block-quote\">\r\n\u003Ch2>Get pre-approved with Canada Drives\u003C/h2>\r\n\u003Cp>Zero percent financing isn't the only great car deal out there. The used car market is more robust then ever and a great place to find the best car deals; you just need to know where to look. \u003Ca href=\"https://apply.canadadrives.ca/\">Get pre-approved for a car loan\u003C/a> today and Canada Drives will connect you with a dealership in your area who can get you a great deal on a vehicle you love!\u003C/p>\r\n\u003C/div>","2024-07-23","/uploads/2021/6/60c6beee70cb4.jpg","/uploads/2021/6/60c6beef631e6.jpg","/uploads/2021/6/60c6beefc7861.jpg","/uploads/2021/6/60c6bef048f01.jpg","0% Car Financing Deals in Canada: Fact or Fiction?","0% Financing Car Deals in Canada: Fact or Fiction? | Canada Drives","Is zero percent interest financing possible for most Canadians or just another sales tactic? Find out what great deals you qualify for, including 0% APR...",4,"2019-01-09 18:30:00","2024-07-23 15:42:13","Jul 23, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2021/6/60c6bef048f01.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2021/6/60c6beefc7861.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2021/6/60c6beee70cb4.jpg",{"id":194,"testimonial_id":13,"score":13,"url":195,"title":196,"quote":197,"body":198,"amp_body":13,"amp_verified":13,"publish_at":199,"img_thumb":200,"img_small":201,"img_medium":202,"img_large":203,"alt_text":204,"image_source":81,"seo_title":205,"seo_description":206,"seo_keywords":84,"type_id":6,"category_id":17,"user_id":85,"author":6,"deleted_at":13,"created_at":207,"updated_at":208,"category_url":20,"category_name":18,"publish_date":209,"img_large_src":210,"img_medium_src":211,"img_thumb_src":212},33,"do-car-loans-help-build-credit","Does Financing a Car Build Credit?","Did you know that a car loan can help you build credit? Making routine payments on time shows lenders that you're trustworthy. Your payment history accounts for 35% of your overall credit score.","\u003Ch2>Does a car loan build credit?\u003C/h2>\r\n\u003Cp>If you can \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/how-to-qualify-for-car-financing-with-bad-credit-in-canada\">get approved\u003C/a>, a car loan is an effective strategy for credit building. Especially if you have bad credit. \u003C/p>\r\n\u003Cp>\u003Cstrong>Making payments on your car loan helps improve your payment history, resulting in a boost to your credit score\u003C/strong>\u003C/p>\r\n\u003Cp>Your credit score is based on components like \u003Cstrong>payment history\u003C/strong>, how much debt is owed, the total length of credit history, what kind of credit you have (revolving or instalment), if you have any new credit on file, and your overall payment history. It is a number between 300 and 900 that represents your overall creditworthiness as a borrower.\u003C/p>\r\n\u003Cp>Although all of these components impact your \u003Ca href=\"https://www.canadadrives.ca/credit-score\">credit score\u003C/a>, they’re each calculated differently. \u003C/p>\r\n\u003Cdiv class=\"block-quote\">\u003Cstrong>In this article, you'll learn:\u003C/strong>\r\n\u003Col>\r\n\u003Cli>\u003Ca href=\"#how\">How car loans build credit\u003C/a>\u003C/li>\r\n\u003Cli>\u003Ca href=\"#advantages\">The advantages of building credit with a car loan\u003C/a>\u003C/li>\r\n\u003Cli>\u003Ca href=\"#how-to-rebuild-credit-with-car-loan\">How to rebuild your credit with an auto loan\u003C/a>\u003C/li>\r\n\u003C/ol>\r\n\u003C/div>\r\n\u003Ch2 id=\"how\">How do car loans build credit?\u003C/h2>\r\n\u003Cp>Your payment history accounts for 35% of your overall credit score, while 30% of your credit score is based on how much of your revolving credit you’re using. If you’re successful at paying back your loans, and keep a low balance on your credit card, these large percentages will have a positive impact on your score. However, if you struggle paying back your accumulated debt and can’t seem to get your payment history under control, your credit score is due to suffer. A low credit score will negatively impact your chances of getting approved for a loan in the future.\u003C/p>\r\n\u003Cp>If you get a \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/cash-back-car-loan\">car loan with cashback\u003C/a>, you can get another \u003Ca href=\"https://www.canadadrives.ca/blog/credit/how-to-fix-bad-credit-and-improve-your-credit-score-fast\">credit score boost from your car loan\u003C/a> by using that money to pay down your credit card balance.