A car loan calculator helps you estimate the monthly payment, total interest, and overall cost of financing a vehicle purchase in Canada. Whether you are buying new or used, this tool accounts for the vehicle price, down payment, trade-in value, interest rate, loan term, and provincial sales tax so you can see exactly what the car will cost before you step into a dealership.
How this car loan calculator works
Enter the vehicle price, your down payment, any trade-in value, the interest rate, your preferred loan term, and your province. The calculator instantly shows your monthly and bi-weekly payment along with a complete cost breakdown including sales tax, total interest, and the total amount you will pay over the life of the loan.
Key inputs:
- Vehicle price — The sticker price or negotiated purchase price
- Down payment — Cash you pay upfront to reduce the loan amount
- Trade-in value — The value of your current vehicle applied to the purchase (reduces the taxable amount in some provinces)
- Interest rate — The annual percentage rate offered by your lender
- Loan term — The number of months over which you will repay the loan (36 to 96 months)
- Province — Determines the applicable sales tax rate (GST, HST, or GST + PST)
How much car can you afford?
A common guideline is the 20/4/10 rule: put at least 20% down, finance for no longer than 4 years, and keep total vehicle expenses (loan payment, insurance, gas, maintenance) under 10% of your gross monthly income.
If you are unsure how much car you can afford based on your income, use our car affordability calculator to find the maximum vehicle price that fits your budget.
Average car loan rates in Canada (2026)
| Credit Score | New Car Rate | Used Car Rate |
|---|---|---|
| Excellent (750+) | 4.99–6.49% | 6.49–8.49% |
| Good (700–749) | 5.99–7.99% | 7.49–9.99% |
| Fair (650–699) | 7.99–10.99% | 9.99–13.99% |
| Poor (below 650) | 10.99–19.99% | 14.99–24.99% |
Rates vary significantly between banks, credit unions, dealership financing, and online lenders. Always get pre-approved with at least two or three lenders before shopping so you have leverage to negotiate.
Provincial sales tax on vehicles
| Province | Tax Rate | Applied To |
|---|---|---|
| Alberta | 5% GST | Purchase price |
| British Columbia | 12% (GST + PST) | Purchase price |
| Ontario | 13% HST | Purchase price |
| Quebec | 14.975% (GST + QST) | Purchase price |
| Nova Scotia | 15% HST | Purchase price |
| Manitoba | 12% (GST + RST) | Purchase price |
| Saskatchewan | 11% (GST + PST) | Purchase price |
In some provinces, the trade-in value reduces the taxable amount. For example, in Ontario, if you buy a $40,000 car and trade in a vehicle worth $10,000, you only pay HST on $30,000.
Short vs long car loan terms
36-month loan
- Highest monthly payment
- Lowest total interest
- Build equity quickly
- Best for buyers who want to minimize financing cost
60-month loan
- Moderate monthly payment
- Reasonable total interest
- The most balanced option for most buyers
84-month loan
- Lowest monthly payment
- Highest total interest
- Risk of negative equity
- Only consider this if you plan to keep the vehicle long-term and the interest rate is competitive
Example: On a $35,000 car loan at 6.49%:
- 36 months: $1,073/mo, $3,615 total interest
- 60 months: $684/mo, $6,017 total interest
- 84 months: $518/mo, $8,501 total interest
Tips for getting the best car loan rate in Canada
- Check your credit report — Review your Equifax and TransUnion reports for errors before applying. A small correction could boost your score.
- Get pre-approved — Apply with your bank, credit union, and at least one online lender before visiting dealerships.
- Negotiate the purchase price first — Never discuss monthly payments with the salesperson until you have agreed on a purchase price.
- Make a larger down payment — More money down means a smaller loan and better rates.
- Choose a shorter term — Lenders often offer lower rates on shorter terms (36-48 months vs 72-84 months).
- Consider a credit union — Credit unions often offer lower rates than the big banks on auto loans.
How to reduce total interest on a car loan
- Bi-weekly payments — Paying bi-weekly instead of monthly results in 26 half-payments per year (equivalent to 13 monthly payments instead of 12), reducing your loan term and total interest.
- Lump-sum payments — Apply any windfalls (tax refund, bonus) directly to your principal.
- Refinance — If rates drop or your credit improves, refinancing to a lower rate can save thousands.
Related calculators
- Car Affordability Calculator — Find the maximum car price you can afford based on your income
- Lease vs Buy Calculator — Compare the total cost of leasing vs buying a vehicle
- Salary Calculator — Calculate your after-tax income to plan your car budget
- Budget Calculator — See how a car payment fits into your overall budget
- Debt Payoff Calculator — Create a plan to pay off your car loan faster
- Loan to Value Calculator — Understand loan-to-value ratios