Navigating Auto Financing in PEI: A Guide for Newcomers


You’re new to PEI and not 100% sure whether or not you need a new or used vehicle to help you navigate our small province’s landscape. Well, Township has got you covered! We will outline what it takes to help get you tip-to-tip in our beautiful province and provide you with tips and advice on how to secure your first auto loan in Canada.

Overview of Prince Edward Island (PEI) and Core Cities

Prince Edward Island is broken into 3 counties, these counties are called Prince Country, Queens County, and Kings County. Below, you will see how these counties break up our Island.

If you were to journey across PEI it would take 3-4 hours (when taking the main roads), during that trip, you would pass 4 of PEI’s core cities and towns. These towns (from east to west) include Souris, Charlottetown, Summerside, and Tignish. It’s important to know the distance between these locations as they are commonly referred to when giving directions. Using Summerside as a home base, here is how long it would take to travel to each location.

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PEI and Counties

Using Summerside as a home base, here is how long it would take to travel to each location. There are several other landmarks on Prince Edward Island, however, you can consider these the “core four”.


Importance of Owning a Vehicle for Newcomers

There are several reasons why it is important to have a vehicle in PEI. With PEI’s relatively rural landscape and dispersed communities, having a vehicle provides essential mobility and accessibility. Public transportation options are limited, especially in rural areas, making personal vehicles vital for commuting to work, accessing essential services, and running daily errands. Additionally, PEI’s climate can be harsh, with heavy snowfalls in the winter months, making it necessary to have a vehicle equipped for navigating challenging road conditions. Owning a vehicle in PEI offers the freedom to explore the island’s scenic landscapes, beaches, and charming communities at your own pace, enhancing the overall quality of life.

6 Reasons Why a Newcomer Should Own a Vehicle in PEI

  1. Independence and Flexibility: Owning a vehicle provides you with independence and flexibility in your daily activities without relying on public transportation schedules or the availability of rides from others.

  2. Exploration and Integration: Enables you to explore your new surroundings and integrate into the community more effectively.

  3. Job Opportunities: Having access to a vehicle will expand your job opportunities, as you consider employment options beyond the reach of public transportation routes.

  4. Family and Social Life: If you have a family, a vehicle will enhance your ability to participate in family outings, without having to rely on public transportation.

  5. Emergency Preparedness: In times of emergencies or unforeseen circumstances, such as medical emergencies or severe weather conditions, having a vehicle provides you with a reliable means of transportation to access healthcare facilities.

  6. Convenience and Comfort: Unlike relying on public transportation, owning a vehicle offers you convenience and comfort in your daily commute.

Overall, owning a vehicle significantly enhances your mobility, integration, and overall well-being.


Understanding Auto Financing

As a newcomer, you’ll find that auto financing is a common practice for purchasing vehicles in this country. Auto financing allows individuals to acquire a vehicle by obtaining a loan from a financial institution or dealership, which is then repaid over time with interest. It’s a convenient way to make a large purchase without paying the full amount upfront. Understanding the basics of auto financing, including factors like interest rates, loan terms, and eligibility criteria, can help you navigate the process effectively and find the best option to suit your needs and budget as you settle into life in Canada.

Importance of Credit History and Credit Score

For a newcomer to Canada, building a positive credit history is important for establishing financial stability and accessing various opportunities. A strong credit history demonstrates your reliability in managing credit and repaying debts, which is essential for obtaining loans, like financing a vehicle, securing a mortgage, and even finding employment. It serves as a measure of trustworthiness in the eyes of lenders and financial institutions.

As you begin your journey in Canada, establishing and maintaining good credit habits, such as paying bills on time, keeping credit card balances low, and avoiding unnecessary debt, will not only help you qualify for better financial products and services but also lay a solid foundation for your long-term financial well-being in your new home country. If these actions are followed, it will reflect on your credit score, which is a measurement set by banks to determine your loan eligibility.

If you have yet to build credit, your credit score will be a 0, which is okay! You have to start somewhere. However, if you have been in the country for a little while here is a quick look into what an excellent to poor credit score looks like:

Credit Scores

Keep in mind, credit needs to be built and over time your credit score will grow as long as you make payments on time and follow the steps we have outlined.

Types of Financing Options

As a newcomer to Canada you have several automotive financing options available to you, they are:

  1. Traditional auto loan (most common): This is when the borrower receives a lump sum to purchase the vehicle and repays the loan amount plus interest over a set period.

  2. Dealership financing (less common): This is when the dealership arranges the loan directly with a lender on behalf of the buyer. This option may offer convenience and flexibility in terms of loan terms and interest rates.