\u003C/p>\r\n\u003Cp>\u003Cimg src=\"https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/6/667f23b9d9d6e.jpg\" alt=\"Breakdown of Credit Score Factors\" width=\"670\" height=\"789\" />\u003C/p>\r\n\u003Cp class=\"block-quote\">If you're looking for a \u003Ca href=\"https://apply.canadadrives.ca/\">car loan to rebuild credit\u003C/a>, Canada Drives is the solution for you. We offer affordable financing rates to Canadians facing all types of credit situations. Get pre-approved and browse hundreds of certified vehicles today.\u003C/p>\r\n\u003Cp>There are several routes to take when it comes to fixing credit. Debt consolidation, \u003Ca href=\"https://www.springfinancial.ca/blog/pay-off-debt/credit-and-debt-counselling\">negotiating with your creditors\u003C/a>, or planning to \u003Ca href=\"https://www.springfinancial.ca/blog/pay-off-debt/how-to-get-out-of-debt-fast\">pay off high-interest debts first\u003C/a> (the Debt Snowball Method), are all strategies that can help you lessen the debt load and increase your credit score. \u003C/p>\r\n\u003Ch2 id=\"advantages\">\u003Cstrong>Advantages of building credit with a car loan \u003C/strong>\u003C/h2>\r\n\u003Cp>Let's take a look at the advantages of using a car loan to build credit, how to use the loan opportunity effectively, and how Canada Drives makes it easy to get approved for your credit-building car loan.\u003C/p>\r\n\u003Cp>These three reasons demonstrate how an auto loan might be your best option for rebuilding credit.\u003C/p>\r\n\u003Ch3>\u003Cstrong>1. Auto loans are secured\u003C/strong>\u003C/h3>\r\n\u003Cp>Secured credit is a type of loan that is backed by collateral. In the case of an auto loan, the vehicle is the collateral which means that it can be repossessed if a borrower fails to make monthly payments in full each month. Due to this, secured loans will typically have a lower interest rate compared to unsecured loans – loans that can be approved based on the borrower’s creditworthiness without collateral. \u003C/p>\r\n\u003Cp>A lender may be skeptical approving a borrower with less than perfect credit for an unsecured loan and in return, increase the interest rates. With a secured auto loan, you’ll likely get low-interest rates with affordable payments thanks to the collateral.\u003C/p>\r\n\u003Ch3>\u003Cstrong>2. You need credit to build credit\u003C/strong>\u003C/h3>\r\n\u003Cp>In order to get your credit rating back on track, you need to prove to lenders that you can responsibly manage a healthy mix of credit. Paying your monthly bills on time and in full will improve your credit score but opening up a new form of credit can add to your mix of credit and help you rebuild your score as you work to pay off your debt.\u003C/p>\r\n\u003Cp>To build credit the borrower cannot miss any payments or make late payments. The borrower should also keep the auto loan open for at least a year, even if he or she has enough to pay off the loan sooner. Keeping the loan open shows a pattern of responsible payment history which is what builds a credit score.\u003C/p>\r\n\u003Ch3>\u003Cstrong>3. Car loans are easier to get approved for\u003C/strong>\u003C/h3>\r\n\u003Cp>Subprime loans are available to borrowers who apply for an auto loan with a credit score that falls below average. Generally, Canadians with an overall credit score under 670 are considered subprime. \u003C/p>\r\n\u003Cp>While many dealerships can’t help subprime car buyers, there is a growing number of dealerships that specialize in subprime loans, and companies like Canada Drives who can get you \u003Ca href=\"https://apply.canadadrives.ca/\">pre-approved for a car loan online\u003C/a> in minutes.\u003C/p>\r\n\u003Ch2 id=\"how-to-rebuild-credit-with-car-loan\">\u003Cstrong>How to rebuild your credit with an auto loan\u003C/strong>\u003C/h2>\r\n\u003Cp>Are you ready to start improving your credit with an auto loan? These steps will help you prepare, apply, and get approved for an auto loan.\u003C/p>\r\n\u003Ch3>\u003Cstrong>1. Get your commitments current\u003C/strong>\u003C/h3>\r\n\u003Cp>If the current credit you have is past due, overextended, or has been sent to collections, you need to get it under control before applying for a new car loan. You don’t have to pay it all off, but you should catch up with minimum payments for ALL your current credit obligations.