Car Loan For a Used Car In Canada: Everything You Should Know

Not everyone has the resources to buy a new car or to buy a car entirely for cash. So, what are your options then? Can you buy a used car with a car loan?

We asked our auto loans team to explain whether you can finance a car loan for a used car in Canada and how to go about it.

Can You Get a Car Loan for a Used Car?

Yes, you can! The process works much the same as financing a loan for a new car. You cannot buy a used car privately using a car loan though. If you want to buy privately, you’ll need a personal loan from your bank.

This is primarily down to risk. A used car from a private buyer is an inherently risky prospect whether you’re buying with cash or a loan. You don’t know what you’re getting or what’s hiding underneath.

Add finance into the equation and lenders get nervous. So, rather than accept the risk, you can only buy used from a dealer.

Buying from a dealership means some kind of warranty and some reassurance of the quality of the car. While dealerships come in all shapes and sizes, no legitimate dealership wants to risk their reputation by selling you a lemon!

How to Finance a Car Loan for a Used Car

Buying a used car with a loan is the same as buying a new one.

You need to:

• Prepare for the Loan: Get your down payment together, check your credit report, prepare your current car for trade-in or sale to the dealership, get prequalified for the car loan, work out a budget, set an upper spending limit and prepare all your paperwork.

• Go Loan Shopping: Compare loans and rates, shop around for a good deal, talk to our car loans team, let us get you preapproved for a loan, and prepare everything for the application.

• Find the Car: As an Ontario car dealership chain, we have access to hundreds of quality used cars covering every make and model you can think of. If we don’t have something in stock, we can find it for you.

• Do the Deal: Work out the deal, get your trade-in valued or put your own money down, negotiate the price, and sign on the line.

As you can see, financing a car loan for a used car is almost exactly the same as buying a new one. Fast, efficient, and relatively painless!

We have hundreds of used cars across our dealerships. All are safely and mechanically checked and come with warranties and guarantees. Plus, the peace of mind you only get when buying from a reputable dealership.

If you're ready for a car loan, we'd love to help with that! simply fill in the form below to get started.