In ON, what should I know about income verification for car loans?

In Ontario, robust income verification is a cornerstone of car loan applications, particularly in the cautious 2025 lending environment where lenders are prioritizing responsible lending practices. For traditionally employed individuals, lenders will typically request your two to three most recent pay stubs and an official employment letter confirming your position, start date, and annual salary. This documentation is crucial for verifying stable income and assessing your consistent ability to meet repayment obligations. Self-employed applicants face a more comprehensive review, generally needing your last one to two years of Notices of Assessment (NOA), detailed business financial statements, and personal and business bank statements covering three to six months to demonstrate consistent income and business viability. For those relying on pension, disability, or other government benefits, official statements and direct deposit confirmations will be required. This thorough verification process is paramount for lenders to accurately assess your creditworthiness and mitigate risk, directly influencing your loan approval chances and the interest rate you'll be offered. Being fully prepared with accurate and complete documentation not only streamlines your application but also enhances your credibility, potentially securing more favourable financing terms in a competitive market.