\u003C/p>\r\n\u003Ch3>\u003Cstrong>2. Save up a down payment\u003C/strong>\u003C/h3>\r\n\u003Cp>The lower the initial loan amount compared with the vehicle’s value, the less risk the lender has to assume. While zero down car loans are available (even to subprime car buyers), your chances of approval increase when you offer at least 10% of the purchase price as a down payment. \u003C/p>\r\n\u003Ch3>\u003Cstrong>3. Spend within your means\u003C/strong>\u003C/h3>\r\n\u003Cp>If your debt-to-service ratio is already high or if you earn a modest income, think Corolla, not Cadillac. Keep your payments reasonably low so you aren’t stretching your ability to repay. \u003C/p>\r\n\u003Ch3>\u003Cstrong>4. Don’t shotgun your application\u003C/strong>\u003C/h3>\r\n\u003Cp>A tendency is to send in a credit application to several lenders or dealers, expecting a few rejections but potentially one approval. This type of process hurts your chances all around. A service like Canada Drives can match up \u003Ca href=\"https://apply.canadadrives.ca/\">your application\u003C/a> to the right lender to help you get approved for the best possible rate. \u003C/p>\r\n\u003Ch3>\u003Cstrong>5. Pay on time, every time\u003C/strong>\u003C/h3>\r\n\u003Cp>Late and missed payments stay on your credit report for seven years, and it shows lenders that you can’t be trusted to make your payments on time. Make sure that you pay your car loan on time and in full every time it’s due, without question. Avoid grace periods as well.\u003C/p>\r\n\u003Ch2>Get approved with Canada Drives\u003C/h2>\r\n\u003Cp>The right car loan will put you on the right track to a better credit score and improved financial standing. Canada Drives can help you get the vehicle you want with financing that fits your budget. \u003Ca href=\"https://apply.canadadrives.ca/\">Get pre-approved\u003C/a> today (for free) to see what you could be eligible for.\u003C/p>","2024-07-10","/uploads/2024/7/668f03ed41d81.jpg","/uploads/2024/7/668f03ed77567.jpg","/uploads/2024/7/668f03ed89786.jpg","/uploads/2024/7/668f03ed9a915.jpg","Car Loan Application & Credit Report","Does Financing a Car Build Credit? | Canada Drives","Financing a car can help build credit because they can be easier to get approved for, and routinely making payments on time shows creditors you're trustworthy.","2015-11-25 07:38:42","2024-07-10 14:58:05","Jul 10, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/7/668f03ed9a915.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/7/668f03ed89786.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2024/7/668f03ed41d81.jpg",{"id":214,"testimonial_id":13,"score":13,"url":215,"title":216,"quote":217,"body":218,"amp_body":13,"amp_verified":13,"publish_at":219,"img_thumb":220,"img_small":221,"img_medium":222,"img_large":223,"alt_text":224,"image_source":81,"seo_title":225,"seo_description":226,"seo_keywords":84,"type_id":6,"category_id":17,"user_id":227,"author":227,"deleted_at":13,"created_at":228,"updated_at":229,"category_url":20,"category_name":18,"publish_date":230,"img_large_src":231,"img_medium_src":232,"img_thumb_src":233},1461,"what-is-a-car-loan-pre-approval","What Is a Car Loan Pre-approval? (And What’s The Best Way To Get One?)","As exciting as shopping for a new or new-to-you vehicle can be, there’s no question that the traditional car-buying journey can be more than a little stressful. ","\u003Cp>You might do a lot of research comparing cars and trucks you like, trying to find the one that will best suit your needs. You might visit several dealerships and take several test drives. You’ll likely even do some quick math to determine whether you can afford a certain vehicle based on your income. \u003C/p>\r\n\u003Cp>After doing all of that work and zeroing in on your perfect next car, SUV, or truck, it can be crushing when the salesperson comes back and says “Sorry, you haven’t been approved.” \u003C/p>\r\n\u003Cp>Yikes! Not only is that situation highly embarrassing, you’ve also gotten your hopes up for nothing and wasted a lot of your own precious time. \u003C/p>\r\n\u003Cp>Luckily, this awkward scenario can be easily avoided by getting pre-approved for a car loan \u003Cem>before you start looking\u003C/em> at specific vehicles. Everyone, no matter what their financial situation is—whether they have \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/how-to-qualify-for-car-financing-with-bad-credit-in-canada\">bad credit\u003C/a> or excellent credit—should get a car loan pre-approval before they do anything else. \u003C/p>\r\n\u003Cp>But how exactly does it work in Canada anyway?