If you’re searching for the best car loans in Canada, you have many options. You can apply to a direct lender, dealership or car loan search platform. Consider applying to a dealership or car loan search platform as they have strategic partnerships with lenders to help their customers find the most competitive car loan offers.
Use this guide to find out some of the best car loan providers in Canada. No single car loan is best for everyone, so compare your options to find the right fit for your unique situation.
12 best car loans in Canada
We recommend the best products through an independent review process, and advertisers do not influence our picks. We may receive compensation if you visit partners we recommend. These loans are not representative of the entire market.
 | 3.90% - 29.90% | 12 - 96 months | Min. income of $2,000 /month, 3+ months employed | Go to site Learn more |
| 0% - 46.96% | 3 - 60 months | Min. income of $1,800 /month, 3+ months employed | Go to site Learn more |
| From 8.49% | 12 - 96 months | 3+ months employed, Max.1 bankruptcy, Ontario & Nova Scotia only | Go to site Learn more |
| 6.99% - 29.99% | 12 - 96 months | Min. income of $2,000 /month, 3+ months employed | Go to site Learn more |
| From 7.99% | 12 - 96 months | 3+ months employed, Max.1 bankruptcy, Ontario only
| Go to site Learn more |
| 7.49% - 31.99%. | 12 - 84 months | Min. income of $2,200 /month, 3+ months full time employed
| Learn more |
| 4.69% - 29.99% | 12 - 96 months | Min. income of $1,500 /month, 400+ credit score, Ontario only | Learn more |
| 8.99% - 46.96% | 72 - 84 months | No min. income requirement | Learn more |
| Varies | 3 - 8 years | Recurring valid income | Learn more |
| Varies | Up to 96 months | Recurring valid income | Learn more |
| As low as 10.99% | Varies | Recurring valid income | Learn more |
| Varies | 12 - 96 months | Recurring valid income | Learn more |
Best car loans in Canada
1. CarsFast
$500 – $75,000
Loan amount
3.9% – 29.9%
APR
12 - 96 months
Term
CarsFast is a car loan search platform. Apply online and get matched with financing offers that meet your needs. Purchase a new or used vehicle. CarsFast was the car loan search platform finalist in the
Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of
82.50%.
Full Review
Best benefits
- Access a large network of dealerships. CarsFast is partnered with 350 dealerships to help people with good or bad credit find a car loan.
- Fast quotes. Get your rate offers within minutes of applying.
- Choose the best offer. Receive multiple offers and choose the one that's best for you.
- Accepts bad credit
- Has worked with over 350,000 customers
- Lending network consists of established lenders like the big banks
- No sign up or log in required
- High rates for bad credit
- Offers are limited to dealerships within CarsFast's network
| Loan amount |
$500 – $75,000
|
|---|
| APR |
3.9% – 29.9%
|
|---|
| Term |
12 - 96 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
300
|
|---|
| Fees |
Varies by lender, loan type and province
|
|---|
| Turnaround Time |
Get pre-approved in less than 60 seconds.
|
|---|
| Serviced Provinces |
All provinces
|
|---|
2. Loans Canada
$500 – $50,000
Loan amount
0% – 46.96%
APR
3 - 60 months
Term
With one Loans Canada application you can compare multiple lenders on its innovative online car loan search platform, helping you find the best terms and interest rates on your car loan for your unique needs and budget. Loans Canada can matches you with either a national lender or one that works exclusively in your province or territory. Loans Canada won for best car loan search platform in the
Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of
86.00%.
Full Review
Best benefits
- Save time. Your application will be cast wide and you'll get your results right after you apply.
- Easily compare offers. Compare offers from multiple lenders in one place.
- Work with an established company. Loans Canada has been in business since 2012 and is accredited by the Better Business Bureau (BBB) with an A+ rating.
