Finder is committed to editorial independence. While we receive compensation when you click links to partners, they do not influence our content.

The best car loans in Canada

Find car financing in Canada, plus get tips and strategies for the best auto financing deals.

The truth is there is no single best car loan in Canada. What is optimal for one person isn’t the best for another. For that reason, it’s important to assess and compare car loans to determine what terms, costs and requirements work for you.

To help, we created a how-to guide on comparing car loans. From comparing basic features to examining the lender, to determining the best type of auto financing for your situation, we’ll help you find the best car loan to meet your needs.

Best car loans in Canada

Best for any type of car: CarsFast Car Loans

$500 – $75,000
Loan amount
4.9% – 29.9%
APR
12 - 96 months
Term
Browse thousands of vehicles from dealers across Canada with CarsFast and get matched with financing that meets your needs, and purchase a new or used vehicle and get it delivered to your door.
  • Easy application
  • Multiple lenders
  • Quick financing
  • No collateral required
  • Long terms
  • Bad credit doesn't matter
  • Available across Canada
  • No posted interest rates
  • High interest rates for bad credit
Loan amount $500 – $75,000
APR 4.9% – 29.9%
Term 12 - 96 months
Interest Rate Type Fixed
Min. Credit Score 300
Fees Varies by lender, loan type and province
Origination Fee N/A
Turnaround Time Get pre-approved in less than 60 seconds.

Best for large loan amount: Coast Capital Car Loan

N/A
Loan amount
N/A
APR
18 - 84 months
Term
Coast Capital is one of the biggest credit unions in Canada, and you can get its car loan without a membership. The car loan does not have a maximum loan amount, so you can make a large car purchase.
  • Reputable credit union
  • Competitive interest rates
  • Finance a wide range of vehicles, including classic cars, luxury cars, boats and leisure vehicles
  • Borrowers with bad credit are not eligible
  • Not available in Saskatchewan, Quebec, Northwest Territories, Nunavut and Yukon
Loan amount N/A
APR N/A
Term 18 - 84 months
Interest Rate Type Fixed
Min. Credit Score 650
Fees No application or origination fees
Origination Fee N/A
Turnaround Time 48 - 72 hours

Best for low credit score: Splash Auto Finance

$5,000 – $50,000
Loan amount
9.9% – 31%
APR
24 - 84 months
Term
Splash works with a variety of borrowers, including those with bad credit, no credit or previous bankruptcies.
  • Flexible lender
  • Fast approval and funding
  • Loyalty program
  • High interest rates for bad credit
  • Not available in Quebec
Loan amount $5,000 – $50,000
APR 9.9% – 31%
Term 24 - 84 months
Interest Rate Type Fixed
Min. Credit Score 300
Origination Fee N/A
Turnaround Time 10 minutes if approved

Best for comparing lender offers: Loans Canada Car Loans

$500 – $35,000
Loan amount
0% – 31.99%
APR
24 - 120 months
Term
With one Loans Canada Car Loans application you can compare multiple lenders on its innovative online car loans platform, helping you find the best terms and interest rates on your car loan for your unique needs and budget. Loans Canada typically matches you with either a national lender or one that works exclusively in your province or territory.
  • Get matched with lenders that want to finance you
  • Anyone across Canada can apply
  • Fast approval and funding
  • High interest rates for bad credit
  • Your information will be shared with third-party lenders
Loan amount $500 – $35,000
APR 0% – 31.99%
Term 24 - 120 months
Interest Rate Type Fixed
Min. Credit Score 300
Fees Varies by lender
Origination Fee Dependent on lender
Turnaround Time Varies

Best for speed: LoanConnect Car Loans

$500 – $50,000
Loan amount
4.99% – 46.96%
APR
3 - 120 months
Term
LoanConnect is an online broker that can match you with lenders. Get multiple offers within minutes and your funds in as little as 24 hours.
  • Easy application
  • More choice
  • Free service
  • Transparent terms
  • High loan amounts
  • Quick deposits
  • No collateral required
  • Few eligibility requirements
  • Limited providers
  • Personal info required
  • Fewer options for bad credit
Loan amount $500 – $50,000
APR 4.99% – 46.96%
Term 3 - 120 months
Interest Rate Type Fixed
Min. Credit Score 550
Fees Varies by lender, loan type and province
Origination Fee N/A
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.