\u003C/p>\r\n\u003Ch2>\u003Cstrong>How a car loan pre-approval works \u003C/strong>\u003C/h2>\r\n\u003Cp>An auto loan pre-approval works a lot like other loan pre-approvals, such as a \u003Ca href=\"https://www.springfinancial.ca/blog/homeowner-finances/what-every-first-time-home-buyer-must-know\">mortgage\u003C/a>. The lender takes a look at your income, debts, and credit score to determine whether they’re willing to offer you a car loan. If they are, the pre-approval will tell you the \u003Cstrong>maximum loan amount \u003C/strong>they’re willing to offer you, and maybe the interest rate too. These are the terms you’re likely to get should you move forward with a finance application on a specific vehicle. \u003C/p>\r\n\u003Cp>You might also get a breakdown of how much the monthly or bi-weekly payments would be. If you don’t receive this information, visit a \u003Ca href=\"https://www.canadadrives.ca/car-loan-calculator\">car loan calculator\u003C/a> to work out a rough estimate in seconds.\u003C/p>\r\n\u003Cp>Most lenders will not ask for a driver’s licence, proof of income, or consent to a hard credit check until you decide to move ahead with a finance application for a specific vehicle. Sometimes lenders will also ask for additional documentation to verify your identification, such as a utility bill with your name and address on it. \u003C/p>\r\n\u003Ch3>The benefit of a car loan pre-approval\u003C/h3>\r\n\u003Cp>Once you have a pre-approval in hand you can shop for a vehicle more confidently. \u003Cstrong>You’ll know exactly what you can afford\u003C/strong> so you’ll only consider vehicles in your price range. It also means you won’t have to stress about securing financing after a long car hunt. There are other great \u003Ca href=\"https://www.canadadrives.ca/blog/car-finance/online-preapprovals-transformed-the-way-canadians-shop-for-cars\">benefits of getting pre-approved\u003C/a> for a car loan. \u003C/p>\r\n\u003Ch2>\u003Cstrong>Where can you get pre-approved for a car loan? \u003C/strong>\u003C/h2>\r\n\u003Cp>You can get pre-approved for a car loan a few different ways. Historically, most car buyers have done their pre-approvals through the \u003Cstrong>dealership\u003C/strong>, which may have its own in-house financing or network of lending partners. \u003C/p>\r\n\u003Cp>Another traditional option for car buyers has been to get a car loan pre-approval through a \u003Cstrong>bank or credit union\u003C/strong>. One benefit of going this route is—if you’re working with your own bank—they’ll already have most of the required information on file for you, making the process more straightforward. However, if you have a low credit score, many dealerships, banks, and credit unions may not be prepared to work with you. \u003C/p>\r\n\u003Cp>Getting pre-approved online is an increasingly popular option: either through an \u003Cstrong>online lender or vehicle retailer\u003C/strong>. The benefit of getting a car loan pre-approval online is the low effort and low commitment involved; you can usually complete the process in a matter of minutes—without leaving your home. Additionally, some online providers (such as Canada Drives) are connected with a variety of trusted online lenders (as well as some of the Big Five banks), making it easier to get approved for the best possible rate regardless of your credit situation. \u003C/p>\r\n\u003Ch2>\u003Cstrong>How long does a car loan pre-approval take? \u003C/strong>\u003C/h2>\r\n\u003Cp>Getting pre-approved for a car loan can take as little as a few minutes or up to several days, depending on the lender you’re working with and day of the week. Traditionally, lenders need at least one business day to complete the process, so if you submit the request on a Friday you might not hear anything until after the weekend. \u003C/p>\r\n\u003Cp>If you’re going through a dealership, bank, or credit union, the pre-approval application may need to be done in person but it can sometimes be done online or over the phone. Once the process begins the lender may come back to you with a request for more information or documentation, such as a mortgage statement or utility bill. All in all, you might be waiting for up to a full business day to learn whether you’ve been pre-approved and for how much. \u003C/p>\r\n\u003Cp>With online lenders and online vehicle retailers the pre-approval process is much faster. You can get pre-approved for a car loan online by filling out a short application—which only takes a few minutes—and you’ll get a pre-approval decision almost instantly. \u003C/p>\r\n\u003Ch2>Can I get pre-approved with Canada Drives?