Klflopster

Husband has been into Dodge to see about buying a car but they have told him he will need 35% deposit ? He has an Experien credit report but they said he needs history in Canada. Is there any other way of getting credit ?

Novocastrian

I did. Back in 1993 though. I preferred to establish a credit rating througn my bank rather than through a dealership. The bank (TD) just wanted to know my salary and arranged a loan secured by the car itself on the spot. Good luck.

PS Why Dodge FFS?

Klflopster

Thanks, we were told there was only one bank that may do it which was Bank of Nova Scotia ? Not sure if it matters but that isn't who he has opened our bank acc with.

Novocastrian

I'd think he'd have the best chance with whichever bank he's got his account(s) at. Do you have/will you get a mortgage?

energysolutions

You may find some places will offer to finance a vehicle without a deposit but the rate will be diabolical, I suppose the higher rate is to offset the additional risk of not having any capital to fall back on should you default

Klflopster

We will eventually get a mortgage, his own bank said he needs more credit history. Maybe we will have to rent for a while ?

Siouxie

Go to Scotia Bank

The Scotiabank StartRight Program includes:

No-fee Scotia One™ Account for one year
Scotia Power Savings Account™
Scotiabank Credit Card
Free Small Safety Deposit Box for one year
Scotiabank StartRight Auto Loan Program
Scotiabank StartRight Mortgage Program

They even have a mortgage program for TWP holders.

Go back to your bank and tell them if they are not prepared to assist you, you will transfer your account to Scotia.

Banks here will go out of their way to keep you, if you play it right!

energysolutions

I have looked at this offer from Scotia and will most likely open an account with them but regarding car loans and potential deposits (the OPs original question) they WILL require a deposit of 25-40% and the program ties you purchasing from a handful of selected franchised dealerships so your vehicle options are limited to this

Check it out - clicky

Siouxie

I know that Scotia have limitations, however, the OP can use their 'offers' for newcomers as leverage to get help from their current bank.

Using the same premiss, my bank didn't want to give me free banking nor a credit card. I mentioned Scotia and was immediately offered both.

It's also possible to get a low-interest line of credit or a loan from the bank to pay the deposit on a vehicle, provided you have a job.

http://www.scotiabank.com/ca/en/0,,254,00.html http://www.scotiabank.com/ca/en/0,,4397,00.html

energysolutions

So, to clarify, are you suggesting that its possible even on a TWP to setup an account (such as the one Scotia bank are offering) and then borrow on that for a deposit on a vehicle that will then be financed elsewhere (the car dealership or similar) so you will then be paying off both simultaneously?

Is this possible? I had imagined that any credit offer (loan or finance) would be subject to a credit search to gauge your financial footing and one could not co-exist with the other as it would be read as "over stretching" yourself

Also, in the event that you default on the repayments and the car is repossessed how does that fall with the bank and finance companies as they both have a claim to any cash that may be generated by the sale of the car or is the loan not secured against the vehicle?

Novocastrian

Why? Unless you were in fact "over-stretching" yourself. But that's the borrower's fault not the bank's.

energysolutions

Dunno, I`ve never had car finance but I do wonder what would happen in the event that someone defaulted on vehicle payments and it was, effectively, partly owned by two different finance companies who will both be trying to recover their money

Would each be due a % based on what they owned at the outset (ie 25% for deposit with one organisation and the remainder with the other) but there is a possibility that it wouldnt cover their initial investment if the borrower defaulted early in the term and the car had depreciated heavily (which is what the deposit is supposed to safeguard against)

Siouxie

What you are talking about is a secured loan or line of credit from the bank, which I was not. Most banks will allow you a line of credit or loan without needing a specific reason for why you want it, it's not tied to a specific purchase.

For instance - I have an unsecured line of credit (actually, most people I know have a line of credit). When I got it, I had been employed for less than 3 months and I had a minimal credit rating as nothing had been in my name up to that point. That didn't preclude me from getting a line of credit, it just meant that the interest rate was higher than if I had a good credit rating.

If you earn sufficient income to cover the cost of 2 loans, why would they refuse it - and if you don't, why would you try to get them? If you default on the line of credit or loan, the bank will request you pay it back and if you do not they will sue you for the balance - the same as any unsecured loan.

I wouldn't know whether they would allow you to take out an unsecured loan if you were on a TWP. I just said it is possible to get a loan or a line of credit that could be used for the deposit provided you had a job.

Klflopster

We will look into it further ! What would count as Canadian credit history ? Once we have a credit card if we use it monthly and pay it off monthly how long would it be before we are considered to have a good credit rating.....months or years ?

ninaDGBCA

Yep we had an unsecured line of credit on a TWP with Scotia Bank. Actually still have it but are PRs now and therefore could extend it and eventually could tie it to the house, once that is built.

We found Scotia were the easiest to deal with and the most flexible.

We first bought a rubbish old cheap car for cash, then set up mobiles and got a credit card and payed that in full each months which got us a good credit rating very quickly.. After a year we used the old car as a trade in and got a car loan with no extra down no problem.