- Accepts bad credit
- Over 60 lenders in its network
- Fast pre-approvals
- High rates for bad credit
- Offers limited to what's available in Loans Canada's network
| Loan amount |
$500 – $50,000
|
|---|
| APR |
0% – 46.96%
|
|---|
| Term |
3 - 60 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
300
|
|---|
| Fees |
Varies by lender
|
|---|
| Turnaround Time |
Varies
|
|---|
| Serviced Provinces |
All provinces and territories
|
|---|
3. Clutch
Starting at $7,500
Loan amount
Starting at 8.49%
APR
12 - 96 months
Term
Clutch is an online dealer with a large inventory of used cars. It is available in Ontario and Nova Scotia. Shop for a car online, have it delivered to your door and 'test own' for a period of time. Clutch made it to both the top 15 most recommended and the top 15 best-rated car loan providers in the
Finder: Car Loans Customer Satisfaction Awards 2023.
Full Review
Best benefits
- Get a seamless experience. Avoid the hassle of dealing with a salesperson. Clutch car prices are non-negotiable as they already price cars competitively.
- Benefit from a trial period. Use the car for 10 days/750 km and return it if you're unhappy.
- Find the best rates. Clutch works with Canada's largest lenders to help you find the best rates.
- Easy process from beginning to end
- One-stop shop
- Options for all credit scores
- Offers limited to Clutch's network
- High rates for lower credit scores
- New cars not available
| Loan amount |
Starting at $7,500
|
|---|
| APR |
Starting at 8.49%
|
|---|
| Term |
12 - 96 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
580
|
|---|
| Fees |
Service fees will apply depending on where you live: $899 in Nova Scotia
|
|---|
| Turnaround Time |
Less than 24 hours
|
|---|
| Serviced Provinces |
Ontario and Nova Scotia
|
|---|
4. Dealerhop
Starting at $7,000
Loan amount
6.99% – 29.99%
APR
12 - 96 months
Term
Get matched with one of Dealerhop's fulfillment partners to finance, trade-in or sell your car online.
Full Review
Best benefits
- Get pre-qualified online for financing. Dealerhop offers competitive interest rates and can match you with a lender.
- Apply easily. Buy, sell or trade-in your current vehicle by filling out a quick and easy online application.
- Get your new car delivered. At-home and in-store vehicle deliveries are available with Dealerhop.
- Accepts all credit scores
- Online and in-person shopping available
- High rates for bad credit
- Offers limited to what's available in the Dealerhop network
| Loan amount |
Starting at $7,000
|
|---|
| APR |
6.99% – 29.99%
|
|---|
| Term |
12 - 96 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
300
|
|---|
| Fees |
$0
|
|---|
| Turnaround Time |
24 Hours
|
|---|
| Serviced Provinces |
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island, and Newfoundland
|
|---|
5. CarDoor
Starting at $5,000
Loan amount
Starting at 7.99%
APR
12 - 96 months
Term
Secure financing, browse through used vehicles online and have your car delivered to your home with CarDoor. CarDoor made it to both the top 15 most recommended and the top 15 best-rated car loan providers in the
Finder: Car Loans Customer Satisfaction Awards 2023.
Full Review
Best benefits
- Hundreds of vehicles available. Browse and choose from hundreds of used vehicles.
- Money-back guarantee. If you're unsure about the vehicle, set your mind at ease with a 14 day money-back guarantee.
- Trade-in or sell your current vehicle. You can choose to trade-in or sell your existing vehicle with CarDoor.
- Vehicle delivered to door
- 100% online
- Only available in Ontario
- Limited selection of cars and lenders
| Loan amount |
Starting at $5,000
|
|---|
| APR |
Starting at 7.99%
|
|---|
| Term |
12 - 96 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
500
|
|---|
| Fees |
$130 for registering your licence plate
|
|---|
| Turnaround Time |
Less than 24 hours
|
|---|
| Serviced Provinces |
Ontario
|
|---|
6. Car Deal Canada
$7,500 – $50,000
Loan amount
7.49% – 31.99%
APR
12 - 84 months
Term
Car Deal Canada is an online car loan broker that lets you finance your next vehicle purchase completely online. All credit scores are accepted.
Full Review
Best benefits
- Easy to apply online. Apply for financing and choose a vehicle completely online, without the hassle of visiting multiple dealerships.
