In YT, what should I know about student borrowers for car loans?

Student borrowers in Yukon, like across Canada, often encounter hurdles when seeking car loans primarily due to a limited or non-existent credit history and typically lower, less stable income streams. Lenders evaluate risk based on creditworthiness, debt-to-income ratio (which can be high with student loans), and employment stability. To improve approval odds and secure better terms, a co-signer with strong credit and stable income is frequently necessary, as they share equal responsibility for the debt. Another effective strategy is providing a larger down payment, which reduces the principal loan amount, lowers monthly payments, and signals greater financial commitment to the lender. Consumers must be wary of offers for excessively long loan terms, such as 84 or 96 months; while these may present lower monthly payments, they drastically increase the total interest paid over the life of the loan and heighten the risk of negative equity as the vehicle depreciates faster than the loan balance. In the current 2025 market, with prevailing interest rate conditions, the cost of borrowing for higher-risk profiles like students is amplified, making it imperative to understand the total financial commitment. For students, establishing a positive credit history through manageable debt is beneficial, but taking on an unaffordable car loan can severely damage their financial future, underscoring the importance of careful budgeting and responsible borrowing.