How Long Does it Take to Buy a Car? | Finder Canada (2023)

How long does it take to buy a car and how long does finance approval take? Car loan approval times vary depending on which type of lender you get financing from. You can speed up the application and approval process by selecting a lender that offers car loan instant approval or same-day approval. Find out which lenders offer the fastest car loan approval times and apply today to get auto financing.

How long does finance approval take for a car?

It can take as little as a few minutes and as long as a few days to get approved for a car loan from start to finish. Your car loan approval time will vary based on a number of factors. These can include the type of lender you choose, the amount you need to borrow and your creditworthiness.

Is there a difference between pre-approval and full approval?

Yes. Pre-approval tells you how much you can borrow and at what interest rates, but it doesn’t give you access to funding. Instead, it lets you shop around for vehicles with a set price in mind. Once you find a car, you can then go through an expedited process to get financing from your lender by submitting an application for full approval.

How long does the car loan application and approval process take?

Here’s an idea of approximately how long you can expect each step in the application and approval process to take:

  • Submitting your application. It usually only takes 10 to 15 minutes to complete an online application. If you need to visit a lender in person, you’ll need to reserve at least a few hours.
  • Immediate response. Some lenders offer instant car loan approval through a streamlined pre-approval process. This means you’ll know how much you qualify to borrow as soon as you submit your application (though it could take a bit longer to actually access financing).
  • Full approval. Car loan approval times can differ among lenders, but generally you can expect the process to take between a few hours to a few days. This is assuming that there are no unexpected delays and your application isn’t overly complex.
  • Loan funding. After receiving full approval for your car loan from your lender, you can generally expect to receive your funds within one and three business days. That said, you’ll want to check in with your lender directly to confirm your own unique car loan approval time.

How long does it take to get pre-approved for a car loan?

Car loan pre-approval usually takes the same amount of time as it takes to get full approval and the application process can be less intense. Getting pre-approved in advance allows you to lock in your rates with a lender before you commit to a loan.

This gives you the freedom to shop around for a vehicle knowing exactly how much you’re eligible to borrow and at what interest rates.

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How long will it take my lender to finalize my loan?

There are four main types of lenders: online lenders, banks, credit unions and dealerships. Each type of lender will have a different car loan approval time.

The information below is an assessment of car loan approval times for each type of lender:

Type of lenderCar loan approval time
Online lendersOne business day to a week
Banks and credit unionsOne business day to a few weeks
DealershipsThe same day to a few business days

Online lenders

Online lenders tend to have a relatively quick car loan approval time for pre-approvals. If you apply during business hours, you may see a response on the same day or within a few hours. However, your lender won’t be able to fully approve your loan without first receiving documentation showing your proof of income, employment and citizenship.

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This could take a few days to process, and it may take one to three business days for your funds to actually show up in your account. From start to finish, it can take up to a week to receive a car loan from an online lender.

Banks and credit unions

The car loan approval time you’ll get with banks and credit unions varies based on the institution. Some have quick online applications with a similar car loan approval time to online lenders. Others follow more traditional car loan approvals and require you to visit a branch, fill out forms and wait for days to get your money.

Since your car loan approval time will vary based on your provider, make sure to speak to the lender you choose directly to see how long it might take to process your application.

Dealership financing

How long does it take a dealership to find financing? Your car loan approval time for dealership financing can be as fast as the same day, but it comes with a caveat: The loan you walk out the door with may not be fully approved. Spot delivery, also called spot financing, is when your dealer allows you to drive off the lot before the financing is in place for your car.

If you don’t have good to excellent credit and a strong income, but have taken advantage of spot delivery, you might have to renegotiate your loan — usually for a less optimal rate — or else return your car.

This is commonly referred to as “yo-yo financing” because the dealer promises you one monthly payment or interest rate, then raises the rate if an agreeable lender can’t be found (which happens frequently).

Make sure your purchase agreement doesn’t say that your loan is “subject to approval.” If so, you may experience unexpected delays and the car loan instant approval time you were promised may not work out.