\u003C/h2>\r\n\u003Cp>Yes! Canada Drives can get you \u003Ca href=\"https://apply.canadadrives.ca/\">pre-approved\u003C/a> for a car loan online in minutes!\u003C/p>\r\n\u003Cp>With your pre-approval in hand, you’ll be able to shop with more confidence and less stress. You’ll know your exact pre-approved budget, so you don’t have to worry about anything falling through at the last minute.\u003C/p>\r\n","2024-06-03","/uploads/2022/5/6274646aadad7.jpg","/uploads/2022/5/6274646b5dd80.jpg","/uploads/2022/5/6274646b86a4c.jpg","/uploads/2022/5/6274646bbd153.jpg","car loan pre-approval smartphone notification","What Is a Car Loan Pre-approval? (And What’s The Best Way To Get One?) | Canada Drives","Discover what exactly a car loan pre-approval is, where you can get one, and why it's a good idea to get pre-approved before you start your car search. ",5,"2022-05-05 16:57:31","2024-06-03 10:04:43","Jun 3, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/5/6274646bbd153.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/5/6274646b86a4c.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/5/6274646aadad7.jpg",{"id":235,"testimonial_id":13,"score":13,"url":236,"title":237,"quote":238,"body":239,"amp_body":13,"amp_verified":13,"publish_at":240,"img_thumb":241,"img_small":242,"img_medium":243,"img_large":244,"alt_text":245,"image_source":81,"seo_title":246,"seo_description":247,"seo_keywords":84,"type_id":6,"category_id":17,"user_id":227,"author":227,"deleted_at":13,"created_at":248,"updated_at":249,"category_url":20,"category_name":18,"publish_date":250,"img_large_src":251,"img_medium_src":252,"img_thumb_src":253},1504,"used-car-taxes-in-british-columbia","Understanding BC Used Car Taxes (And How Luxury Tax Works)","In British Columbia, where you buy, the price you pay, and the type of used car all factor into how your car taxes are calculated. ","\u003Cp>It’s a little confusing but as a wise person once said, “knowledge is power”. In this case, that knowledge can help you make sense of what you’re paying and why you’re paying it. It might even help you save some cash. \u003C/p>\r\n\u003Ch2>\u003Cstrong>How car sales taxed in BC - Do you pay GST and PST? \u003C/strong>\u003C/h2>\r\n\u003Cp>Car sales are taxed differently in each province but British Columbia is probably the quirkiest of them all. For example, things are pretty straightforward in Alberta, where there’s \u003Ca href=\"https://www.canadadrives.ca/blog/car-guide/car-sales-tax-across-canada\">no provincial sales tax\u003C/a>. That means you pay 0% taxes on any privately sold used vehicle you buy there. \u003C/p>\r\n\u003Cp>Compare that with BC, where there’s not only provincial sales tax (PST) to contend with but the rate of that tax fluctuates depending on a few different factors. \u003C/p>\r\n\u003Cp>In BC, you’ll find yourself dealing with a few different tax acronyms: \u003C/p>\r\n\u003Cul>\r\n\u003Cli aria-level=\"1\">GST = Federal Goods and Services Tax \u003C/li>\r\n\u003Cli aria-level=\"1\">PST = Provincial Sales Tax \u003C/li>\r\n\u003Cli aria-level=\"1\">HST = Harmonized Sales Tax \u003C/li>\r\n\u003C/ul>\r\n\u003Cp>GST is set at 5% across Canada and you’ll pay that on any vehicle—new or used—purchased at any dealership. You’ll also have to pay PST, which can be anywhere from 7-20% depending on the sale price of the vehicle, and where you purchased it. HST refers to the total of both taxes you pay. \u003C/p>\r\n\u003Cp>For example, here’s a breakdown of the taxes you’d pay at a dealership on a new or used vehicle priced under $55,000 in BC: \u003C/p>\r\n\u003Ctable style=\"text-align: center; table-layout: fixed; width: 100%;\">\r\n\u003Ctbody>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>GST\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>PST\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>HST (Subtotal of GST + PST) \u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>5%\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>7%\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>12%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003C/tbody>\r\n\u003C/table>\r\n\u003Ch2>\u003Cstrong>Do you have to pay tax on used cars in BC? \u003C/strong>\u003C/h2>\r\n\u003Cp>You do have to pay tax on a used car in BC, but when it comes to how those taxes are calculated and paid, there’s a difference