Car loan interest rates in Canada

We dug through the data so you don't have to. Here are the some of the best and most current car loan interest rates in Canada for new and used cars.

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  • Rates from 3.90% - 29.90%
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  • Loan term of 12 - 96 months
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Thinking of getting a car loan? While getting the lowest car financing rate is ideal, not all borrowers qualify for the competitively low rates advertised by traditional car loan lenders.

To find a competitive rate, it pays to shop around and compare rates and terms from a variety of lenders. It also helps to benchmark against the average car loan interest rate in Canada so you can quickly determine how much more or less the lender would like you to pay.

What’s the average car loan interest rate in Canada?

The average car loan rate is 7.50%, according to Statistics Canada.

The average buyer may pay around 6.7% and 9% interest on their car loan, depending on their credit score, whether the car is new or used, the purchase price of the car and whether the loan is based on a fixed or variable interest rate.

Compare current car loan interest rates in Canada

To get a car loan, you’ll need to be employed for at least 3 months and earn at least $1,500-$2,000 per month. Bad credit is okay with some lenders, but you’ll get some of the best rates available in Canada if your financial profile is strong.

Loan providerInterest rateLoan termKey features
CarsFast

3.90% - 29.90%

(new and used car loan rate)

12 - 96 months
  • Loan search platform for new and used car financing
  • Available across Canada
Loans Canada

0% - 46.96%

(new and used car loan rate)

3 - 60 months
  • Loan search platform with a large lender and dealer network
  • Available across Canada
Approval Genie

3.90% - 29.90%

(used car loan rate)

12 - 96 months
  • Specializes in used car financing
  • 4.7 Trustpilot rating based on 4,270+ reviews
  • Available in Ontario
Clutch

From 8.99%

(used car loan rate)

24 - 96 months
  • Online dealer of used cars with competitive prices
  • Available in Ontario and Nova Scotia
dealerhop

0% - 29.99%

(new and used car loan rate)

12 - 96 months
  • Loan search platform for new and used car financing
  • Available in all provinces except Alberta, Manitoba and Quebec
Canada Auto Finance

4.90% - 29.95%

(new and used car loan rate)

3 - 96 months
  • Loan search platform for all credit scores
  • Available across Canada

LoanConnect

8.99% - 46.96%

(new and used car loan rate)

72 - 84 months
  • Loan search platform for all credit scores
  • Available in all provinces

CIBC

5.99% - 12.99%

(new and used car loan rate)

1 – 8 years
  • Apply through a dealer to get the best rate
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DUCA

From 6.9%

(new car loan rate)

Typically 1-5 years
  • Credit union serving Ontario
  • Book an appointment to check your rate
Learn more
Kawartha Credit Union

6.99%

(cars 5 years old or newer)

Up to 5 years
  • Credit union serving Ontario
  • Apply online to get your rate
Learn more
Vancity

From 7.95%

(EVs and hybrid rates)

Up to 10 years
  • Credit union serving BC
  • Apply online to get your rate
Learn more
NLCU

5.20% - 7.95%

(new and used car loan rate)

Typically 3-8 years (new), 3-5 years (used)
  • Credit union serving Newfoundland and Labrador
  • Apply online to get your rate
Learn more
WFCU

6.99%

(new car loan rate)

Up to 4 - 8 years depending on the car's year
  • Credit union serving Ontario
  • Book an appointment to check your rate
Learn more
Libro Credit Union

From 6.95%

(for vehicles up to 3 years old)

1 - 7 years
  • Credit union serving Ontario
  • Book an appointment to check your rate
Learn more

Compare manufacturer car loan rates for new cars

Car brands such as Ford, Honda and Chevrolet also have financing offers, which you can get through dealerships. These offers typically change every month.

Check out this month’s rate offers for new cars from popular car brands in Canada.

ModelAPRLoan term
2024 Honda Civic Si

7.29%

84 months
2024 Chevrolet Silverado 1500

0%

Up to 72 months
2025 Hyundai Elantra (Essential)

5.49%

(with $2,995 down)

84 months
2024 BMW 3 Series

From 5.49%

24 – 84 months
2024 Nissan Rogue

From 0.99%

24 months
2024 Lyriq

0%

Up to 72 months

Offers last verified on November 1, 2024 and expire on December 2, 2024 (where an expiration date is disclosed). Offers are on approved credit, vary by region and may have other conditions.

