The average cost of a new car in Canada is just over $38,000, while used cars cost around $20,000 according to the Auto Trader price index. That means that with a budget around the $30,000 mark, you’ll have plenty of options whether you chose to buy used or new. But in order to get the most out of your budget, you’re going to need to get a car loan with competitive rates and terms. Keep reading our guide below to learn about how to get the right $30,000 car loan for you.
Where can I get a $30,000 car loan?
You have a few options when you’re looking to borrow $30,000 for a car loan, including:
Secured $30,000 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 $30,000 car loans
Unsecured car loans don’t require collateral. You won’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. Additionally, lenders will probably require a very good credit score. These types of car loans aren’t very common, so you’ll have to do some digging around.
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.
$30,000 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.
Types of $30,000 car loan lenders
From online lenders to financing through a dealership, there are several places to turn to when hunting for a $30,000 car loan:
Bank. If you have good or excellent credit, compare pre-approval offers from your bank as well as other banks — many don’t require you to hold an account in order to apply for a car loan.
Online lender. You can get great rates from online lenders, especially if your credit isn’t good enough to qualify for a bank loan. You can often fold taxes, titling, registration and other fees into the loan amount.
Credit union. You usually have to be a member of a credit union to take out a car loan.
Dealership. Most dealerships offer in-house financing through the car manufacturer or a local bank. You can usually get approved and drive off the lot the same day, but you may get a higher interest rate than if you went through a bank or online lender.
Compare $30,000 car loans
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Calculate your monthly payments: How much will a $30,000 car loan cost?
Both your monthly payments and the overall cost of the loan depends on your interest rate and the loan term. Choosing a long term will result in smaller payments, but you’ll pay more interest over the life of the loan. Choosing a small term will result in larger payments, but you’ll save on interest in the end.
Most car-buying experts recommend dedicating no more than 15% – 20% of your monthly budget towards all car expenses — including your loan payment, fuel costs, insurance premium and regular maintenance.
Use the calculator below to figure out how a $30,000 car loan breaks down for you.
Car loan monthly calculator
Calculate how much you could expect to pay each month
Ash, an Ontario resident, is looking for a new car. He visits a dealership where he finds a 2020 Kia Optima Ex priced at $30,500.00. After trading in his old car for $2,800.00 and putting a 20% down payment of $5,540.00 on the Kia, Ash heads to his local bank where he applies for an auto loan to cover the remaining cost ($22,160.00) plus 13% HST. Because of his solid credit history, he is approved for loan. Ash also pays approximately $150.00 to register his vehicle with the province of Ontario – this includes the cost of a license plate sticker and vehicle permit. (Fortunately, he can reuse his old plates and doesn’t need to buy new ones.)
Cost of new car
$29,245.00
Loan type
Auto loan (term loan)
Loan amount
$22,160.00
Interest rate (APR)
5.50%
Loan term
5 years
Additional fees
3.00% origination fee ($664.80)
$0 application fee (waived by bank)
Payment
$462.78 monthly or $213.46 biweekly
Total loan cost
$27,766.80 with monthly payments or $27,749.80 with biweekly payments
*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.
Popular new cars you can buy with a $30,000 car loan in Canada
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 2021 and 2022 models. The actual cost you end up paying will depend on where you live, your negotiation skills and any special promotions you can qualify for.
2020 model
Starting MSRP
Body
2022 Kia K5
$29,595
Sedans
2021 Mazda3 GT
$28,750
Compact sedan
2021 Toyota Corolla XSE CVT
$29,050
Hatchback
2021 Volkswagen Tiguan
$29,795
SUV
2021 Honda Civic Touring
$30,265
Sedan
2022 Toyota Camry
$27,510
Sedan
2022 Toyota Prius
$29,150
Hybrid-electric sedan
2022 Honda CR-V
$30,770
Compact SUV (Crossover)
2021 Toyota Rav-4
$28,590
Compact SUV (Crossover)
2021 Mazda CX-5 GX
$31,276
SUV
2022 Hyundai Tucson
$27,799
SUV
2021 Kia Niro EX
$30,195
Hybrid-electric SUV (Crossover)
2022 GMC Canyon Extended Cab
$27,995
Mid-sized pickup truck
Bottom line
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.
Frequently asked questions about $30,000 car loans
Every lender is different, and you may be required to provide different documents than those listed below. Typically, however, you need to provide the following:
Proof of income. This includes pay stubs, bank statements or Notices of Assessment from the last few tax years.
Government-issued ID. A driver’s license or a passport should suffice. Your name and photo should be on your ID.
Proof of residency. Can be from a utility bill, bank statement, phone bill or similar document that has both your name and address on it.
Details about your finances. This includes any loans you already have, credit card debt, and assets, among other things. Your lender will need to conduct a hard pull on your credit to find out your history of borrowing and repaying, which will temporarily decrease your credit score. You will need to give permission to have your credit score checked, then your lender will take care of the rest.
Vehicle and dealership information. Some lenders may want you to already have a car picked out when you apply, while others will give you a pre-approval period that allows you to shop for your car with a loan already in hand. Pre-approval periods typically last about 60 days. If vehicle information is required, be prepared to provide the make, model, year, cost
Auto insurance information. Note that lenders will often require that you have more than the minimum auto insurance coverage required by your province in order to help ensure that the financial burden of driving is never too great for you to pay back the loan. So, you may need to provide insurance information for the vehicle you want to buy. However, this requirement may be waived for pre-approval offers in which you have a specified time period to pick out a car.
Trade-in documents for your old car (if applicable). The trade-in value of your vehicle will affect how much financing you need, so make sure you get this information in writing from your dealership.
It depends on the lender. Many have limits on the age and mileage that cars can have to remain qualified for financing, so check with your lender to know what limits you have to work within. If you’re looking to buy a classic car, special financing options may be available from lenders who offer loans specifically designed for those who want to buy collector vehicles.
It depends on your priorities. New and used cars both have their benefits as well as their drawbacks. With a new car, you have the peace of mind that comes with owning a vehicle that’s in top-notch condition and a warranty to fix it if anything goes wrong.
However, a new car depreciates up to 20% within the first year of ownership and then loses roughly 10% more of its value each year for the next 3 years. That’s 40% of its value lost in just 4 years! With a $30,000 car loan, you could end up with an “upside down car loan,” where you owe more than your vehicle is actually worth after just a few years.
On the other hand, you can take advantage of that extreme depreciation rate by buying a gently used car that’s only 1-2 years old for a greatly reduced price. But you risk having to pay for repairs out of pocket if the vehicle doesn’t come with a warranty. If you’re buying a used car for $30,000, check car comparison resources like the Canadian Black Book or autoTRADER.ca to make sure it’s really worth paying that much.
Stacie Hurst is an editor at Finder, specializing in a wide range of topics including stock trading, money transfers, loans, banking products, online shopping and streaming. She has a Bachelor of Arts in Psychology and Writing, and she completed one year of law school in the United States before deciding to pursue a career in the publishing industry. When not working, Stacie can usually be found watching K-dramas or playing games with her friends and family.
Who is currently offering zero percent financing on cars in Canada? See offers from popular car brands in Ontario, BC, Alberta and more.
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