Can Someone Else Finance a Car for Me?

By: Western Used   |   31 Dec 2017
Stamping a loan approval

Over the years I’ve been asked countless times if someone can finance a vehicle on behalf of another person.

 

It makes sense; a lot of people don’t have a good credit rating, or in some cases, any credit score at all. Students looking to get their first vehicle often don’t have a credit score yet, so financing a vehicle on their own can be difficult. Another common example is an individual who has been through a bankruptcy and needs help from a friend or family member to get a reliable vehicle.

 

So, can someone else finance a vehicle for you?

 

The short answer is yes. It can be quite helpful to have someone else finance a vehicle for you because it allows you to keep your Total Debt-Service Ratio (TDSR) low and rebuild your credit by paying off other debts.
 

"The short answer is yes."


There are generally three basic conditions to meet in order to have someone else finance a vehicle for you:

  1. The insurance company has to be aware that the amount owing (also called a lien) is in someone else’s name.
  2. Lenders usually require that the person taking the loan for you is related to you and usually living at the same address.
  3. Some lenders require that you sign a “Third Party Disclosure” document explicitly stating that the loan is taken out for someone else. In my experience, this doesn’t affect the interest rate or loan amount approved, it’s just a legal requirement for the bank. ​

The last two requirements will vary significantly between different lenders, but if you let me know up front that this is the arrangement you’re looking for, I can connect you with the ones that are easiest to work with. Some of the lenders I work with include TD Auto Finance, Bank of Montreal, CIBC, Royal Bank, Industrial Alliance, Auto Capital Canada, Scotia Dealer Advantage, among others.

 

Your best bet is to send in a finance application via our website. I’ll review your profile and send your application to lenders that are most likely to approve a loan for you. As you may know, every time you send off a credit application your credit report reflects it and multiple applications in quick succession can have a negative effect on your score. A good business manager will carefully review your credit report before sending off your application. A bad one will simply send off your applications to as many lenders as possible and see what comes back.


Thanks for reading and I truly hope this blog was informative and helpful. If you have any finance related questions, I’d love to hear from you— feel free to reach out with your questions anytime.

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