Applying for a car loan is a significant financial decision! Whether you're purchasing a new or used vehicle, proper preparation can make the process smoother and more efficient. Before you apply for a loan or make an offer on a vehicle, consider these important steps to ensure you're financially ready.

Set Your Budget

Establishing a budget early helps prevent you from taking on more debt than you can manage. A good rule of thumb is to allocate no more than 10–15% of your gross annual income toward your car payment.

Sunrise Credit Union’s Loan Calculator can help you estimate your monthly payments based on the vehicle price, interest rate, and amortization period.

Don’t forget to account for taxes! In Manitoba, vehicles purchased at a dealership are subject to 12% tax, which includes the 5% federal GST and the 7% RST (retail sales tax). If you purchase a vehicle from a private seller, you only pay the 7% RST when registering your car.

Update Your Net Worth

Your lender will typically request a net worth statement when you apply for a loan. This document outlines your financial position by subtracting your liabilities from your assets.

Assets include cash, savings, investments, vehicles, real estate, recreational assets, and the cash value of insurance policies.

Liabilities include outstanding loans, mortgages, credit card balances, and lines of credit.

A clear, up-to-date net worth statement helps demonstrate your financial capacity to manage a new loan.

Gather Documentation

To support your loan application, be prepared to provide:

• Proof of income (T4 slips, Notice of Assessment, recent pay stubs, and tax returns)
• Social Insurance Number (SIN)
• Vehicle details (make, model, year, and VIN if available)

Having these documents ready will speed up the approval process.

Get a Pre-Approval Before Going to the Dealership

Getting pre-approved for a car loan through your financial institution gives you a clear picture of your budget and strengthens your position when negotiating with a dealer. A pre-approval outlines the maximum loan amount you're eligible for, based on your financial information and credit.

While it's tempting to borrow the full approved amount, consider choosing a vehicle priced below that limit to give yourself some financial breathing room.

Purchasing a new vehicle is an exciting milestone. With the right preparation, it can also be a financially sound one. Contact a Sunrise Credit Union Lender today to start your auto loan pre-approval and drive away with confidence!