Current Car Loan Interest Rates in Canada

Thinking of buying a car? Locking in a great car loan rate is key to lowering your monthly payments and total cost. Whether you have good or bad credit, are shopping for a new or used vehicle, or live in Eastern or Western Canada, compare car loan rates here to get the right financing for your needs.

Compare current car loan rates in Canada

To get a car loan, you’ll need to be employed for at least three months and earn at least $2,000 per month. Some lenders accept bad credit, but only borrowers with strong financial profiles qualify for the lowest rates.

Lender	APR	Loan amount	Loan term
Clutch (used car loans)	From 7.99%	$7,500 – No max.	24 - 96 months	Go to site
Loans Canada	0% - 35.00%	$3,000 – $50,000	12-84 months	Go to site
My Auto Approval	0% - 35.00%	$5,000 – $75,000	12 - 96 months	Go to site
Canada Auto Finance	4.90% - 29.95%	$5,000 – $65,000	3 - 96 months	Read review
Carsfast	3.90% - 29.90%	$500 – $75,000	12 - 96 months	Read review
LoanConnect	8.99% - 35.00%	$500 – $60,000	72 - 84 months	Read review
CIBC	From approx. 7.44%	$7,500 – No max.	12 – 96 months	Read review
Approval Genie	3.90% - 29.90%	$5,000 – $75,000	12 - 84 months	Read review
DUCA	From 6.90%	Varies	12 - 60 months	Read review
Kawartha Credit Union	From 6.49%	Varies	Up to 60 months	Read review
Vancity	From 5.45%	$1,500 – No max.	Up to 120 months	Read review
Newfoundland and Labrador Credit Union	4.3% - 6.7%	Varies	36 - 96 months	Read review
WFCU	5.69%	Varies	48 - 96 months	Read review
Libro Credit Union	From 7.79%	Varies	12 - 84 months	Read review
TD Bank	7.49% - 29.99%	$5,000 – $50,000	84 months	Read review
Scotiabank	From approx. 7.49%	Up to $200,000	up to 96 months	Read review
RBC	From approx. 7.49%	$7,500 – No max.	1 – 8 years	Read review

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

The average car loan rate is 6.66%, according to Statistics Canada.

The average buyer may pay between 3.6% and 9.0% interest on their car loan, depending on their credit score, loan amount, loan term, interest rate type and other factors.

What are the bank car loan rates?

Below is an overview of bank car loan interest rates in Canada:

• TD: 7.49% - 29.99% (higher rates for subprime borrowers)
• CIBC: From approx. 7.44%
• Scotiabank: Approx. 7.49% - 29.99% (higher rates for subprime borrowers)
• RBC: From approx. 7.49%

BMO stopped offering car loans in 2023.

Who has low car loan interest rates in Canada?

Compare car loan rates below from a variety of lenders to find the lowest rates.

Provider	Lowest APR	Car eligibility	Lender type
Loans Canada	0%	Select new models	Loan search platform
CarsFast	3.9%	Select new models	Loan search platform
TD	0%	Select new models, such as the 2026 Alfa Romeo Giulia	Bank
Libro	7.79%	Models up to 3 years old	Credit union
NLCU	4.3%	New 2025 models	Credit union
Vancity	5.45%	New or used EV	Credit union

Must read: Best car loans in Canada

What are the car loan rates for new cars?

New car loan rates now start at 0%. Dealerships like Ram, Cadillac, Volkswagen and Chevrolet regularly update their financing offers, which change from month to month.

Explore this month’s financing deals for new cars from popular Canadian brands.

Model	Financing	Loan term
2025 Volkswagen ID. Buzz	0%	60 months
2026 Toyota RAV4 XLE	3.29%	36 months
2026 GMC Sierra 1500	0%	84 months
2026 Honda Civic	6.99%	84 months

Offers last verified on November 4, 2026 and expire on November 2, 2026 (where an expiration date is disclosed). Offers are on approved credit, vary by region and may have other conditions.

Dive deeper: Latest 0% and low-rate financing deals for new cars

Snapshot: Used car loan rates in Ontario

Used car loan rates vary depending on the vehicle, but they generally start at 7.99% for cars that are not certified pre-owned (CPO).

CPO cars in Ontario vary widely in interest rates. Below is a snapshot of the rates you can expect.

Brand	APR	Loan term
Hyundai	From 3.99%	Varies (up to 84 months with some models)
Nissan	From 2.99%	24 months
Mercedes	From 1.40%	24 to 72 months

Offers last verified on November 4, 2026. Offers are on approved credit, vary by region and may have other conditions.

Dive deeper: Car loans in Ontario

Average car loan interest rates in Canada from 2017–2026

According to Statistics Canada, the average car loan interest rate has increased from 4.45% in December 2017 to 6.66% in February 2026—an increase of 2.21 percentage points in nine years. Car loan interest rates notably rose in 2022 after a series of rate hikes by the Bank of Canada.

Will car loan rates go down for the rest of 2026?

The Bank of Canada increased its rate by 25 basis points to 2.50% on October 28, 2026. It could increase the policy rate further, according to Tiff Macklem, governor of the Bank of Canada. This means car loan rates could go up.

Related: Thinking of refinancing? Check out our car loan refinancing guide

Where can I find competitive car loan rates today?

You can often get competitive rates from the following providers:

Dealerships

Dealerships are a strong option for financing for the following reasons:

• They’re partnered with banks and other lenders to help you sift through current offers and find the best rate.
• Dealers give banks lots of business and, in exchange, gain access to lower bank car loan rates.
• 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.