between buying a used car in a dealership versus through a private sale. \u003C/p>\r\n\u003Ch3>\u003Cstrong>Tax on a used car at a dealership \u003C/strong>\u003C/h3>\r\n\u003Cp>At a dealership, you’ll pay a combination of GST and PST on the purchase of a used car. The GST is set at 5% and the rate of PST you pay depends on the sale price of the vehicle. For vehicles under $54,999.99 the PST rate is 7% and it increases from there, all the way to 20% PST for a a vehicle with a purchase price over $150,000: \u003C/p>\r\n\u003Ctable class=\"alternate-row-shading\" style=\"text-align: center; table-layout: fixed; width: 100%;\">\r\n\u003Ctbody>\r\n\u003Ctr>\r\n\u003Ctd colspan=\"2\">\r\n\u003Cp>\u003Cstrong>PST Rates On Used Cars (Dealership)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>Purchase Price\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>PST Rate\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>Under $55,000\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>7%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>$55,000 - $55,999\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>8%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>$56,000 - 56,999\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>9%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>$57,000 - $124,999\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>10%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>$125,000 - $149,999\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>15%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>Over $150,000\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>20%\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003C/tbody>\r\n\u003C/table>\r\n\u003Ch3>Tax on a used car in a private sale \u003C/h3>\r\n\u003Cp>In a private sale, you’ll only have to pay PST on the purchase. But there’s a catch: Even though you’re not paying GST, the PST rate is higher on privately sold vehicles in BC, as a way of essentially making up the difference from the missing GST. In BC, the PST rate for vehicles under $125,000 is 12%, and goes up from there. \u003C/p>\r\n\u003Ctable class=\"alternate-row-shading\" style=\"text-align: center; table-layout: fixed; width: 100%;\">\r\n\u003Ctbody>\r\n\u003Ctr>\r\n\u003Ctd colspan=\"2\">\r\n\u003Cp>\u003Cstrong>PST Rates On Used Cars (Private Sale) \u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>Purchase Price\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cstrong>PST Rate\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Under $125,000\u003C/span>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">12%\u003C/span>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">$125,000 - $149,999\u003C/span>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">15%\u003C/span>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">Over $150,000\u003C/span>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd>\r\n\u003Cp>\u003Cspan style=\"font-weight: 400;\">20%\u003C/span>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003C/tbody>\r\n\u003C/table>\r\n\u003Ch2>Paying PST on a privately sold used vehicle\u003C/h2>\r\n\u003Cp>\u003Cbr />When you buy a used car at a dealership (or online retailer) paying PST is simple. You pay it at the time of sale as part of the purchase price, so it’s all pretty straightforward. When you’re buying a used vehicle from a private seller, paying PST isn’t as cut and dry. \u003C/p>\r\n\u003Cp>In cases where a vehicle is purchased from a private seller, PST is typically calculated and collected when the buyer goes to register that vehicle with ICBC. \u003C/p>\r\n\u003Ch3>Documentation required for PST on private sales \u003C/h3>\r\n\u003Cp>When you go to register a car you bought from a private seller, ICBC will need some key pieces of documentation on the sale. Most importantly, you’ll need to provide proof of the purchase price you paid or, if the vehicle was a gift, documentation of the vehicle’s fair market value. Make sure you receive proper documentation on the sale from the buyer before completing the transaction. \u003C/p>\r\n\u003Cp>If the private seller you purchased the vehicle from is registered to collect PST, they’re required to collect PST from you at the time of sale. In these rare cases, make sure you have documentation from the seller proving you paid PST on the sale and bring this with you to ICBC when you register the car. \u003C/p>\r\n\u003Ch3>How PST is calculated at ICBC \u003C/h3>\r\n\u003Cp>When registering your vehicle, ICBC will look at the purchase price and assess it against what’s considered a fair market value for that vehicle. From this, they’ll determine the amount of PST you’ll need to pay. This is done to prevent buyers and sellers from frauding the system in order to pay less PST. \u003C/p>\r\n\u003Cp>For example, if you and a buyer agree to a purchase price of $5,000 on a used car, you might expect to pay $600 in PST (12%) on that at the time of registration with ICBC. However, if ICBC deems the purchase price was below the fair market value of the vehicle, they’ll charge you PST on the fair market value. Let’s say ICBC considers the fair market value to be $10,000. In that case, you’ll be required to pay $1,200 in PST.\u003C/p>\r\n\u003Cp>If you disagree with ICBC’s assessment of the vehicle’s value, you’ll have to pay for a mechanic to do an appraisal on why the vehicle is worth less. \u003C/p>\r\n\u003Ch2>\u003Cstrong>What’s the BC luxury car tax? \u003C/strong>\u003C/h2>\r\n\u003Cp>The BC luxury car tax is often-cited but little understood. It’s really just referring to the thresholds at which PST increases, depending on the purchase price of a vehicle. Whether you buy a used car from a dealership or a private seller, the amount of PST you’ll need to pay will fluctuate depending on the purchase price. \u003C/p>\r\n\r\n\r\n\u003Ctable class=\"two-column-table-color\">\r\n\u003Ctbody>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>\u003Cstrong>Dealership Sale Price (PST)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>\u003Cstrong>Private Sale Price (PST)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Under $55,000 \u003Cstrong>(7%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\" rowspan=\"4\">\r\n\u003Cp>Under $124,999 \u003Cstrong>(12%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$55,000 - $55,999 \u003Cstrong>(8%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$56,000 - 56,999 \u003Cstrong>(9%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$57,000 - $124,999 \u003Cstrong>(10%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$125,000 - $149,999: \u003Cstrong>(15%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$125,000 - $149,999 \u003Cstrong>(15%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Over $150,000: \u003Cstrong>(20%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Over $150,000 \u003Cstrong>(20%)\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003C/tbody>\r\n\u003C/table>\r\n\u003Cp style=\"text-align: center;\">\u003Csmall>\u003Cstrong>PST for new or used vehicles purchased in BC\u003C/strong>\u003C/span>\u003C/small>\u003C/p>\r\n\u003Ch2>\u003Cstrong>How is luxury tax calculated? \u003C/strong>\u003C/h2>\r\n\u003Cp>The first threshold is $55,000. If you buy a used car under this price, you’ll pay a PST rate of 7%. At the top end of the spectrum is where the tax increases really start to take a bite. For vehicles over $125,000 you’re looking at 15%, and for vehicles over $150,000 the rate jumps to a whopping 20%. So if you’re thinking about picking up a high-priced luxury supercar, you’ll need to budget well beyond the sticker price. \u003C/p>\r\n\u003Cp>For example, let’s say you’re buying a shiny new-to-you Lamborghini for $150,000. At 20% PST, you’ll be looking at an additional $30,000 on top of the purchase price. Yikes. And don’t forget, if you’re buying that used Lambo from a dealership you’ll also be paying 5% GST as well, which amounts to another $7,500. \u003C/p>\r\n\u003Ch2>\u003Cstrong>Tax breaks for used zero-emission electric vehicles \u003C/strong>\u003C/h2>\r\n\u003Cp>These days there are plenty of reasons to consider switching to a zero-emission electric vehicle. From rapidly rising gas prices to concerns over the environment, going EV is an increasingly popular option with Canadians. But now you can add tax breaks to the list of reasons to switch as well. \u003C/p>\r\n\u003Cp>If you buy an \u003Ca href=\"https://www.icbc.com/brochures/Pages/pst-on-vehicles.aspx\" target=\"_blank\">eligible used electric vehicle\u003C/a> in BC, either from a dealership or a private seller, the PST thresholds are considerably higher, meaning you can buy a higher priced vehicle and pay a lower PST rate. For example, you’ll pay 7% PST on any eligible used EV under $75,000. At that same price on a gas-powered car or truck, you’re looking at 10% PST. \u003C/p>\r\n\u003Ctable