Car loan rates in Canada vary more by lender type and credit score than by almost anything else. Banks, credit unions, dealers and online lenders each have advantages depending on your credit and the car, and a used car usually costs more to finance than a new one. This page compares car loan rates by lender and by credit score, how the term changes the total cost, and options for bad credit and refinancing. It is part of the personal loans, lines of credit and car loans hub.
Car Loan Rates by Lender Type
New Vehicle Financing
| Lender | Rate Range | Term Options | Pre-Approval? | Typical borrower |
|---|---|---|---|---|
| Manufacturer promotion | 0–3.99% | 24–84 months | No, dealer only | New car buyers (selected models) |
| Meridian Credit Union | 5.49–6.99% | 12–84 months | Yes | Ontario credit union members |
| Coast Capital | 5.49–7.29% | 12–96 months | Yes | BC credit union members |
| Vancity | 5.49–7.49% | 12–84 months | Yes | BC members |
| Desjardins | Not published: individualized quote based on credit, vehicle and term | 24–96 months | Yes | Quebec residents |
| TD Auto Finance | Not published: individualized quote based on credit, vehicle and term | 12–96 months | Yes | TD banking customers |
| RBC | Not published: individualized quote based on credit, vehicle and term | 12–84 months | Yes | RBC customers |
| BMO | Not published: individualized quote based on credit, vehicle and term | 12–96 months | Yes | BMO customers |
| Scotiabank | Not published: individualized quote based on credit, vehicle and term | 12–84 months | Yes | Scotiabank customers |
| CIBC | Not published: individualized quote based on credit, vehicle and term | 12–84 months | Yes | CIBC customers |
| National Bank | Not published: individualized quote based on credit, vehicle and term | 12–84 months | Yes | Quebec and Atlantic customers |
| Dealer standard (non-promotional) | Varies by dealer and manufacturer | 12–96 months | No | Convenience |
Used Vehicle Financing
| Lender | Rate Range | Max Vehicle Age | Max Term | Typical borrower |
|---|---|---|---|---|
| Credit unions (local) | 5.99–8.49% | 10–12 years | 72–84 months | Members buying used |
| TD Auto Finance | Not published: individualized quote | 8–10 years | 72 months | TD customers |
| RBC | Not published: individualized quote | 8 years | 72 months | RBC customers |
| BMO | Not published: individualized quote | 10 years | 84 months | BMO customers |
| Scotiabank | Not published: individualized quote | 8 years | 72 months | Scotia customers |
| CIBC | Not published: individualized quote | 8 years | 72 months | CIBC customers |
| Online used-car sellers (e.g., Clutch, Canada Drives) | Varies by lender and credit profile | Varies | Up to 84 months | Buying a used car online |
| Dealer (used lot) | Varies by dealer | Varies | 72–84 months | Convenience |
| Subprime lenders | High, up to the 35% APR legal maximum | Varies | 72–84 months | Bad credit |
Rates vary by credit score, down payment and vehicle. The legal maximum is the federal criminal interest rate, explained on bad credit loans.
How the Loan Term Changes the Total Cost
$30,000 vehicle at 7.49% interest:
| Loan Term | Monthly Payment | Total Interest Paid | Total Cost |
|---|---|---|---|
| 36 months | $933 | $3,590 | $33,590 |
| 48 months | $725 | $4,811 | $34,811 |
| 60 months | $601 | $6,060 | $36,060 |
| 72 months | $519 | $7,336 | $37,336 |
| 84 months | $460 | $8,640 | $38,640 |
A 7-year loan costs $5,050 more in interest than a 3-year loan on the same vehicle.
| Factor | Short Term (36-48 months) | Long Term (72-84 months) |
|---|---|---|
| Monthly payment | Higher | Lower |
| Total interest | Much less | Much more |
| Equity position | Builds equity faster | Risk of negative equity |
| Insurance | Can drop optional coverage sooner | Lender-required coverage for longer |
| Refinancing | Easier | Harder if you owe more than the car is worth |
Car Loan Rates by Credit Score
Your credit score usually moves your car loan rate more than any other factor.
| Credit Score | Expected Rate (New) | Expected Rate (Used) | Approval Odds | Notes |
|---|---|---|---|---|
| 760+ (excellent) | 5.49–6.99% | 6.49–7.99% | Very high | Strongest negotiating position |
| 700–759 (good) | 6.49–7.99% | 7.49–9.49% | High | Worth comparing several lenders |
| 660–699 (fair) | 7.99–9.99% | 9.49–12.99% | Moderate | A larger down payment helps |
| 600–659 | 9.99–14.99% | 12.99–19.99% | Moderate to low | A co-signer can help |
| Below 600 (poor) | 14.99–29.99% | 14.99–29.99% | Subprime lenders | Waiting to rebuild credit can save thousands |
The gap between two rows is roughly what moving up one band is worth. The score factors that change fastest are on-time payments over three to six months, card balances below about 30% of their limits, few new credit applications, and errors corrected on your credit report. The score lenders look for is covered in what credit score you need for a car loan, and how the loan then affects your score in does a car loan help your credit score.