TD car loan interest rates at a glance

Here are examples of offers you might find from TD:

Model	APR	Loan term
2026 Alfa Romeo Giulia	From 0%	36-96 months
2026 Chevrolet Corvette	From 0%	12-84 months
2026 Dodge Charger Daytona	From 2.99%	36-96 months
2025 Fiat 500e	From 0%	36-96 months
2025 Kia EV4	From 6.99%	60-96 months

Offers last verified on November 4, 2026. Offers are based on approved credit.

Related: Buying used? Here are the best used car sites in Canada

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 6.66%.

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%.

Must read: Best bad credit auto loans in Canada

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.

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 a secure financial situation should negotiate.

How your financial situation affects your car loan rate

Here are the main factors lenders use to assess your application and determine what rate to offer.

Factor	Description
Credit score	Higher credit scores = lower rates
Loan term	Shorter loan terms = less interest paid
Type of car	New vehicle / preferred make or model = lower rates
Income	Stable income = lower rates
Debt	Lower debt ratio = lower rates
Type of loan	A fixed-rate loan is typically offered at 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 riskier. 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 rates 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 $48,000 and a loan term of 5 years. These calculations also factor in 13% provincial sales tax and a 20% down payment (of $9,600).

Credit rating	Credit score	Interest rate	Monthly payment	Total interest paid
Excellent	760 to 900	5.39%	$850	$6,385
Very good	725 to 759	5.99%	$863	$7,129
Good	660 to 724	6.20%	$867	$7,390
Fair	560 to 659	9.90%	$946	$12,136
Poor	300 to 559	14.99%	$1,062	$19,065

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.

Example: Impact of loan term on car financing

The length of your loan term directly impacts how much interest you’ll pay. The example below shows calculations for the same loan amount ($48,000) and interest rate (7.5%) at different loan terms.

Loan amount	Interest rate	Loan term	Monthly payment	Total interest paid
$48,000	7.5%	2 years	$2,159.98	$3,839.53
$48,000	7.5%	3 years	$1,493.10	$5,751.54
$48,000	7.5%	4 years	$1,160.59	$7,708.19
$48,000	7.5%	5 years	$961.82	$9,709.29
$48,000	7.5%	6 years	$829.93	$11,754.63

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.

This example shows that longer loan terms mean lower monthly payments, but you pay more interest overall. When negotiating with a dealer, it pays to negotiate the total car price rather than your monthly payment to avoid unfavourable terms.

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.

7 tips to score the best deal

Finding the best rates in Canada involves 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.

• 1. Know your credit score

  Before you start comparing car loan interest rates in Canada, understand your credit score and how it impacts your finances. If you have a history of missed payments, many open credit lines, or a high debt-to-income ratio (i.e. your monthly debt payments are more than 40% of your monthly income), then your application will look less favourable to lenders.

  You can get a copy of your credit report from credit reporting agencies.

• 2. Compare rates from different lenders

  Some lenders allow you to pre-qualify without impacting your credit, so you know what rates you’re eligible for. If that’s the case, you can apply to multiple lenders without damaging your credit score. This makes it easier to compare rates and find a loan that’s suitable for your needs.

  Compare car loan options

• 3. Get pre-approved before visiting the car dealership

  When you compare your options ahead of time, you’ll have an idea of the rates you’re eligible for. This means you’ll have a solid number to negotiate a lower APR when you visit a dealership that offers financing. If you prefer not to deal with the stress of negotiating with a dealership, you can buy a car online.

• 4. Focus on the overall cost

  Many buyers visit the dealership with an idea of their monthly car payment. While this is great for your budget, it can lead to salespeople inflating the price of your car, usually by offering you a longer loan term, which means you’ll be paying more in interest. Your focus should be on the overall cost of the vehicle, that is, the sale price as well as the total amount of money you’ll have paid throughout the entire term of your loan. Once you have this number, it’s much easier to determine what term length is best so you can handle monthly repayments.

• 5. Be willing to negotiate

  If you decide to visit a car dealership without knowing what rates you’re eligible for, you’ll need to negotiate your interest and the price of the car. No matter how good your credit score is, you likely won’t be offered the lowest interest rate right off the bat. Dealerships are hoping you don’t question your rate, so come prepared, knowing your credit score and the average rates currently offered on the market.

• 6. Don't jump on the first deal

  After researching, price shopping and comparing lenders, it might be tempting to take the first good interest rate that comes your way. Stay patient. Since your interest rate isn’t the only thing that impacts the final price of your car, spend the time determining how term length and vehicle cost affect your budget. Most lenders will offer you a few days to consider your options. You won’t be wasting time if you decide to take a moment to get your thoughts in order, and you might save a lot of money in doing so.

• 7. Check the fine print

  Like most loans, car loan contracts are notorious for having difficult-to-understand terminology. You should know how interest is calculated on your loan and any potential fees you might have to pay. You’ll also want to confirm that your loan isn’t conditional when you visit a dealer. Conditional means “subject to change.” In other words, your loan isn’t finalized when you drive off the lot. Your terms could change, which could leave you with a worse interest rate on a loan you thought you had a good deal on.

Car loans are among the least common new debts

Despite the ability to select multiple loan types, only 8% of Canadians reported taking out a car loan or lease in the past year, according to the Finder: Consumer Sentiment Survey March 2026. This indicates that vehicle financing is significantly less common than revolving debt, with Canadians nearly four times more likely to have used a credit card.

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.