class=\"two-column-table-color\">\r\n\u003Ctbody>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>\u003Cstrong>Eligible EVs\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>\u003Cstrong>Non-EVs\u003C/strong>\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Under $75,000 (7%)\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Under $55,000 (7%)\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$75,000 - $75,999.99 (8%)\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$55,000 - $55,999 (8%)\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$76,000 - $76,999.99 (9%)\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$56,000 - 56,999 (9%)\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$77,000 - $124,999 (10%)\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$57,000 - $124,999 (10%)\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$125,000 - $149,999 (15%)\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>$125,000 - $149,999 (15%)\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003Ctr>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Over $150,000 (20%)\u003C/p>\r\n\u003C/td>\r\n\u003Ctd style=\"text-align: center;\">\r\n\u003Cp>Over $150,000 (20%)\u003C/p>\r\n\u003C/td>\r\n\u003C/tr>\r\n\u003C/tbody>\r\n\u003C/table>\r\n\u003Ch2>Less taxing, more relaxing\u003C/h2>\r\n\u003Cp>We think buying a car should be simple and straightforward. \u003Ca href=\"https://apply.canadadrives.ca/\" target=\"_blank\">Get pre-approved\u003C/a> for your next car loan today. We will connect you with a dealership partner in your area who will show you all the vehicles you qualify for, just pick the one you want and drive away! \u003C/p>","2024-04-30","/uploads/2022/6/62a7b9678c502.jpg","/uploads/2022/6/62a7b9684e246.jpg","/uploads/2022/6/62a7b9689c6fc.jpg","/uploads/2022/6/62a7b968f17e1.jpg","BC car tax","Understanding BC Used Car Taxes (And How Luxury Tax Works) | Canada Drives","What taxes do you pay on a used car in BC? Where you buy, the price you pay, and the type of used car all factor into the tax calculation...","2022-06-10 13:38:16","2024-04-30 14:08:31","Apr 30, 2024","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/6/62a7b968f17e1.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/6/62a7b9689c6fc.jpg","https://cms-blog-uploads-354387082548.s3.us-west-2.amazonaws.com/uploads/2022/6/62a7b9678c502.jpg",["Reactive",255],{"$snavigation":256,"$ssite-config":313},[257,262,265,287],{"title":258,"href":259,"rel":260,"getDynamicHref":261},"Get Pre-Approved","https://apply.canadadrives.ca?start=1&SID2=cdoop","nofollow",true,{"title":263,"href":264},"Sell My Car","/sell-my-car",{"title":266,"cardStyles":267,"desktopVisible":268,"hideBorder":268,"menu":269},"Why Canada Drives","why-cd-card",false,[270],{"links":271},[272,277,282],{"title":273,"text":274,"href":275,"icon":276},"How It Works","The easiest way to buy or sell a car","/how-it-works","/svg/nav/cogs.svg",{"title":278,"text":279,"href":280,"icon":281},"Inventory","Get access to the widest selection of vehicles in Canada","/inventory","/svg/nav/car-front.svg",{"title":283,"text":284,"href":285,"icon":286},"Customer Reviews","See why Canada Drives is Canada’s favourite way to buy or sell a car","/reviews","/svg/nav/star.svg",{"title":288,"cardStyles":289,"desktopVisible":268,"hideBorder":268,"menu":290},"Resources","resources-card",[291],{"links":292},[293,298,303,308],{"title":294,"text":295,"href":296,"icon":297},"Research","Stay up to date with the latest auto news, reviews and buying tips","/blog","/svg/nav/lightbulb.svg",{"title":299,"text":300,"href":301,"prefetch":261,"icon":302},"Newsroom","Read news articles about Canada Drives and access our media kit","/newsroom","/svg/nav/newspaper.svg",{"title":304,"text":305,"href":306,"icon":307},"Understanding Car Loans","Learn everything you will ever want to know about car loans","/understanding-car-loans","/svg/nav/dollar-sign.svg",{"title":309,"text":310,"href":311,"icon":312},"Car Loan Calculator","Quickly and simply calculate your potential car loan payments","/car-loan-calculator","/svg/nav/calculator.svg",{"description":314,"env":315,"name":316},"Canada Drives Website (Nuxt)","production","canadadrives-website",["Set"],["ShallowReactive",319],{"LrtT6uwpvC":-1},"/blog/car-finance",["Reactive",322],{"bbStore":323},{"ConnectionType":324,"fbclid":13,"gclid":13,"isLiveChatLoaded":268,"trackingParams":84,"ttclid":13,"utmCampaign":13,"utmContent":13,"utmMedium":13,"utmSource":13,"utmTerm":13},"unknown connection type"]