  3. Secured loans or co-signing arrangements (somewhat common): With limited credit history sometimes newcomers may explore alternative financing options such as with a co-signer with an established credit score.

Financial Preparation for Auto Financing

If you’re thinking about getting an auto loan here in PEI as a newcomer, there are a few things you’ll want to keep in mind.

  • Building up your credit history is key. You can do this by getting a Canadian credit card, making sure you pay your bills on time, and keeping your credit card balances low. This helps lenders see that you’re reliable when it comes to managing money, which can improve your chances of getting approved for a loan.

  •  It’s a good idea to save up for a down payment (but not always necessary). Putting some money down upfront not only reduces the amount you’ll need to borrow but can also help you qualify for better terms and lower interest rates.

  • Compare interest rate options. You want to find the best terms and rates that fit your financial situation. Some dealerships offer programs with reduced interest rates. For example, we offer reduced rates on our Certified Pre-Owned Program.

  • Budget for all the other costs. Consider other cost of owning a car, like insurance, maintenance, and registration fees. It’s important to make sure you can afford the monthly
    payments along with these other expenses.

By taking these steps and being proactive about your finances, you’ll be in a great position to get that auto loan and start driving around Canada in no time!

Certified Pre-Owned Program’s

At Township, our Certified Pre-Owned (CPO) program offers an exceptional opportunity to drive home in a quality used car with added peace of mind. This program includes:

  • 150+ point inspection
  • Manufacturer’s warranty,
  • 24/7 roadside assistance
  • 30-day exchange privilege

You can trust in the reliability and quality of our certified pre-owned vehicles. Plus, with financing rates as low as 4.99%, taking advantage of our program is not only convenient but also financially responsible.

Tips for Improving Credit

If you are in a situation where your credit score needs to be improved upon, or you need more history built. Here are some tips to help you improve your credit score in Canada.

  1. Get a Canadian credit card: Apply for a Canadian credit card and use it responsibly. Make regular purchases and ensure that you pay off the balance in full and on time each month.
  2. Pay bills on time: Whether it’s rent, utilities, or other bills, make sure to pay them on time. Late payments can negatively impact your credit score.

  3. Keep credit card balances low: Try to keep your credit card balances low relative to
    your credit limit. Aim to use no more than 30% of your available credit at any given time.

  4. Monitor your credit report: Regularly check your credit report for errors or inaccuracies. You can request a free copy of your credit report from the major credit bureaus in Canada.

  5. Avoid opening too many accounts: Be cautious about opening multiple credit accounts within a short period. Each new account can temporarily lower your credit score.

  6. Build a credit history: Establishing a longer credit history can improve your credit score over time. Be patient and consistent with your credit habits.

  7. Consider a secured credit card: If you’re having trouble getting approved for a traditional credit card, a secured credit card may be a good option. With a secured card, you provide a security deposit, which serves as collateral for the credit limit.

  8. Avoid shopping for credit: Applying for several loans in a short period is seen unfavorably in the eyes of financial institutions. It’s important to find the right company to do business with before applying for a loan.

By following these tips and being proactive about managing your credit, you can gradually improve your credit score and strengthen your financial profile in Canada.


Researching Dealerships

When it comes to buying a vehicle in PEI (or anywhere for that matter), it’s important to do some research on which dealership to go with. One of the best ways to start is by checking out online reviews and ratings. Websites like Google Reviews, DealerRater, or even the dealership’s own website can give you insight into other people’s experiences.

Township Google Review DealerRater Review

#1 Rated Dealership on PEI - Township Chevrolet

At Township Chevrolet, we understand the unique needs of newcomers to PEI because we have newcomers working for us too. Our diverse team includes individuals who have gone through the immigration process themselves, giving us firsthand insight into the challenges and questions you may have as you navigate buying your next vehicle in Canada. With our team’s personal experiences and dedication to exceptional customer service, we ensure that you feel welcomed, understood, and supported throughout your car-buying journey. Trust Township Chevrolet to provide you with the guidance, transparency, and assistance you need to make your transition to Canadian roads a smooth and positive experience.


In this guide, we’ve learned that auto financing is less than a click away. We’ve emphasized the importance of vehicle ownership in PEI’s rural landscape and offered the reasons why you want to consider a vehicle on our Island. You’ve learned insights into auto financing basics and credit improvement strategies are provided, along with tips for researching dealerships online.

Township Chevrolet stands out as a top-rated dealership in PEI, offering personalized assistance from a diverse team, including immigrants. Overall, this guide equips newcomers with essential information to navigate the car-buying process and establish themselves in Canada’s automotive landscape.

Securing a vehicle loan for newcomers is now just a few clicks away, start now by reaching out to one of our financial experts!

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