- Inventory of over 5,000 vehicles. Access over 5,000 vehicles from more than 15 brands.
- Get your car within as little as 24 hours. Get your car within as little as 24 hours in some cases, and get free delivery.
- Accepts all credit scores
- 100% online
- Free delivery of vehicle
- High rates for bad credit
- No test drives
| Loan amount |
$7,500 – $50,000
|
|---|
| APR |
7.49% – 31.99%
|
|---|
| Term |
12 - 84 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Turnaround Time |
Get pre-approved in less than 60 seconds
|
|---|
| Serviced Provinces |
All provinces
|
|---|
7. Autorama
Customer Survey: ★★★★★
4.5 / 5
Starting at $7,500
Loan amount
4.69% – 29.99%
APR
12 - 96 months
Term
Autorama is one of Toronto's largest used car dealerships. Buy online or in person and get financing to suit all credit scores.
Full Review
Best benefits
- Shop online or in store. Browse vehicles online or head to the store in Toronto to test drive and purchase.
- Same-day financing and delivery. Get on the road quicker with same day financing and delivery of your vehicle.
- Financing for all credit scores. Autorama partners with lenders that offer financing to suit all types of credit.
- Accepts bad credit
- Shop online and in-person in Toronto
- Same-day financing and delivery
- High rates for bad credit
- Not as much inventory as other online dealerships
| Loan amount |
Starting at $7,500
|
|---|
| APR |
4.69% – 29.99%
|
|---|
| Term |
12 - 96 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
400
|
|---|
| Turnaround Time |
Same day approval
|
|---|
| Serviced Provinces |
Ontario
|
|---|
8. LoanConnect
Customer Survey: ★★★★★
4 / 5
$500 – $50,000
Loan amount
8.99% – 46.96%
APR
72 - 84 months
Term
LoanConnect is a car loan search platform that can match you with lenders. Get multiple offers within minutes and your funds in as little as 24 hours. LoanConnect made it to the top 15 best-rated car loan providers in the
Finder: Car Loans Customer Satisfaction Awards 2023.
Full Review
Best benefits
- Get approved with any credit score. LoanConnect works with all types of borrowers.
- Get an offer fast. Get pre-approval offers within minutes after applying.
- Apply without a cosigner. Save time from having to find a cosigner since Canada Auto Finance doesn't require this.
- Easy application
- More choice
- Free service
- Transparent terms
- High loan amounts
- Quick deposits
- No collateral required
- Few eligibility requirements
- Offers limited to LoanConnect's network
- High rates for bad credit
| Loan amount |
$500 – $50,000
|
|---|
| APR |
8.99% – 46.96%
|
|---|
| Term |
72 - 84 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
550
|
|---|
| Fees |
Varies by lender, loan type and province
|
|---|
| Turnaround Time |
Get pre-approved in as little as 60 seconds, and receive money in as little as 24 hours from the time of your application.
|
|---|
| Serviced Provinces |
All provinces
|
|---|
9. BMO
Customer Survey: ★★★★★
5 / 5
Starting at $7,500
Loan amount
N/A
APR
3 - 8 years
Term
Get competitive rates and flexible terms from one of the Big Six banks. Take up to 8 years to repay your car loan. BMO Car Loans won the best traditional car loan lender in the
Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of
90.77%. Full Review
Best benefits
- Choose between a fixed and variable rate. If you get a fixed rate, it will stay the same throughout the life of the loan. If you get a variable rate, it will go up or down depending on what the Bank of Canada does. Save on interest if the rate goes down.
- Get flexibility. Choose between monthly, semi-monthly, bi-weekly and weekly payments, and defer a payment twice a year if you need to.
- Work with a reputable lender. BMO is one of the largest banks in Canada and can offer low rates if you have a strong financial profile.