How can I get instant car loan approval for bad credit?

If you have bad credit and need a car loan as soon as possible, you may be able to get the fastest turnaround with online lenders. It might not be possible to get instant car loan approval for bad credit, but many online lenders aim for pre-approval within minutes and you may even be able to get full approval within 24 to 72 hours.

Just be aware that you should watch out for online providers that advertise instant car loan approval for bad credit since it could be a scam. This is why you should only shop for car loans with reputable lenders that have solid online reviews or have been vetted by comparison sites like Finder.

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What can slow down my application?

Avoid these three pitfalls if you want to reduce your car loan approval time:

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  • Not submitting all required documents. Lenders can only fully approve your loan once all the required documents have been received. If your lender is waiting on proof of income or residence, it could hold up your application. To speed up the process, check what documents are required and have them on hand before you apply.
  • Applying late in the day. Some lenders can offer same-day approval if you apply by a certain time, usually by the end of the business day. If you apply outside of business hours or on a weekend or a holiday, your application may take longer.
  • Not providing enough info about your vehicle. Your lender may require you to submit information about your vehicle before it releases funds, especially if the car is being used as collateral to secure your loan. Make sure your dealer sends this information to your lender as soon as possible to speed up your car loan approval time.

Other factors to consider when getting a car loan

  • APR. Your annual percentage rate (APR) includes both interest and fees. It’s the easiest way to compare the cost of car loans with similar terms.
  • Down payment. Your lender may require you to have between 15% and 20% saved up before they approve you for financing.
  • Loan term. You may want to choose a short-term loan to save money on interest, or go with a longer term loan if you want to lower your monthly payments.
  • Availability. Many lenders have restrictions on which cars they will finance (for example, some won’t finance used vehicles). Make sure your lender is willing to give you financing for the vehicle you want.

Bottom line

If you’re wondering how long it takes to buy a car, your car loan approval time will vary depending on which lender you take out financing with. Most lenders don’t offer instant car loan approval, but you should be able to get financing within a couple of hours or days. You can also choose to get pre-approved for financing so that you’ll already have money lined up to spend when you decide on a vehicle.

Frequently asked questions

  • You’ll typically have to wait between a day and a week to get approved for a car loan with most online lenders. You may have to wait several weeks to get approved if you submit your application with a bank or credit union.

  • You can get approved for a car loan from a dealership on the same day that you find a vehicle you want. Just make sure that your interest rates are locked in and your loan contract is set in stone before you sign on to dealership financing. You may also want to compare interest rates with other lenders since you could end up paying way more with your dealer.

  • You usually won’t be able to get instant approval for a car loan unless you apply directly with a dealership for financing. Getting instant car loan approval with a private lender or bank is usually not possible, unless you’ve already been pre-approved.

  • Typically, no. You’ll almost always have to go through a regular approval process to get a car loan with bad credit (which will typically take at least a few hours or even days). You should avoid lenders advertising instant car loan approval for bad credit as they may be fraudulent.

  • Some banks approve car loans on weekends if you make an appointment and their financing team is in-house. It really depends on the bank and whether you’ve already got some form of pre-approval in place.

  • You’ll usually need to verify your identification and provide proof of employment and a steady income. You can do this by submitting documents such as your ID, employment letters, pay stubs and tax returns. You may also be required to provide proof of address and citizenship or permanent residency.

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How long does it take to get approved for car loan Canada? ›

Altogether, it typically takes two or three appointments over the span of three-to-seven days or more to get car financing at a bank. It can take even longer to get approved for a bank loan if your credit is less than perfect. If you have bad credit, the banks will often decline your credit application.

How long does it take to get an answer for a car loan? ›

Dealerships: will generally approve loans the same day, although it could take a few business days. Banks and credit unions: can take anywhere from one business day to a few weeks to approve a loan depending on whether you're a new customer and their loan backlogs.

Why does car financing take so long? ›

In most cases with other dealerships, the financing process is what takes so long. The salesperson has to send the finance application off to a variety of banks to get you approved and then they only approve you on a certain car within a certain price range. There's really not much negotiation with that.