Snapshot: Used car loan rates in Ontario

Used car loan rates vary depending on the vehicle. To give you an idea of what’s available, here’s a snapshot of used car financing offers for certified pre-owned (CPO) cars in Ontario.

BrandAPRLoan term
Nissan

From 3.99%

Up to 24 months
Mercedes

From 3.99%

Up to 72 months

Offers last verified on November 1, 2024. Offers are on approved credit, vary by region and may have other conditions.

Average car loan interest rates in Canada 2016–2024

According to Statistics Canada, the average car loan interest rate has increased from 3.76% in July 2016 to 7.79% in April 2024—an increase of 4.03 percentage points in 8 years. Although rates dropped in 2020, they rose sharply afterwards, particularly in 2022 after the rate hikes by the Bank of Canada.

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Did you know?

In Canada, car loan rates are calculated using a lender’s prime rate—a rate that is adjusted by the Bank of Canada (BoC) in response to changes in the economy and monetary policy. When the prime rate increases, lenders increase car loan rates to maintain their profitability. When the prime rate goes down, lenders lower their auto financing rates, to remain competitive and attract borrowers.

The chart below shows the BoC’s rate moves from 2013 to 2024. When we compare the average car loan rates and BoC rate moves, we can see a similar pattern.

Will car loan rates go down in 2024?

The Bank of Canada cut the overnight rate by 25 basis points on September 4, 2024 and by 50 basis points on October 23, 2024. The rate is now 3.75%, and economists expect the central bank to cut the rate by another 50 basis points on the next rate announcement on December 11, 2024.

What this means for car loan rates in Canada

If the BoC decides to continue to cut rates for the rest of 2024, you can expect car loan interest rates to go down as well.

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Our expert says: Here's how we decided on our budget, down payment and financing

"In the fall of 2023, we knew it was time to upgrade from our 2005 Toyota Corolla to a more spacious SUV for our family of three. We wanted a reliable used SUV with heated seats, Bluetooth, and optional third-row seating.

Budgeting and financing

We followed the 20/4/10 rule to set our down payment savings goal, aiming for a 48-month loan term and a monthly payment under $250. After narrowing down options, we settled on a 2016-2020 Toyota 4Runner Limited with under 100,000 km. We saved for 12 months and planned to finance around $9,000, including HST.

Finding the right deal

We preferred a dealership that offered financing to avoid penalties some dealers charge for outside loans. We found our 4Runner at a Chrysler dealership in the GTA and worked out the financing terms.

Financing process

At the dealership, we discussed our credit scores, income, and homeownership status with the finance manager. Doing our research saved us from financing more than we wanted, which would have increased the total cost.

We financed $8,900 over 48 months at 8.99% interest with National Bank. I pushed for a lower rate, but they wouldn’t budge unless we financed more. We made sure there were no penalties for early repayment, as we plan to pay off the loan early.

Key takeaways

  • You can negotiate the interest rate with good credit and a larger loan.
  • Older vehicles may have limited loan terms.
  • The lender might not be disclosed until you sign the loan agreement."
Performance Director

Where can I find the best car loan rates in Canada today?

You can often competitive rates from the following providers:

Dealerships

Dealerships are partnered with banks and other lenders to help you sift through offers and find the best rate. Dealers also give banks lots of business and, in exchange, gain access to reduced bank car loan rates. Finally, dealers want you to purchase one of their cars, so they have an incentive to present you with an attractive financing offer.

That said, going straight to a dealership doesn’t guarantee that you’ll get the best car loan rate, so it pays to get car loan pre-approval somewhere else first so you can negotiate with the dealer to match it or give you a better rate.

Online loan search platforms

Online loan search platforms like CarsFast and Loans Canada are partnered with hundreds of dealers and lenders and can match you with the best car loans for your situation. You can apply even if your credit score isn’t great, but be prepared for higher interest rates. Compare online car loan options above.

Banks and credit unions

Another option is to head straight to a bank or credit union. While financial institutions do not have an incentive to sell you a car, they may still offer competitive interest rates.

