What You Need to Know About Auto Financing in Canada

By: Prince George Toyota   |   31 Dec 2022

Many Canadians find cars highly valuable and consider them a necessity. But if you’re unable to pay the full cost of one upfront, you’ll have to consider financing one. While the world of auto financing can get a little tricky, the experts here at Prince George Toyota are here to help! Here are a few things you need to know when it comes to financing your next vehicle. 

What to Consider When Shopping for a Car

There is no hard and fast rule when it comes to how you should spend your money. There are different factors that you need to consider when buying a car. The most important factors in terms of finance are:

  • The price of the car
  • Your budget
  • Car financing options
  • Other costs, such as insurance and maintenance

Financing Your Car

There are two common options when financing a car: a loan through a financial institution or in-house financing from the dealer. Each of these options has its pros and cons. Keep reading below to learn more about them.

  • Loan with a Financial Institution

If you choose to get a loan from a financial institution, you will have to apply for a loan. This can be time-consuming, and you have to be prepared to give the lender a lot of personal information. If you have bad credit and no employment, it will be a more difficult process.

When applying for a loan, you will also have to use collateral to secure the loan. The lender will hold your assets as a guarantee to ensure that you will pay them back.

  • In-House Financing

You can also choose to get financing from the dealership. This is often a very easy process because you will only need to fill up a single application form. In-house financing is convenient because the lender and the dealer are the same entity.

If you get financing from the dealer, they will keep your vehicle as collateral. In many cases, the dealer will require you to agree that they can take your car if you fail to make your monthly payments.

  • Do Dealers Charge Interest?

Whether you get financing from a financial institution or a dealer, you are more than likely going to be charged interest. The interest is often higher on financing offered by the dealer.

In-house financing has an advantage in that your monthly payments will be lower than if you get a loan from a financial institution. This is because much of the cash that you need to pay upfront is included in the purchase price.

What Is the Best Option?

The best choice will depend on your financial situation. If you can afford the down payments, it is better to get financing from a financial institution. This will allow you to have your own vehicle with no hassle, and you can have more control over your monthly payments.

If you do not have the money to make a large down payment or you are having trouble getting approved, you should consider getting financing from the dealer. You will be able to get your car faster, and it may be easier to convince the lender.


Getting a car loan may seem like quite a daunting process, but you can cut through the confusion by doing some research. Before you start shopping for a car, you need to have a good understanding of your financial situation. We hope that this article opened your eyes to the different options available to you when it comes to financing your car.

Need to apply for auto financing in Canada? You can contact us at Prince George Toyota. We carry a wide range of new and used vehicles and offer financing options for them too. Get in touch with us to learn more.

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