- No prepayment penalties
- Apply at a dealership for potentially better rates
- Established lender
- Not as easy to make changes to payments
- Bad credit may not qualify
| Loan amount |
Starting at $7,500
|
|---|
| APR |
N/A
|
|---|
| Term |
3 - 8 years
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Serviced Provinces |
All
|
|---|
10. iA Auto Finance
Customer Survey: ★★★★★
4 / 5
N/A
Loan amount
Starting at 10.99%
APR
Varies
Term
iA Auto Finance specializes in auto financing for Canadians who can't get approved by a bank. iA Auto Finance was the finalist in the best car loan alternative lender category in the
Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of
84.00%.
Full Review
Best benefits
- Work with an established direct lender. iA Auto Finance is owned by iA Financial Group, which was founded in 1892.
- Reduce your car loan rate every year. It offers the Rate Reducing Loan, which allows you to lower your rate by 10% every year when you make on-time payments.
- Get a loan from an award finalist. iA Auto Finance ranked second in the J.D. Power 2023 Canada Dealer Financing Satisfaction Study for the non-captive, non-prime segment.
- Accepts bad credit
- Established direct lender
- Won't be able to compare offers
- High rates for bad credit
| Loan amount |
N/A
|
|---|
| APR |
Starting at 10.99%
|
|---|
| Term |
Varies
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Serviced Provinces |
All across Canada
|
|---|
11. TD
Customer Survey: ★★★★★
4.5 / 5
$7,500 – $50,000
Loan amount
N/A
APR
84 months
Term
Get TD financing from over 4,500 dealerships. Finance a new or used vehicle, including cars, trucks, RVs, marine vehicles, powersport vehicles and privately sold vehicles. Choose between a fixed and variable rate. TD Car Loans was the finalist for the traditional car loan lender category in the
Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of
87.94%.
Full Review
Best benefits
- Work with one of the Big Six. You'll be getting a competitive car loan from a trusted, experienced lender.
- Get a loan from an award winner. TD ranked first in the J.D. Power 2023 Canada Dealer Financing Satisfaction Study for the non-captive, non-prime segment.
- Compare cars on its easy app. TD Wheels allows you to search for cars based on your price range.
- Lengthy terms
- Finance many types of vehicles
- Use the TD Wheels App to search for a car and pre-qualify for financing
- Payment extensions should you need flexibility
- Pay off your loan without penalty
- No down payment required
- Rate offers limited to TD
| Loan amount |
$7,500 – $50,000
|
|---|
| APR |
N/A
|
|---|
| Term |
84 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Serviced Provinces |
All provinces
|
|---|
12. Canada Drives
Customer Survey: ★★★★★
4.5 / 5
$5,000 – $75,000
Loan amount
N/A
APR
12 - 96 months
Term
Canada Drives is a major player in the car loan market. Canadians of all credit scores can apply, including those with bad credit. Canada Drives made it to both the top 15 most recommended car loan providers in the
Finder: Car Loans Customer Satisfaction Awards 2023.
Full Review
Best benefits
- Work with an established car loan provider. Since 2010, Canada Drives has helped over one million Canadians find a car loan.
- Apply easily. Canada Drives is available nationwide and has a quick, simple application process.
- Get fast pre-approval. Hear back from Canada Drives right after you submit your application.
- Accepts bad credit
- 100% online
- High rates for bad credit
- Offers limited to what's available in its network
| Loan amount |
$5,000 – $75,000
|
|---|
| APR |
N/A
|
|---|
| Term |
12 - 96 months
|
|---|
| Interest Rate Type |
Fixed
|
|---|
| Min. Credit Score |
400
|
|---|
| Turnaround Time |
Less than 24 hours
|
|---|
| Serviced Provinces |
All
|
|---|
How we select the best car loans
At Finder, we spend hundreds of hours comparing and analyzing providers and products. Based on this research, we select the best car loans based on specific criteria and reasons. When choosing the best car loans, we consider each lender’s rates, fees, terms, borrowing amounts, funding speed, borrower perks, customer feedback and awards. Use our list of the best car loan suggestions as a tool — to help you narrow down the options and find the best auto financing to fit your needs. Remember, no single car loan will be the best choice for everyone, so compare your options before applying.