Which bank has the best car loan rates in Canada?

The best bank car loan rates in Canada are from banks that offer financing through dealerships, which include RBC, TD, CIBC and Scotiabank. Since dealerships can provide banks with large volumes of credit applications, banks in exchange can give them access to the lowest rates.

You can also get an idea of your bank car loan rate by using the RBC My Auto Affordability Tool. Finding out your rate offer through this tool won’t impact your credit score.

Real-life example: RBC car loan rate offer

Here’s a sneak peek of a real prequalification offer with RBC, Canada’s largest bank, for a borrower in Ontario based on the current rate environment.

The borrower meets banks’ typical minimum requirements of a 650+ credit score and a debt-to-income ratio under 40%. The offer is based on a $0 down payment and no trade-in vehicle.

Dog peeking at 8.99% interest rate and 72 months loan term

What are TD’s car loan interest rates for November 2024?

Check out the latest special offers available through TD:

ModelAPRLoan term
2024 Alfa Romeo Giulia

From 1.99%

36-96 months
2024 Chevrolet Camarro

4.99%

12-84 months
2024 Charger Daytona

6.99%

60-96 months
2024 Fiat 500e

From 0%

36-96 months
2024 Kia EV6

6.99%

60-96 months

Offers last verified on November 1, 2024. Offers are based on approved credit.

What is a good interest rate on a car loan in Canada?

While fluctuations in the prime rate will influence the interest rate on an auto loan, lenders also use a variety of other factors to set their interest rates, including the borrower’s credit score, loan term, loan amount and the current competitive landscape.

As a result, a good interest rate on a car loan in Canada is a rate that is equal to or near the current national average car loan rate of 7.50%.

New cars

If you have good credit, then car loan rates for new cars are typically 0% - 7.5% depending on the make and model.

Used cars

Car loan rates for used cars in Canada are typically higher and currently fall between 8% - 10%.

Bad credit

Car loan interest rates for people with bad credit are higher, because lenders take on more risk. Bad credit auto loan rates are typically between 12.9% – 29.99%.

How car loan interest rates are calculated

Most borrowers focus on the prime rate, but lenders use a range of factors to set their rates, with risk assessment and market conditions being among the most important factors.

In general, each lender uses five criteria to set their rates.

Person crossing bridge

Risk assessment

Banks and car loan providers assess the risk of lending to an individual based on their credit score, income, employment history and other financial factors. Borrowers with high credit scores and stable financial situations are generally seen as low risk and may be offered low car loan rates.

Person pushing calendar

Loan term

Car loan providers may offer different interest rates based on the length of the loan term. Most lenders offer their most competitive car loan interest rate with a term that helps them reduce risk and maximize earnings.

Two people doing tug of war

Competitive landscape

Lenders use the prime rate to establish a baseline but may choose to adjust their rates based on the competitive landscape. As a result, a lender may lower their rates to remain competitive or increase rates if they are no longer interested in attracting business for a certain loan type or in a specific region of the country.

Person watching TV screen that's showing a graph

Market conditions

Interest rates can also be influenced by broad market conditions, such as inflation, economic growth and government policies. Banks and lenders might adjust interest rates in response to these factors to manage risk and ensure profitability.

Person holding bag of money

Loan amount

The loan amount might also impact the interest rate, with large loans or secured loans potentially offered at lower interest rates.

Knowing how or why car loan interest rates change helps borrowers negotiate with lenders to try to secure lower interest rates. Even in a volatile economic environment, borrowers with a strong credit score and secure financial situation should negotiate.

How your financial situation affects your car loan rate

There are seven main factors that lenders use to assess your application and determine what rate to offer.