What is the best month to buy a car in Canada? ›

Best month to buy a car

The end of the month is a good ballpark, but if you're looking for the months with the best deals, we recommend October, November or December. These are the most discounted months of the year since dealerships are trying to clear out the past year's stock before bringing in new inventory.

How hard is it to get a car loan in Canada? ›

In general, lenders require borrowers to have a monthly income of at least $1,800 - $2,000 before taxes. If your income is lower than that, you should consider getting a better-paying job before applying for a car loan. Additionally, there are other ways to increase your chances of getting approved.

What credit score is needed for a car Canada? ›

Auto-loan lenders look for a borrower with a credit score in the mid-600s in Canada. A credit score between 630 and 650 is generally what lenders want to see.

How often do people get denied car loans? ›

And for the full year, the average rate of car-loan rejections was 7.1%, up from 6.1% for 2018, even through applicants reported fewer denials in other parts of the record $14 trillion consumer debt market for the same 12-month period.

Is it hard to get denied a car loan? ›

Typically, sometimes, they won't even qualify for financing, so they're shut out from getting the car they want.” The Fed said the average reported probability that an auto loan application will be rejected increased sharply to 30.7%, the highest level since the Fed started collecting this data in 2013.

How long does it take to hear back about loan approval? ›

Getting approved for a personal loan generally takes anywhere from one day to one week. As we mentioned above, how long it takes for a personal loan to go through depends on several factors, like your credit score. However, one of the primary factors that will affect your approval time is where you get your loan from.

Why does it take 3 hours to buy a car? ›

At the same time the dealership has to obtain a credit report, evaluate the trade-in, detail the new vehicle and prepare all the necessary paperwork. These can all add up to an average of 3 to 4 hours of the customer's time.

What is the most time you can finance a car? ›

Most auto loans are available in 12-month increments. You can typically find lenders offering loan terms that are 24, 36, 48, 60, 72, and 84 months long. However, longer and shorter loan terms are also available from certain lenders.

What is the longest time for a car loan? ›

People are able to get up to 10 years maximum for a car loan term. This would allow them to set a low monthly payment, but interest costs may be higher than average. Still, finding car loans within a 10-year period is only offered by specialized lenders.

At what salary should you buy a car in Canada? ›

Ideally, your car payments should be no more than 10% to 15% of your annual income based on this budgeting strategy. For instance, if you earn $50,000 per year, your car payments shouldn't exceed $5,000 to $7,500 per year. This means your monthly budget for car payments would range between $416 to $625.

Will car prices in Canada go down? ›

Used vehicle prices across Canada are starting to decline but remain above historic trend lines, according to a new survey by DesRosiers Automotive Consultants. The automotive consultant said that used vehicle prices continued to moderate in the first half of this year following a spike during the Covid-19 pandemic.

Should I buy a car now or wait until 2023? ›

Americans planning to shop for a new car in 2023 might find slightly better prices than during the past two years, though auto industry analysts say it is likely better to wait until the fall. Since mid-2021, car buyers have been frustrated by rising prices, skimpy selection and long waits for deliveries.

How likely is it to get approved for a car loan? ›

If you have a credit score above 660, you will likely qualify for an auto loan at a rate below 10% APR. If you have bad credit or no credit, you could still qualify for a car loan, but you should expect to pay more.

What's the average car loan in Canada? ›

In 2023, the average car interest rate in Canada is 7.21%. Remember that this is an aggressive loan term, and the car interest rate you get may vary depending on your own financial history.

How long is the average car loan in Canada? ›

Your term length will vary depending on how much you can afford to pay per month, as well as how long you'd like to pay off your loan. The average term length is 72 months.

How does financing a car work in Canada? ›

How does vehicle financing work in Canada? Car financing options in Canada involves a lender extending credit, equal to the vehicle's total cost, to make the car purchase. The car is used as security for the loan to protect lenders from you potentially defaulting on payments.


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