Best for flexibility: TD Car Loan

Starting at $7,500
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 with terms up to 96 months.
  • 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
  • Maximum $50,000 for privately sold vehicles
  • Rates are not shown online
Loan amount Starting at $7,500
APR N/A
Term 84 months
Interest Rate Type Fixed

Best for buying a car online: Clutch Car Loans

Starting at $7,500
Loan amount
Starting at 3.9%
APR
12 - 96 months
Term
Clutch has a large inventory of used cars and is available in AB, BC, NB, NS, ON and PEI. Shop for a car online, have it delivered to your door and 'test own' for a period of time.
  • Test own for 10 days
  • Complimentary 90-day warranty
  • New cars not available
  • Prep fee in Halifax
Loan amount Starting at $7,500
APR Starting at 3.9%
Term 12 - 96 months
Interest Rate Type Fixed
Min. Credit Score 580
Origination Fee $899
Turnaround Time Less than 24 hours

Best for excellent credit: RBC car loan

Starting at $7,500
Loan amount
N/A
APR
Up to 96 months
Term
As one of the biggest banks in Canada, RBC can offer competitive rates and flexible terms. Pre-qualify for the amount you need before you visit a dealer.
  • Choose between a fixed and variable rate
  • Finance a wide range of vehicles, including RVs and boats
  • Newcomers to Canada can apply
  • Skip 1 payment per year
  • Rates are not posted online
  • Not available in Nunavut
Loan amount Starting at $7,500
APR N/A
Term Up to 96 months
Interest Rate Type Fixed
Fees Not disclosed online

Best for recreational vehicle or leisure vehicle: Scotiabank Car Loans

Up to $200,000
Loan amount
N/A
APR
up to 96 months
Term
Get up to $200,000 for your recreational vehicle. Take up to 20 years to pay off your RV loan. If you're getting a leisure vehicle, take up to 72 months to buy a used motorcycle or leisure vehicle that's up to 5 years old.
  • Large loan amounts
  • Choose between a fixed and variable rate
  • Customize your payments
  • Pay off your loan anytime without penalty
  • Rates are not posted online
  • You need good to excellent credit to qualify
Loan amount Up to $200,000
APR N/A
Term up to 96 months
Interest Rate Type Fixed

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 considered each lender’s rates, fees, terms, borrowing amounts, funding speed and borrower perks. Use our list of the top nine 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.

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.

Finder in-line visual - What is the average car loan interest rate in Canada?

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.

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:

  1. Secured car loan
  2. Unsecured car loan
  3. Fixed-rate car loan
  4. Variable-rate car loan
  5. No-money-down car loan
  6. Bad credit car loan
  7. Car loan refinancing
  8. Auto title loan
  9. In-house financing
  10. Lease buyout

To help you narrow down your options, here are the 10 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 loanPiggy bank icon - Finder 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 loanFinder icon calculator and budget 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. For more, please read our guide on bad credit car loans or learn more about unsecured car loans.

Fixed-rate car loanFinder - icon - clipboard with rising costs 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. For more, read our guide on fixed-rate car loans.

Variable-rate car loan

Finder - icon - computer showing financials 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.

For more, read our guide on variable-rate car loans.

No-money-down car loanFinder - icon - bar graph with finances / money increasingBEST: 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 loanFinder icon calculator and budget 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 refinancingPiggy bank icon - Finder 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 loanPiggy bank icon - Finder 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 financingFinder - icon - bar graph with finances / money increasingBEST: 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 buyoutFinder - icon - clipboard with rising costsBEST: 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. To answer this question, read our guide on reasons to consider a lease buyout.

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:

Type of Car LoanBanksCredit UnionsDealershipsOnline LendersPrivate Lenders
Secured car loanYesYesYesYesYes
Unsecured car loanYesYesYesYes
Fixed-rate car loanYesYesYesYesYes
Variable-rate car loanYesYesYesYesYes
No-money-down car loanYesYesYesYesYes
Bad credit car loanYesYesYes
Car loan refinancingYesYesYes
Auto title loanYesYes
In-house refinancingYes
Lease buy-outYesYesYesYes

7 questions to ask when shopping for the best car loan in Canada

To find the best car loan for your needs — and improve your odds of qualifying for a car loan — answer the following seven questions:

  1. 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.
  2. 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.
  3. 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.
  4. 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.
  5. 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.
  6. 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!).
  7. 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 in 2022

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.

More guides on Finder

Ask an Expert

You must be logged in to post a comment.

Go to site