In 2023, we completed the Finder: Car Loans Consumer Satisfaction Awards — an annual ranking of car loan providers in Canada, based on customer satisfaction feedback. Read more about these awards and the methodology used to find the best car loan providers, based on customer service scores.
The 4 basic features of car loans in Canada
When shopping for the best car loan, you’ll need to consider four main features included in every auto financing contract.
Principal amount borrowed
The principal is the total amount you need to borrow from a lender. The amount is calculated using the purchase price of the car plus any fees, extra costs — such as dealer add-ons or upgrades — and taxes, minus any down payments or deposits you made.
Car loan interest rate
The car loan interest rate is the percentage your lender charges on the money you borrow. The interest rate you get will dictate your overall cost of borrowing money to buy a car. To get the best rate, several factors are considered, such as how much you want to borrow, the size of your down payment, your credit score, along with income and debt details.
Read our guide on getting the best car loan interest rate.
Loan term
A loan term is the amount of time it will take you to repay the car loan. The longer the loan term, the lower your monthly payments but the more interest you pay. The shorter the loan term, the higher your monthly payments but your overall cost to buy a vehicle drops. Typical car loan terms range from one year to seven years.
What is the best loan term for a car?
There is no easy answer to this question but the right answer should balance two competing needs: manageable monthly car loan payments and the overall cost of borrowing to finance a vehicle purchase. For that reason, the best term for a car loan is the shortest term with the best possible rate. This may not mean getting a car loan with the cheapest monthly payments, but it does mean finding a car and a car loan that you can realistically afford.
Costs and fees
When comparing car loans, remember to consider all the extra costs and fees. While some extra costs are specific to the type of vehicle others are associated with where you buy a car and the lender you choose.
For example, you may be required to pay a surtax on any import bought through a dealership. Plus, the dealership may add another cost to the overall purchase price because you upgraded from cloth to leather seats. Then you may be required to pay legal or appraisal fees when opening a car loan, or a discharge fee when you make your final payment.
These additional costs can add up and, if you’re not careful, significantly inflate the overall cost of your vehicle purchase.
To compare car loan costs—and find the best car loan—you first need to determine each lender’s annual percentage rate (APR).
The APR is the interest rate on the car loan plus any additional costs and fees associated with the loan. You can find the APR in the loan agreement — and keep in mind, that it’s usually higher than the advertised interest rate.
The APR is a more effective tool when comparing car loans as it reflects the actual cost you pay to buy the vehicle. To learn more, check out our primer on APR and how it impacts the cost of debt.
Plans to get a car loan in 2023
In the recent Finder: Consumer Sentiment Survey Q2, it appears Canadians are more motivated to purchase a car using a car loan with 15% of respondents planning to take out a car loan in the next three months, up from 12% in the first quarter of 2023.
When it comes to preferences, 26% of Canadians plan to buy a new vehicle in the next three months, while 1 in 4 Canadians (25%) plan to buy a used vehicle in the next three months.
10 types of car loans in Canada
All car loans are personal loans. Lenders loan money to a borrower for the express purpose of buying a vehicle. To get the best car loan not only do you need to compare auto finance features, but you need to determine the best type of car loan for your needs. First, consider the 10 types of car loans available in Canada:
- Secured car loan
- Unsecured car loan
- Fixed-rate car loan
- Variable-rate car loan
- No-money-down car loan
- Bad credit car loan
- Car loan refinancing
- Auto title loan
- In-house financing
- Lease buyout
To help you narrow down your options, here are the 12 best car loans in the Canadian marketplace, based on the type of loan, what each car loan is best for and where to find more details on these lenders and loans.
Secured car loan
BEST: Get the lowest car loan rates
A secured car loan means the car – or other assets you own – is used as collateral to secure the loan. If you fail to repay the car loan, the lender has the legal right to claim ownership of the asset used as collateral and to sell that asset to repay the debt. The most common type of secured loan in Canada is a mortgage, but lenders also use secured car loans to help reduce the interest rate charged on the loan. Generally, the more secure and less risky a loan, the lower the interest rate. To learn more, read our guide on secured car loans.
