What documents do I need for car loan approval in Canada?

Securing car loan approval in Canada typically requires a comprehensive set of documents to verify your identity, financial stability, and the vehicle itself. You'll need valid government-issued identification, most commonly a Canadian driver's license, to confirm your identity and legal age for entering a contract, which is a fundamental requirement for all financial institutions. Proof of income is paramount; lenders, especially in the current tighter market conditions heading into 2025, require recent pay stubs (typically 2-3 months), T4 slips, or a formal Letter of Employment to assess your repayment capacity and stability. For self-employed individuals, expect requests for your last two to three years of Canada Revenue Agency (CRA) Notices of Assessment (NOA) and full T1 General tax returns, along with recent business bank statements, to demonstrate consistent income and mitigate perceived risk. You'll also need proof of residence, such as recent utility bills or a lease agreement, to confirm your current address for credit checks and lender communication, which can have provincial nuances in consumer protection. Before taking possession, a valid insurance policy with collision and comprehensive coverage, naming the lender as an additional insured, is a mandatory provincial requirement across Canada and protects the collateral. Finally, details on the vehicle itself, including the Bill of Sale or Purchase Agreement and its Vehicle Identification Number (VIN), are essential for the lender to register their lien with the provincial registry and finalize the loan. Providing these documents promptly and accurately streamlines the approval process, demonstrating your reliability and ability to meet your financial obligations.