Comparing Lender Types
Bank Car Loans
The Big Five banks (TD, RBC, BMO, Scotiabank, CIBC) are convenient for existing customers, with online applications, pre-approval and easy automatic payments. Their rates are often 0.5 to 1 point above credit unions’, their approval criteria stricter, and there is less room to negotiate.
Credit Union Car Loans
Credit unions often quote rates 0.5 to 1 point under the banks’, can be more flexible on approval and may negotiate. You must be a member, some loans need an in-person visit, and some credit unions cap loan sizes.
| Credit Union | Region |
|---|---|
| Meridian | Ontario |
| Coast Capital | BC |
| Vancity | BC |
| Servus | Alberta |
| Steinbach | Manitoba |
| Connect First | Alberta |
Dealer Financing
Dealers arrange loans through manufacturers’ finance arms and through banks, and only a dealer can offer a manufacturer’s 0% promotion on a new car. Outside those promotions, dealer rates can be marked up above what the lender charges, and the finance office is where add-on products get sold. Comparing a 0% offer with taking the cash rebate and borrowing elsewhere is worked through in how to finance a car in Canada, and the add-ons to question in how to negotiate a car price.
Online Lenders
| Lender | Rate Range | Notes |
|---|---|---|
| Canada Drives | Varies by lender and credit profile | Fast online approval |
| Clutch | Varies by lender and credit profile | Financing when buying used cars online |
| Loans Canada (marketplace) | 9.99% up to the legal maximum | Compares several lenders, including bad-credit options |
Online lenders are convenient and approve quickly, and many accept weaker credit. Their rates are often above banks’ and credit unions’, some charge fees, and some are referral services rather than lenders.
Getting Pre-Approved
A pre-approval from a bank or credit union gives you a rate to compare with the dealer’s and lets you negotiate the car’s price separately from the financing. Some lenders show an estimated rate after a soft credit check, which doesn’t affect your score; a formal application is a hard inquiry. The steps, documents and timing are in how to finance a car in Canada.
How Much to Spend
The car payment is only part of the cost: insurance, fuel, maintenance, registration and parking can match it. How much car fits a given income, including the 20/4/10 rule, is covered in how much to spend on a car, and the running costs in the cost of owning a car.
Car Loans for Bad Credit
With a score below 600, financing is still possible, at a much higher cost.
| Lender Type | Rate Range | Pros | Cons |
|---|---|---|---|
| Subprime dealers | 14.99-29.99% | High approval rates | Very high rates |
| Bad-credit specialists | 12.99-24.99% | Sometimes better terms than dealers | Still expensive |
| “Buy here, pay here” lots | High, up to the legal maximum | Approval almost guaranteed | Very expensive, with repossession risk |
| Approach | How it helps |
|---|---|
| A larger down payment (20% or more) | Reduces the lender’s risk and may lower the rate |
| A co-signer | Their credit can qualify you for a better rate, and they take on the debt if you don’t pay |
| A cheaper vehicle | A smaller loan is less risk for the lender |
| A credit-builder loan first | Builds credit before the car loan |
| A secured loan against savings | Lower rate where you have savings to pledge |
| Waiting 6 to 12 months while rebuilding credit | Can move you up a rate band |
| Warning sign | Why it matters |
|---|---|
| “No credit check” offers | Usually mean rates of 25% or more |
| Weekly payment plans | Hide the true cost and effective rate |
| Very long terms (84 months or more) | Large interest cost and near-certain negative equity |
| GPS tracking or starter-interrupt devices | A common feature of predatory lending |
| No cash price disclosed | May hide a high markup |
Refinancing a Car Loan
Refinancing can lower the rate on a high-rate loan once your circumstances improve.
| Situation | Potential benefit |
|---|---|
| Credit score up 50 points or more | May qualify for a rate 2 to 4 points lower |
| Market rates have fallen | Moves the loan to a current rate |
| Paying 10% or more | Large savings possible |
| Started with a bad-credit loan | May now qualify for a better tier |
| Requirement | Typical criteria |
|---|---|
| Time owned | Usually 6 to 12 months minimum |
| Equity position | Owe less than the vehicle is worth |
| Vehicle age | Usually under 8 to 10 years |
| Mileage | Usually under 150,000 to 200,000 km |
| Credit score | Usually 650 or more for good rates |
Refinancing a $20,000 balance with 48 months left:
| Factor | Current loan | Refinanced loan |
|---|---|---|
| Rate | 14.99% | 8.99% |
| Monthly payment | $557 | $498 |
| Total remaining interest | $6,713 | $3,885 |
| Interest saved | $2,828 |
Check the current loan for a prepayment penalty and the new one for fees before comparing. The payment on any amount, rate and term, with sales tax and a trade-in, is in the car loan calculator.