Unsecured car loan
BEST: For bad credit
An unsecured car loan means the lender completely depends on your ability to repay the loan using your earnings. Since there is more risk for lenders, unsecured car loans usually come with higher interest rates. However, an unsecured car loan may be the best option for those with bad credit.
Fixed-rate car loan
BEST: Fixed budgets or large loans
A fixed-rate car loan means the lender used one interest rate throughout the entire loan term, even if interest rates fluctuate.
The benefit of a fixed-rate car loan is that your monthly payments do not fluctuate — giving you predictable monthly loan repayment. The drawback of a fixed-rate car loan is that the interest rate charged is often higher than variable-rate loans.
Variable-rate car loan
BEST: Smaller loans or short loan terms
A variable-rate car loan uses an interest rate that fluctuates based on market conditions.
When negotiating a variable-rate car loan, you’ll be quoted an interest rate based on the lender’s prime rate, plus or minus based on market conditions, your credit score, your income and debt levels along with a few other factors.
When rates fall, the lender should pass on the savings to you, the borrower. However, if rates rise, the lender can either increase your monthly car payment or keep your payment the same, but more will go to paying down interest, not the principal debt.
No-money-down car loan
BEST: Employed but no savings
This type of car loan can be convenient since borrowers don’t have to use their own money as a down payment to purchase the vehicle but these loans usually come with higher costs. Most non-traditional loans, like no-money-down car loans, will have higher interest rates and many will have extra fees.
In general, it’s not wise to purchase a higher-value asset with no money down, unless you are confident that you can repay the loan. For instance, a new post-secondary graduate may consider this type of car loan if they just secured their first job and need a reliable set of wheels to get to and from work.
To understand whether or not this type of loan is best for you, read our guide on no-money-down car loans.
Bad credit car loan
BEST: For bad credit (or those dealing with a prior bankruptcy)
When your credit history takes a beating it can be discouraging to purchase larger ticket items, like a vehicle. But even if you have a bankruptcy in your credit history, you can still use a car loan to help rebuild your credit score and get a car.
The key is to consider auto financing from lenders that specialize in offering car loans to people with bad credit. These lenders are more accustomed to loan applications from people with a few dings against their credit history and can find ways to help you finance your purchase. By paying back the car loan on time, every month you also help to rebuild your credit history and improve your credit score. To learn more, read our guide on bad credit car loans.
Car loan refinancing
BEST: Get a lower interest rate
In general, the best reason to refinance a car loan is to lower your monthly loan repayments and reduce the overall cost of this debt. Unfortunately, not everyone considering car loan refinancing is trying to take advantage of cheaper interest rates. Quite often, the reason for refinancing a car loan is the monthly payments are no longer affordable. In these circumstances, it’s best to consider all your options. To learn more read our guide on refinancing a car loan in Canada.
Auto title loan
BEST: Access to cheaper debt
Unlike most other car loans, an auto title loan isn’t typically used to purchase a vehicle. Instead, these are personal loans that are financed using your car as collateral. To learn more about car title loans, read our guide on auto title loans.
In-house financing
BEST: Quick and easy financing through a dealership
In-house financing — car loans through a dealership — make sense for those eager for a quick and simple car buying process. Once you find the new or certified used car you want to purchase, you can discuss the financing terms with the dealer. However, just because the process of auto financing through a dealership is simple doesn’t make it the best option. To consider whether or not you should opt for in-house financing or a car loan through another type of lender, check out our guide on dealer financing vs lender car loans.
Lease buyout
BEST: Ready to drive your car long-term
It’s a good idea to consider a lease buyout if you are ready to drive a vehicle long-term and can determine whether or not the vehicle is worth buying.
Where can I find the best car loan in Canada?
To find the best car loan provider, you first need to consider the four types of lenders who offer auto financing in Canada:
- Major banks. Biggest brand recognition. Can be a good choice for people with excellent credit scores or low debt ratios.
- Online car loan lenders. Convenient for online applicants or people who want fast funding or a quick answer. Can be a good choice for buyers with poor or fair credit scores.
