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Car loans for nonresidents in Canada

How to increase your chances of car financing approval when you're here on a work permit or only living in Canada temporarily.

Compare car loans for temporary residents See car financing options

Are you a temporary resident in Canada and in need of a car? The good news is that some lenders are willing to offer car loans for temporary residents – but you may be subject to more stringent eligibility requirements than other borrowers.

Can I get a car loan as a temporary resident or with a work permit?

Yes, car loans for temporary residents are essentially the same as any other car loan, except that fewer lenders offer them and you may need to meet additional eligibility requirements, including how long you’ve been in Canada, how long you intend to stay and your employment status.

Be sure to check with your lender to find out exactly what status and documents you must have in order to apply for a loan. Keep these 5 factors in mind when looking for a car loan with a work permit.

1. Visa types accepted by car loan providers

Some lenders will only extend credit to nonresidents holding certain types of visas. Borrowers with student visas or permanent resident status will likely have a greater chance of success than someone on a provisional or seasonal work visa. You’re odds of car loan approval are even better if you have an employer-sponsored visa.

While requirements may vary between lenders, some lenders may limit auto financing to temporary residents with one of the following Visas:

  • Permanent Resident Card IMM5688 or IMM5292
  • Work permit IMM1102 or IMM1442
  • Study permit IMM1208 or IMM1442

2. How long your Visa is valid for

Some lenders may rule you out if you’re on a short-term temporary visa such as a seasonal work visa so your best bet is to apply if you have a work permit that extends for at least a year or two. Your loan will typically only extend for as long as your work permit and passport are valid.

Ideally, you’ll have lived in Canada for at least three months, been gainfully employed and earning a steady income. If your passport is about to expire, or your work visa doesn’t extend beyond half a year, you may have trouble getting approved. You should use your work permit and employment status to show lenders you are here to stay.

3. Credit history as a temporary resident

As a nonresident, you likely have little or no credit history in Canada. Since lenders won’t consider your overseas credit history, they may place more emphasis on your down payment, income and employment status to help determine your ability to repay a loan.

4. Visa breaches

Many visas have strict limitations on the number of jobs you can hold or hours you can work in a week. While it’s important to maximize your income before applying for a car loan, lenders likely won’t extend you credit if you’ve breached the terms of your visa.

5. Car loan term

Most car loan providers offer terms from 1-5 years. However, you likely won’t be offered a loan term that extends more than 3 months before your visa expires. Most lenders only consider your current visa and won’t rely on pending visa applications or extensions — no matter how likely you are to be approved.

Compare car loans for temporary residents

Applying for a car loan through a broker may be your best chance, as a broker can match you with a lender willing to offer loans to temporary residents. As with all car loans, eligibility criteria vary by lender and may include minimum income and credit requirements.

1 - 2 of 2
Name Product Ratings APR Loan Amount Loan Term Requirements Long Table Description
Loans Canada Car Loans
Customer Survey:
★★★★★
0.99% - 46.96%
$500 - $50,000
3 - 60 months
Requirements: Min. income of $1,800 /month, 3+ months employed
LoanConnect Car Loans
Customer Survey:
★★★★★
8.99% - 46.96%
$500 - $50,000
72 - 84 months
Requirements: No min. income requirement
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How do car loans for temporary residents work?

In general, you borrow money needed to purchase a car from a bank, credit union or online lender and enter into a contract to make monthly repayments over a set number of years. The loan is backed by the car you’re purchasing, which means the lender can repossess your car should you fail to make your payments. While you can get car loans for temporary residents, it’s worth looking into getting a personal loan to buy your vehicle.

Increase your chances of approval for car financing with a work permit in Canada

Car loans for nonresidents are considered a high-risk endeavor for lenders. Aside from meeting the eligibility requirements, here are some tips to improve your chances of approval:

How to apply for car loans for temporary residents?

Many lenders allow applications for car loans to be completed online, making it a simple and easy process. On the other hand, since there are more stringent requirements for nonresidents, an online application may be more difficult. Lenders do have a certain amount of leeway when it comes to deciding whether to extend credit to nonresidents.

That’s why an in-person appointment can give you the opportunity to state your case and show that you’re a good candidate. Make an appointment to speak with a car loan officer at your chosen bank or credit union, or over the phone with an online lender.

You should always double check with your lender to see what documents you should bring with you to fill out your loan application, but the following information is typically required:

How do I know if a car is good quality and fairly priced?

Never make a hasty buying decision or let a salesperson pressure you into making a choice. You can look up the Manufacturer’s Suggested Retail Price (MSRP) of a vehicle to find out what the auto manufacturer who made the vehicle says it’s worth. Use this as a negotiating tool with your dealership to make sure you’re not paying an excessive price.

You can also get pre-approved for a car loan amount from multiple lenders and then use these amounts to negotiate with your preferred dealer for a better price. After all, why would they want the interest payments you’ll be making on your car loan to go to someone else?

If you’re buying a used car, ALWAYS get a vehicle history report before signing off on the purchase.

Vehicle history reports can be obtained from reliable companies like CARFAX Canada and show the car’s maintenance history, any accidents involving the car and any current or prior claims on the car’s ownership. You can also run a a free VIN verify check on the Insurance Bureau of Canada’s website to see if the car has been reported as non-repairable due to flood damage.

The Canadian Black Book or the Kelley Blue Book (for vehicles bought in the U.S.) are great resources for checking the value of a car so that you can feel more confident about the deal you’re getting.

Bottom line

Getting a car loan as a nonresident can be difficult, but it definitely is possible. Take the time to call banks, credit unions and online lenders before applying to make sure they have options to provide you with financing. And increase your chances of approval by saving up for a sizeable down payment or by applying with a cosigner.

To learn more about how car loans work and compare lenders, check out our guide.

Compare car financing options for temporary residents

Frequently asked questions about car loans for temporary residents

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