Finance your new ride with a loan from a bank, credit union or online lender.
The average cost of a new car in Canada is over $36,000, while used cars cost around $19,000. If you’re looking to finance another vehicle, you have a few options to consider. While a secured car loan through a bank or online lender typically comes with the most competitive rates, you may be able to secure financing faster by going directly through a dealer.
What are my $30,000 car loan options?
You have a few options when you’re looking to borrow $30,000 for a car loan, including:
- Secured car loans. Secured car loans use the vehicle you’re buying as collateral. Although this means more risk for you — you’ll lose your car if you can’t repay the loan — it typically results in a lower interest rate and better terms. Most car loans will be secured, so these will make up most of your $30,000 car loan options.
- Unsecured car loans. Unsecured car loans work similarly, but you won’t have to use the car you’re purchasing as collateral. You don’t risk losing your car if you’re unable to afford repayments, but you’ll likely have a higher interest rate and less competitive terms. These types of car loans aren’t very common, so you’ll have to do some digging around to find a lender that offers them. And because your car isn’t being used to secure the loan, lenders may require an especially good credit score to ensure that the risk level is manageable.
- Car leases. Rather than buying a new car outright, a car lease allows you to drive one for a select number of years or miles. At the end of your term, you can usually choose to return your car, extend the lease or buy the car outright. Most dealerships offer financing to help you pay for this monthly expense.
- Personal loans. A $30,000 personal loan can also be used to buy a car. If you’re interested in an unsecured option, you likely won’t find as competitive rates as you would with a secured car loan. However, if you want to take out a loan to cover both the cost of a new car as well as other expenses, then a personal loan may suit your needs better.
Where can I find a $30,000 car loan?
From online lenders to financing through a dealership, there are several places to turn to when on the hunt for a $30,000 car loan:
- Bank. Your bank might be the first place you check for a car loan, but don’t stop there. If you have good to excellent credit, compare pre-qualification offers from other banks, too — many don’t require you to hold an account in order to apply for a car loan.
- Credit union. Credit unions are less strict about eligibility criteria, but generally require you to be a member in order to take out a loan. If you’re already part of a credit union, check to see what rates you might qualify for. Or consider your options with other credit unions in your area — some may allow you to apply for membership and a car loan at the same time.
- Online lender. Online lenders may not be your first choice, but they often offer competitive rates — especially if your credit isn’t good enough to qualify for a bank loan. Many lenders will even allow you to add the cost of taxes, titling, registration and other fees into the total amount you borrow.
- Dealership. Nearly every dealership offers financing — usually through the manufacturer or a local bank. You’ll likely be able to get a $30,000 car loan and drive off the lot the same day, but watch out: You may end up spending more on interest with dealership financing than going through an online lender or bank.
Can I afford a $30,000 car loan?
While $30,000 car loans are becoming more common, you’ll still want to consider if this is an amount you can comfortably afford to pay back. Your interest rate and loan term both impact the size of your monthly repayments, which affects the total cost of your loan. Choosing a longer term will help keep repayments lower, but you’ll end up paying more in interest over the life of your loan.
Most car-buying experts recommend dedicating no more than 15% – 20% of your monthly budget toward all car expenses — including your loan payment, fuel costs, insurance premium and regular maintenance.
Popular cars you can buy for around $30,000
Convinced that a $30,000 car loan is right for you? Whether you’re on the hunt for a sports car or truck, you have plenty of options to choose from. Below are the manufacturer suggested retail prices (MSRPs) of some of Canada’s most popular 2019 models. The actual cost you end up paying will depend on where you live, your negotiation skills and any special promotions you qualify for.
|2019 model||Starting MSRP||Body|
|EQ smart fortwo coupe (Smart Car)||$29,050||Mini electric coupe|
|Hyundai Elantra GT N Line, Manual||$27,199||Hatchback|
|Volkswagen Golf Highline||$25,600||Hatchback|
|Toyota Prius AWD-e||$28,990||Hybrid-electric sedan|
|Ford Mustang Ecoboost Fastback||$28,199||Sports car|
|Chevrolet Camaro RWD Coupe ZL1||$29,145||Sports car|
|Honda CR-V||$27,690||Compact SUV (Crossover)|
|Toyota Rav-4 LE-FWD||$27,990||Compact SUV (Crossover)|
|Mazda CX-5 GX||$29,876||SUV|
|Kia Niro EX Premium||$29,695||Hybrid-electric SUV|
|Ford F-150||$28,799||Full-sized pickup truck|
|GMC Canyon SLE/SLT||$27,700||Mid-sized pickup truck|
|Chevrolet Colorado||$27,000||Mid-sized pickup truck|
|Nissan Frontier||$24,498||Mid-sized pickup truck|
|Dodge Grand Caravan SXT Premium Plus||$29,190||Minivan|
How to compare $30,000 car loans
When you’re sorting through $30,000 car loan options, keep these features in mind:
- Interest rate. In general, the better your credit, the lower your interest rate will be. This is a good rule of thumb, but it will also depend on whether your rate is fixed or variable and the loan term you choose. Typically, shorter loan terms come with more competitive rates.
- Loan term. Most car loans come with terms from 2-7 years. Longer loan terms lead to lower monthly repayments, but you’ll pay more in interest fees in the long run because interest compounds over time.
- Secured or unsecured. Most of your car loan options will be secured, meaning the car you’re purchasing is used as collateral. If you default on the loan, your lender can repossess your car. On the other hand, if you borrow an unsecured car loan, you won’t risk losing your car if you default — but your interest rate will typically be higher.
- Fees. Different lenders have different fees including application fees, origination fees and late payment charges. You may also be on the hook for prepayment penalties if you make extra payments on your loan or pay it off before the term is up.
You definitely have options when looking to borrow $30,000 to buy a car — from online lenders, to banks and credit unions, to dealership financing. So brush up on your negotiation skills and get ready to compare deals so that you can stay on budget and find the best car for you.
Read our guide to car loans to learn more about how they work and compare even more lenders.