- Credit unions. Like big banks, credit unions offer car loans and are often best for buyers with good credit scores.
- Dealerships. Good option if you can find a dealer selling a car you want and offering incentives, such as low-interest rate loans. Also a good option for those who hate comparison shopping.
For a quick comparison, use the Finder car loan comparison tool.
To help narrow down your options, consider what type of loan you need and then approach the following lenders:
| Secured car loan | Yes | Yes | Yes | Yes | Yes |
| Unsecured car loan | Yes | Yes | — | Yes | Yes |
| Fixed-rate car loan | Yes | Yes | Yes | Yes | Yes |
| Variable-rate car loan | Yes | Yes | Yes | Yes | Yes |
| No-money-down car loan | Yes | Yes | Yes | Yes | Yes |
| Bad credit car loan | — | — | Yes | Yes | Yes |
| Car loan refinancing | Yes | Yes | — | Yes | — |
| Auto title loan | — | — | — | Yes | Yes |
| In-house refinancing | — | — | Yes | — | — |
| Lease buy-out | Yes | Yes | Yes | Yes | — |
Which bank is the best for car loans?
The best bank for car loans will depend on a few factors. For example, if you have a long-standing relationship with your bank, and have several other banking products in good standing with it already, you may have a better chance of approval with your current bank.
When looking at bank car loan interest rates, banks tend to offer the best rates and loan terms to customers with good to excellent credit scores. For example, TD Canada Trust has offered car loan interest rates (as of January 4, 2024) between 2.99% and 4.99% on the low side, and 5.29% and 8.99% on the high side depending on the car model.
To find the best car loan for your needs — and improve your odds of qualifying for a car loan — answer the following seven questions:
- Do I qualify for a car loan? All lenders have credit and income requirements but some are more lenient, others specialize in certain categories of borrowers (such as self-employed) and others only lend within certain provinces or for certain types of vehicles. Make sure you meet a lender’s qualifications before submitting a formal application since each loan request will be a hard hit against your credit score. You can find out the minimum credit score for a car loan or learn how credit scores work.
- Is my car eligible? Will this lender provide a loan for the car you want to purchase? Some lenders have restrictions on the age or type of vehicle that can be financed, while others require proof of vehicle history Confirm with your loan provider that you’ll be able to purchase the car you want before you apply.
- How much can I borrow? The loan amount the lender offers you depends on a couple of factors. Your credit history and financial situation will be important, but for a secured car loan, the loan amount will ultimately depend on the car’s cost.
- What type of car loan? It can be a loan for a new or used car, a low-interest car loan or loans for those with poor credit. You can even find loans that offer car loan pre-approval before you decide whether to accept the loan. Since all situations are different, look into all your options to determine which type of loan will benefit you the most.
- Length of the car loan term? What are the loan terms? How long it takes you to pay off a car loan is known as the loan term. In Canada, most car loan terms range between one and seven years — although this is usually expressed in months, so 12 to 84 months. The longer the loan term, the lower your monthly payments but the higher your overall cost for your vehicle purchase.
- Are payments flexible? Being able to skip a payment or make extra payments is a great way to manage debt and repay loans. However, some lenders are not in favour of these prepayment privileges. Find out if the lender will penalize you for repaying your car loan early, charge a fee if you make additional payments or choose to skip a payment (once and a while!).
- What is the total cost of borrowing? Most of us focus on the loan amount and the interest rate — as these are the principal factors determining the monthly payments. But to get a true cost of borrowing you need to consider all costs, including add-ons, fees and taxes. A good place to start is to compare the APR of one lender to another. The APR factors in the interest cost and all other fees and helps you make a competitive assessment of the lender with the best loan and terms.
Compare the best car loans in Canada
What is the best car loan in Canada? Well, like all financial questions the answer depends on your situation and needs. To help, we’ve compiled a list of the best car loans in Canada, based on specific features. Use our list to help narrow down the option that’s right for you, or search our complete comparison tool and select the features that matter most to you.
Still not sure? Learn more about how to buy a car in Canada or read our car loan lender reviews to find a lender that suits your needs.
