Buying a Car Out of Province
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After long days and nights of researching cars you’d like to buy, you finally found the one. Mileage is low, the colour is right and it has all of the perks you could dream of. But, there’s one problem, the car resides in another province. If this is you, the car with everything you could hope for is not lost. It’s absolutely possible to purchase a car in another province, but it will take more time and money to complete the purchase. To learn more about how purchasing a car in another province works, continue reading.
Can You Buy a Car in Another Province?
Yes, it is possible to buy a car in another province, however, the process is slightly more complex and time-consuming. Furthermore, the cost of the purchase can end up being more expensive than buying a car in your home province. This is because the car will need to be transported and transferred to you, whereas a car bought in your home province can simply be driven off the lot.
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Steps To Take When Buying a Car Out of Province
So long as you’re okay with the complexity of the process and the additional costs, you can begin your out of province car purchase. To prepare for the occasion, consider the below steps involved when buying a car out of province. Knowing these steps will help you feel less anxious during the process and allow you to make knowledgeable decisions.
- Step 1: Find the right car (this is the easiest step!)
- Step 2: Obtain a background check on the vehicle (ie. CARFAX or similar reports)
- Step 3: Obtain a pre-purchase vehicle inspection
- Step 4: Secure favourable financing
- Step 5: Insure the vehicle
- Step 6: Register the vehicle
What to Consider for Your Out of Province Car Loan
Let’s deep diver into the above four steps. When you’re looking for an auto loan to purchase your out of province car, you’ll need to consider who you’ll obtain financing from, what you’re looking for in a lender and what the lender wants from their loan applicants.
When it comes to auto loan lenders, you have several options which include banks, credit unions, dealerships, alternative lenders, and private lenders. All of these lender types have their own corresponding advantages and disadvantages. It’s definitely worth your while to reach out to a few lenders for comparison, but be sure that you apply to them all at the same time to preserve your credit score. The option you choose will boil down to your specific needs and convenience (was your car loan application rejected? Click here).
The characteristics of the lender matters as well. If you think you’ve found a lender that you’d like to proceed with, perform some due diligence on them before moving forward. Even if you have all of the terms and conditions you want, you still want to ensure that you’re working with a fair and understanding individual or business. The last thing you want is to work with a dishonest and untruthful lender.
Finally, lenders typically have a list of requirements for potential loan candidates. This could be minimum income requirements, minimum credit score requirements, having a steady paycheck and the list goes on. Before you apply for a car loan, research or ask the lender what their minimum requirements are. If you don’t meet the requirements, there is no chance that you’ll get approved for financing so it’s worth it to look into. Also, knowing the requirements will give you the opportunity to boost your credentials before applying to better your odds of approval.
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The Cost Associated with Buying a Car Out of Province
When you purchase a car out of province, there are some additional costs to consider outside of normal car ownership. As mentioned, purchasing a car outside of your home province tends to be more costly. Below are the costs you can anticipate when buying a car out of province.
- Transportation of the car to your home province (you can either ship it or drive it home)
- Transfer of registration and title to your home province ($80 to $150, depending on the province you live in)
- Insurance of the vehicle in your home province
- Financing costs
- Taxes, specifically motor vehicle tax and GST/HST
The Pros and Cons of Buying a Car Out of Province
As with all financial decisions, there are corresponding benefits and drawbacks to consider. Before you make your final decision on purchasing a vehicle out of province, consider the list of pros and cons below.
- Getting the Car You Want. If the car you want isn’t available in your province, purchasing a car in another province might be the only way to get the car of your dreams. In addition, if you consider all of the car merchandise available in Canada, you’ll have more options.
- Potentially Lower Sales Tax. Sales taxes differ from province to province. If you’re purchasing a car in a province with lower sales taxes than your home province, there is an opportunity to save on that portion of the purchase. Keep in mind that you’ll still be responsible for paying the motor vehicle tax.
- Extra Cost. Purchasing a car at a local dealership is more likely to be cheaper than purchasing a car in another province.
- Unfamiliar Business Practices. The business practices of dealerships and lenders can vary from province to province. For this reason, there is a greater risk of getting yourself into an unfavourable situation since you don’t know what to expect.
- More Time-Consuming. Because you’re working with dealerships and lenders in another province, the time to research the car you want, test drive the car, and secure financing will be more time-consuming. If you can’t take time away from work or other more important things, buying a car in another province might not be right for you.
Crossing Borders to Get the Car You Want
Purchasing a car in another province only makes sense if you can’t find the car you want in your home province. If that’s the case, it is totally possible to buy a car in another province, it will merely take more time and money. If you’re looking for financing to help purchase a vehicle, in your home province or in another one, we can help match you with the right lender based on your unique needs.
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