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Car Loans For Teenagers: Is It Possible to Get Approved?

Car Loans For Teenagers: Is It Possible to Get Approved?

You can begin driving from age 16 in Canada but can you actually get a car loan as a teenager? When can you buy your first car? These are questions our car loan team fielded yesterday with an excited teenager who had just got their G2 licence.


Getting your driver’s licence is an exciting time. A time when the whole of Canada opens up and you can begin looking further than just your home town. It’s also the beginning of a love affair with the motor vehicle, soon to become the electric motor vehicle.


So how can you finance your first car? do car loans for teenagers exist when you get your G2 licence?


Not quite.

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Can You Finance a Car Loan as a Teenager?

If you just got your driver’s licence, you probably cannot wait until you can get out on the road and begin exploring. However, you’re going to need patience, at least for a little while.


You can drive from age 16 and take your driving test whenever you think you’re ready. But you won’t be able to get a car loan until you’re 18.


You cannot access any type of lending until you’re 18. While you may not agree with us now, that’s a good thing. Don’t be in a hurry to get into debt, no matter how much you want a new car!


If you’re 18 and are now taking your test, that’s a different story. You can access car loans.


However, as you won’t yet have much of a credit history, you’re going to need to work hard to qualify for one.


So, what are your options to buy a car as a teenager?


Options for Buying a Car if You're Under 18 Years Old

1. Pay Cash

Despite being a car loan provider, we actually suggest paying cash for a cheap car to be your first. You’re going to scratch it, ding it and dent it and that will be much better to tolerate in an older car than a brand new one.


9 Good Used Cars Under $5,000 for 2019


Plus, you’re free and clear and won’t have any monthly outgoings except insurance at a time when income is likely limited.


2. The Bank of Mom & Dad

If you’re one of the lucky ones with supportive parents, you could tap them for a loan or ‘contribution’ to your first car. They may donate their old car and buy themselves a new one or give you some cash towards this rite of passage.


Either way, parents can often come through for us in big life moments like these.


3. Save Up Yourself

If you have a weekend job, internship or something else that pays money, you can save up for a car yourself. It will take time and it’s something best started in advance of needing the car, but it’s a viable way to buy your first car.


This is the way I did it. I worked a weekend job for 2 years before I got my G1 so I could get a decent car from the off. Once I got my G2, I bought the car free and clear. It was hard work and took a lot of willpower but I am so glad I did it that way!


You have the rest of your life to get a car loan. When you do, you know where to come!


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

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