How Long Does it Take to Get a Car Loan
The time it takes to get approved for a car loan really depends. Traditional bank loans are usually the first place borrowers turn, but it can take weeks to get approved and there are often a few hoops to jump through. Thankfully, the car loan landscape has changed. Today, there are trusted online providers that offer near-instant approval...
Almost every vehicle purchased in Canada is financed in some fashion. For those who buy a car at a dealership, two out of every three shoppers chose dealer financing.
While nearly everyone who buys a car needs to borrow money to get the deal done, one common question comes up time and time again:
“How long does it take to get a car loan?”
The answer depends on the route you take: the bank or the dealership.
The credit approval process
No matter if you’re going through a bank or a dealership for your credit approval, the same information is required.
To obtain a car loan approval, you’ll need:
- Proof of employment for a minimum of three months, or a job letter promising employment.
- Proof of income to support your loan payments and other commitments.
- ID & proof of residence.
- Add trade-in vehicle information if you want to add your current car to the deal.
- In some cases, you’ll also need proof of insurance.
Another major factor is your credit history.
You don’t supply the credit report. You just need to give your consent and the lender will pull that information from one of the major credit bureaus to determine your car loan eligibility.
But while the information required is the same for either a bank or a dealership, the processes are different.
What to expect with bank loan applications
If you decide to finance a car purchase through your bank, you can make an appointment with a loan officer who reviews your application.
If you opt for auto finance from a bank, there can be a lot of back and forth with paperwork between the bank and dealership.
Altogether, it typically takes two or three appointments over the span of three-to-seven days or more to get car financing at a bank.
It can take even longer to get approved for a bank loan if your credit is less than perfect. If you have bad credit, the banks will often decline your credit application.
And that’s how Canada Drives can help. We can get you pre-approved for a car loan regardless of your credit situation. And because everything happens 100% online, we can do it quickly. That's right, no appointments required!
Is dealer financing faster?
Car financing at a dealership works a little differently from bank loans. Once you find a car you like and reach an agreement with the salesperson, you’ll meet the finance manager who will review your credit score. They’ll submit an application for your car loan to several potential lenders.
In some cases, an approval comes back immediately. In other instances, it can take up to 48 hours.
Once you’re approved, you sign the paperwork at the dealership and take delivery of your vehicle. With finance arranged at the dealership, there’s no need to run back and forth to a lender.
Advantages of dealer financing
Compared to bank loans, dealer financing is generally a smoother process because you can complete your car-shopping experience and payment/financing all in one place. In many cases, you could be in the driver’s seat of your new car in as little as 48 hours.
If you're shopping for a brand new car, remember that with subvented interest rates (the advertised rates you see as low as 0%), customers can save thousands of dollars in interest charges over the course of their loan term, and that’s something a bank can’t offer. Keep in mind that your typical bank rate for car loans is higher than advertised rates by car manufacturers. In some cases, you could pay more interest by financing through your bank over a dealership.
Get a fast car loan with Canada Drives
To speed up the time it takes to get a new car, why not get pre-approved for auto finance before you start browsing vehicles? When you know how much of a car loan you qualify for, you won't waste time looking at vehicles you can't afford. Get pre-approved online today. It only takes two minutes and will not impact your credit score.
Canada Drives has reimagined the dealership experience for the 21st century. Browse hundreds of certified vehicles online, pay cash or arrange to finance, and get your vehicle delivered to your door to begin your 7-day test-own period.
