Car Loans For Young Drivers: How to Get Approved

If you have just got your driver’s license and are ready to hit the road, now is an exciting time. The next step in your journey is to buy a car and enjoy true independence! But financing car loans as a young driver may seem like a daunting bridge to cross before you can drive.

If you have to buy your own car, you could buy a cheap car for cash or use a car loan. It is for those thinking of a loan that our Dundas car loan team wrote this post.

Here are a few things you need to know about car loans as a young driver.

You Need to be Over 18

We appreciate that you can drive younger than 18 but you need to be an adult to access credit. This is partly for your own protection.

So, while you can legally drive earlier, you’ll need to be 18 before you can access a car loan of any kind.

Your Credit Score is Everything

As soon as you are old enough to access credit, you’re also old enough to begin increasing your credit score.

We appreciate that there are a lot more interesting things to do as a new adult but it’s one of those things that will follow you for the rest of your life. As such, we think it’s worth spending a little time improving the score as much as possible.

Building Credit as a Teenager

Especially when it’s as easy as getting a credit card, setting up automatic payments for the minimum amount and using it regularly!

There is a caveat though. Don’t splurge and max out your credit limit. Spend sensibly and make sure you clear the balance each month.

That way you get all the credit card goodness you want while paying very little for it.

You can also look for a phone contract that doesn’t need a credit check but does note your payments in your credit report. They can help build up a picture of someone who pays on time and manages their obligations.

Two things that will help increase your credit score.

Cosigner Car Loans

Cosigner car loans are also an option. If you don’t have the cash to pay for a car, you could ask someone to guarantee the loan for you.

This is a common option for those with no or low credit and could be something that works for you. If you know someone willing to be a cosigner and they have a good credit score, they could help you get the loan.

They guarantee to pay the loan should you default. They will need to pass the usual car loan qualification tests though.

Younger drivers will often use parents or older siblings but you can use whoever you trust enough and who trusts you enough.

It’s not your only option, but it is an option.

Whatever you decide, our team is ready and willing to help with whatever you want to do!

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