I thought buying a car would be pretty straightforward if you had a job, some savings, and a decent credit score. But then reality hit me like a brick when I spoke to three newcomers who bought cars within their first year in Canada. I expected to hear similar stories, but I got three completely different playbooks. The only thing they had in common was figuring out how to convince lenders they weren't a risk. Here's how all three managed to get behind the wheel with minimal credit history.
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For Dhruvi, paying cash was the only option
When Dhruvi arrived in Canada in December 2021, buying a car wasn't high on her priority list. At the time, she was still in school and getting ready to start her career. But over the next year, a few things changed. She landed a job that required commuting, her parents were planning a visit, and she and her partner were preparing for a move to Ottawa.
A car quickly went from being a nice-to-have to a need-to-have. There was just one problem- "We were both students," Dhruvi told me. "No lender would give us a car loan because we weren't even on our work permits yet." Instead, they took a route that many newcomers probably don't consider. They bought a used car outright with savings. They did look into financing, but the only realistic option was going through private lenders. The interest rates were high enough that they quickly walked away from the idea.
Looking back, she thinks it was the right decision. Without a car loan hanging over them, they didn't have to worry about monthly payments and also avoided paying thousands of dollars in interest.
That doesn't mean she thinks buying a car with cash is always the right move. Everyone's situation is different. Some people would rather keep their savings invested and make monthly payments instead.
How Gowri fast-tracked his approval in just 7 months
Seven months after arriving in Canada, Gowri was driving a brand-new car. When he arrived in March 2024, a car wasn't at the top of his shopping list. But between job hunting, attending classes, and coordinating schedules with his wife, public transit quickly became a headache. "I felt like having a car would solve a lot of my time constraints," he told me.
By that point, he had already started building credit the way many newcomers do. He paid his phone bill on time, used his credit card regularly, and kept up with his internet payments. His credit score was around 740. The real advantage came from his wife, who had been in Canada since 2021 and had spent years building her credit history. By the time they applied for financing together, her score was above 800.
"We got approved in about 15 to 20 minutes," Gowri told me. Unlike Dhruvi, who found herself priced out of financing altogether, Gowri never ran into major roadblocks. He and his wife put down roughly 15% and structured the loan around a payment amount they felt comfortable with every two weeks.
The biggest challenge for them was figuring out which dealership offered the best financing terms. "There are thousands of options," he said. "You have to sit down and compare them carefully." His credit score took the expected hit after the lender performed a hard inquiry. It dropped to around 690, but today, it's back to roughly 760.
Alan built credit history like a full-time job
When Alan landed in Canada in October 2021, he already knew that if he wanted to buy a car anytime soon, he'd need to build a Canadian credit history as quickly as possible. At first, that wasn't easy. His student credit card came with a limit of just $500, but he used it anyway to pay for groceries, daily expenses, and random purchases. Almost everything went on the card. And he didn’t wait for the due date to pay the bill; as soon as the charges were posted, he'd pay the balance off.
Six months later, when he finished his master's degree and landed a job that involved visiting vendors across the GTA, he realised he needed a vehicle for work. At the time, he had a decent credit score, somewhere around the high 600s or low 700s, but only a few months of Canadian credit history, so financing wasn't an option. "I had the score, but I didn't have the history," he said. So, Alan ended up leasing.
Because his file was so new, he was also required to put money down on the vehicle, instead of getting a zero-down offer.
His advice for newcomers is simple: use your credit card. "I've seen a lot of people only use their debit card because they're scared of credit," he said. "But if you don't use credit, your credit isn't going to grow."
Would any of them do anything differently today?
One of my favourite questions to ask during interviews is what people would do differently if they could go back and do it all over again.
For Dhruvi, the answer was leasing. When she bought her used car, paying cash made the most sense. Financing wasn't realistic, and private lenders were charging interest rates that didn't feel worth it. But now that she's more established in Canada, she says she'd probably explore leasing instead of paying the full amount upfront.
Gowri's biggest change has nothing to do with credit scores or financing. It's the car itself. "If I were buying a car today, I'd lean more toward an EV," he told me. When he bought his vehicle, he was focused on getting approved and finding something that fit his budget. A few years later, he's become much more aware of the costs that show up after you leave the dealership. Fuel, maintenance, insurance, and everyday operating costs can add up quickly.
Alan, meanwhile, wouldn't change much at all. His strategy was simple. Build credit, get approved, and lease a vehicle that fits his needs. Looking back, he still thinks it was the right move.
What every newcomer should know before buying a car
After the interviews, I realised there isn't a single "newcomer playbook" for buying a car, but their advice was surprisingly similar. The best option depends on where you are financially, how badly you need a car, and what you're willing to spend once the excitement of getting the keys wears off.
- Make sure you actually need a car- All three pointed out that owning a car in Canada is expensive. Before signing any paperwork, think about whether public transit can meet your needs.
- Start building credit immediately- Alan's biggest piece of advice was to start using a credit card as soon as you arrive. Even a few months of responsible credit use can make a difference when it's time to apply for financing.
- Don't buy more than you need- Dhruvi recommends focusing on reliability over luxury, especially during your first few years in Canada. A car's job is to get you from Point A to Point B.
- Shop around before accepting a financing offer- Gowri said one of the hardest parts of the process was comparing dealerships and financing options. The first offer isn't always the best one.
- Think beyond the sticker price- Fuel, insurance, maintenance, parking, and repairs can add hundreds of dollars to your monthly costs. The price of the car is only part of the equation.
