What Documents Do You Need to Finance a Vehicle?
So you’re ready to finance a car—great! Whether you're buying your first used vehicle or looking to refinance a car loan, getting your paperwork in order is key to a smooth, fast approval process.
Lenders don’t just hand out money—they need to be sure you’re creditworthy, employed, and can afford the payments. And if you’re not prepared, that “fast approval” can turn into a paperwork headache.
Whether you’re applying through a dealership or an online platform like AutoPlug, here’s everything you’ll need to finance a vehicle in Canada—including how to make sure your payments fit your budget using tools like a monthly car payment calculator or calculate car payments estimator.
1. Proof of Identity
Let’s start with the basics. To apply for any type of used vehicle financing, you’ll need to prove you are who you say you are.
Acceptable ID typically includes:
A valid Canadian driver’s license (mandatory)
Canadian passport
Provincial photo ID
Pro Tip: Make sure your ID hasn’t expired. Outdated documents are one of the most common reasons for application delays.
2. Proof of Income
Lenders want to know you can afford your monthly payments. Whether you’re employed, self-employed, or receiving other income, you’ll need documentation to back it up.
If you’re employed:
Recent pay stubs (last 2–3 recommended)
Letter of employment
Recent Notice of Assessment (from CRA)
If you’re self-employed:
Last 2 years of tax returns (T1 Generals)
Bank statements showing regular income
Business license or GST registration
Want to know what your payments might look like before applying? Use a monthly car payment calculator to estimate your budget based on your income and expenses.
3. Proof of Residence
Lenders will also verify where you live. This helps confirm your stability and is used to send official loan documents.
Acceptable proof includes:
Utility bill (hydro, internet, etc.)
Lease or mortgage statement
Government correspondence (e.g., tax documents)
Ensure your proof is recent—typically within the last 30–60 days.
4. Proof of Insurance
You’ll need to show that you either have auto insurance or are ready to obtain coverage for the vehicle you're financing.
Some lenders won’t release the funds until you can prove the car is insured. In BC, this means working through ICBC or a private insurer if applicable.
5. Banking Details
To set up your payment schedule, lenders will ask for your:
Void cheque or pre-authorized debit form
Banking institution info (transit, branch, and account numbers)
This makes sure your monthly payments come out automatically—no missed due dates.
6. Vehicle Information (If You’ve Chosen One)
Already found the car you want to finance? Then you’ll also need:
Vehicle Identification Number (VIN)
Purchase agreement or bill of sale
Dealer or seller information
This is especially important when applying to refinance a car loan or switch vehicles mid-loan.
7. Credit Information
Most lenders will run a credit check—but knowing where you stand ahead of time gives you a leg up.
Here's what helps:
Current credit score (get a free report through Equifax, TransUnion, or Borrowell)
Awareness of your minimum credit score for a car loan in Canada (usually around 620, though many lenders go lower with higher interest)
If your score is low, some platforms specialize in used vehicle financing for bad or no credit borrowers. Approval is still possible—you may just need to provide more income documentation or accept a slightly higher rate (for now).
Bonus Tip: Use a Car Loan Calculator Before You Apply
Before submitting any applications, take a moment to calculate car payments using a trusted Canadian tool. Plug in:
Vehicle price
Estimated interest rate
Loan term (in months)
Down payment (if any)
This helps you stay realistic about what you can afford—and prevents you from overcommitting.
Final Thoughts
Financing a car isn’t just about your credit score—it’s about being prepared. When you walk in (or apply online) with your documents ready, the process is smoother, faster, and more likely to result in a vehicle loan approval.
And if you're not sure where to start? AutoPlug makes it easy to apply online, match with lenders, and walk you through exactly what you'll need—no guesswork, no stress.
