Leasing a car
 

Can anyone tell me if my lack of credit rating in Canada on my arrival will prevent me from buying a car on a lease basis? Are there any dealerships or brands that are better than others at considering UK ex pats with good uk ratings but new to Canada?

Thanks

Julie

Re: Leasing a car
 

As far as I remember from when I was buying a car, a lack of credit rating would prevent you from leasing - sorry! :(

Re: Leasing a car
 

and if it didn't you would probably end up with a huge interest rate that would make it not worth bothering.

Re: Leasing a car
 

Buying and leasing are two differnt things. In essence if you lease you are basically renting the vehicle for a specified period. When the lease expires you return the vehicle. At thet time you can exercise the option to buy. Either way you a subject to credit checks.

Re: Leasing a car
 

When we arrived in Victoria back in June 2006, we did not have any north american credit rating (they won't take your UK rating into account, good or bad) and we did get to lease a car. The dealership was connected to Ford. What we had to put down though was a security deposit - their finance guy (the whole experience was like something out of the film Fargo!) basically said that he'd managed to cut us a deal to get our security deposit down from $3000 to $1500. So it was possible, now, with the credit crises etc., I'm not sure if leasing companies will have made any changes to their policies. However, I know that car dealerships are desperately trying to get rid of stock. They often advertise stating things like: "good credit, bad credit, it doesn't matter we've got the best deals ever...etc. etc. etc."
So you may find that they will be willing to lease you a car without a credit rating, but do expect to be asked to put down a security deposit.

Re: Leasing a car
 

[QUOTE=Nibbles2005;7215577]Can anyone tell me if my lack of credit rating in Canada on my arrival will prevent me from buying a car on a lease basis? Are there any dealerships or brands that are better than others at considering UK ex pats with good uk ratings but new to Canada?

Hey there, we came here 4 years ago with no credit rating etc so had to purchase everything with cash and it ate away at all the money we came over with from the UK. This included the purchase of 2 vehicles - nothing special (chevvy venture and chevvy astro cargo commerical) and even though we had 20 years no claims in the UK each we were classed as new drivers here so were paid $850 a MONTH for 6 months for insurance!! It has eventually gone down but took a big chunck of our savings.

so good luck vehicle prices are amazing at the moment so you might be better buying something but if you are in downtown TO do you really need transport??

Julia x

Re: Leasing a car
 

Many dealers will do "in-house credit". I got a new Ford Expedition on an in-house lease within 3 weeks of arriving on a work permit which initially only had 10 months to expiry. That was back in 2003 though. I was amazed.

If you are on a work permit your SIN number is distinct from a permanent resident and this can make credit harder though not impossible (as my case demonstrates). It all depends how desperate the dealer is...

Watch out for lease deals. There are at least two types of lease in Canada. In many cases the one they try and push os the one where you, as the lessee, guarantees the final value of the vehicle to the lessor. This can leave you with a big bill if the vehicle depreciates more rapidly than anticipated. This type of leasing is slightly cheaper, however, with the secondhand value of vehicles plunging I personally prefer "net leasing" where you can walk away from the vehicle at the end or exercise the option to purchase value fixed at the onset of the lease.

Be careful as Leasing law varies between provinces. For instance, I believe Ontario is less flexible about early termination than BC.

One other way of obtaining a car is taking over somebody else's lease. For instance www.leasebusters.com . This maybe an attractive option. The original lessee will continue to guarantee that payments are met, and this maybe an option. You can also get a reduced payment / shorter term, some transferors are even willing to give you cash to take over he lease. I have been tempted but I have never tried it.

Hope it helps. This is my understanding and I don't guarantee what I have said is correct.

Re: Leasing a car
 

Great lease buster link thanks

Re: Leasing a car
 

Even with Leasebusters you will be subject to a credit check. Things have changed in the last year or so. Up to 2008 the North American manufacturers offered very attractive lease deals to almost anyone (some said it was the only way they could sell their vehicles). However, with credit being so difficult to obtain these days they had to drop this. It is one of the reasons why GM and Chrysler are in so much trouble.

In general, credit to buy or lease a vehicle is much harder to get now than it was a year or two ago. It is not impossible, but more difficult and more expensive for a newcomer. Be very wary of dealers who offer credit to anyone, regardless of their credit rating. The only reason they can do this is that their interest rates are so high they can afford for a few people to default.

I would seriously consider buying a wreck that will get you around for six months while you build up a credit rating. You can get one for less than the security deposit you would have to put down on a lease. One of the better aspects of Canadian culture is that vehicles are seen as a necessity, not a status statement. Nobody will give a toss what you drive.

Re: Leasing a car
 

We arrived in Calgary in October 08.
At that time Ford Agreed a 6yr Finance Deal and Toyota agreed a 4 yr lease with downpayment ,we went with toyota. Both on Brand new cars.

With no Canadian Credit we had to pay a decent size down payment but that made the monthly lease payments lower than if we had of had no downpayment.

Re: Leasing a car
 

Further to the aboe Interest Rate Competitive and when the lease runs out we have a number of options but one is hand the vehicle back and walk away with no lump sum to pay.

Re: Leasing a car
 

If it has under the specified mileage and is in fit condition.

Re: Leasing a car
 

dbd is correct. Those who are interested in leasing cars must check the terms carefully, especially wrt the specified mileage. Newcomers to North America frequently underestimate how much driving they will have to do, particularly if they have school-age kids.

Re: Leasing a car
 

It can still make sense to lease rather than buy, factors suggesting leasing:

- self employment, in which case the tax break may be better on a lease

- newly arrived, uncertain about a long term commitment to a brand

- whimsical purchaser, if you're the sort of person who changes cars every three years anyway you may as well lease.

The reason I say leasing is a brand commitment is that, if you return the car over the allowed mileage and take another lease from the dealership they may forgive the excess, if you switch brands they won't.

Re: Leasing a car
 

I leased on arrival on my work permit...large security deposit and 8% interest rate. Not the best deal, but at least I had my new Jeep. That deal (11 years ago now) was no doubt lubricated by my being employed and willing to leave a couple of grand with them.

Nowadays they may be more circumspect, but on the other hand they are heavily motivated to shift metal too.

Our current car is leased too, the available rate was a lot more competitive now and it made sense to lease for three years and buy at the residual value with cash, than it did to spend that cash now on an older vehicle with unknown history. And if it turns out yet to be a Lemon we can just walk away. Typically I would say buy used and avoid the depreciation hit, but we wanted a Civic and there are no good used deals to be found.

You need to look carefully at the deals though...as a newcomer with no history it will likely not be the most cost effective answer available, but if you have a job, it could put your bum in a new car for a manageable monthly payment... although you will have nothing to show for it at the end of the term.