FactorDescription
Credit scoreHigher credit scores = lower rates
Loan termShorter loan terms = less interest paid
Type of carNew vehicle / preferred make or model = lower rates
IncomeStable income = lower rates
DebtLower debt ratio = lower rates
Down paymentLarger down payment = lower rates
Type of loanA fixed-rate loan is typically offered with a higher interest rate
  • Credit score. Those with higher scores generally have access to lower car loan rates, so improving your credit history is an important part of getting a low interest rate on your car loan.
  • Loan term. Car loan terms can range from 12 - 96 months. The loan term impacts the interest rate you’re offered and the total cost of the loan. In general, shorter loan terms correspond with lower car loan interest rates. That’s because lenders see longer loan terms as more risky. Even if a lender does offer you a lower interest rate on a longer loan term, you won’t necessarily save money since you’ll pay more interest over time.
  • Type of vehicle. Your vehicle’s make and model can also play a role in rates, especially if you’re buying a used car. Since it’s possible that your car will be used as collateral to secure the loan, lenders often charge higher interest for cars that are of poor quality and more likely to break down.
  • Income and debt ratios. Lenders consider your income and debt-to-income ratio because these reflect your ability to pay back the loan. You have a greater chance of being approved and getting lower interest rates if your income is higher.
  • Type of interest rate. Banks and credit unions can offer fixed and variable interest rates on a car loan. Generally, variable-rate car loans have lower starting rates than fixed-rate car loans.

Example: Impact of credit score on car financing

The following example illustrates how your credit score will influence the rate a lender will offer you and how this impacts the total cost of buying a car. To illustrate, we assume the purchase is for a new vehicle with a purchase price of $26,000 and a loan term of 5 years. These calculations also factor in 13% provincial sales tax and a 20% down payment (of $5,200).

Credit ratingCredit scoreInterest rateMonthly paymentTotal interest paid
Excellent760 to 9005.39%$461$3,458
Very good725 to 7595.99%$467$3,861
Good660 to 7246.20%$470$4,003
Fair560 to 6599.90%$513$6,574
Poor300 to 55914.99%$575$10,327

Note: The information above is for illustrative purposes only and does not take into account all of the factors lenders consider when evaluating a loan application. Actual lenders may charge different interest rates.

Car loan payment calculator

Use this calculator to find out how much you might pay per month based on varying loan amounts, loan terms and interest rates.

Car loan calculator

Your loan
Loan amount
$
Loan terms (in years)
Interest rate
%

Fill out the form and click on “Calculate” to see your estimated monthly payment.

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You can expect to pay back $ per month
Based on your loan terms
Principal $
Interest $
Total Cost $

How many Canadians plan to get a car loan

Data from the Finder: Consumer Sentiment Survey Q3 2023 shows that 8% of respondents plan to take out a car loan in the next three months.

Where Canadians plan to buy their new vehicle

In the Finder: Consumer Sentiment Survey Q2 2023 report, where 1,011 Canadians were asked where they planned to buy their next vehicle, the majority of Canadians confirmed that a used or new car dealership was still the preferred place to purchase their next vehicle. However, a larger number of Canadians are becoming more comfortable with the online car-buying process.

7 tips to get the best car loan rates in Canada

Finding the best rates in Canada involve doing research and comparing lenders. The following tips can help you find a low interest rate on your next car loan—and save you thousands of dollars in the long run.

Bottom line

To get the best car loan interest rates in Canada, you’ll need to have an excellent credit score, enough income to easily manage your loan repayments and a vehicle that is viewed favourably by lenders. Getting a low interest rate allows you to save money over the course of your car loan and ultimately lowers the total price you pay for your car. Compare car loans now.

If you already have a car loan with a high interest rate and think you could qualify for a lower one, you might want to consider auto loan refinancing.

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Written by

Group Editor | Personal finance expert

Romana King was the Canada group editor at Finder and a personal finance expert. As an award-winning personal finance writer and real estate expert, she has spent almost two decades helping Canadians make smarter money management decisions. Her first book, House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth, launched in November 2021, continues to be an Amazon bestseller and won the Excellence in Financial Journalism Book Award in 2022. See full bio

Romana's expertise
Romana has written 33 Finder guides across topics including:
  • Personal Finance
  • Real Estate
  • Estate Planning
  • Insurance
  • Retirement Planning
  • Debt Strategies
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Co-written by

Publisher

Leanne Escobal is a publisher for Finder. She has spent over 11 years working with financial products and services, specializing in content and marketing. Leanne has completed the Canadian securities course (CSC®) as well as the personal lending and mortgages course by the Canadian Securities Institute. She has a Bachelor of Arts (Honours) in English literature and creative writing from Western University. See full bio

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