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Fixed-rate car loans

Predictable monthly repayments let you enjoy financial peace of mind.

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Matt Corke
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Found the car you want to buy? Whether it’s new or used, when you opt for a fixed-rate car loan, you can get an interest rate that stays the same for the entire life of your loan term. Read our guide and compare your options for fixed-rate car loans.

Compare fixed-rate car loans

Compare fixed-rate car loans from these online providers, including interest rates, loan terms and loan amounts.

1 - 6 of 6
Name Product APR Loan Amount Loan Term Requirements Long Table Description
CarsFast Car Loans
CarsFast Car Loans
4.90% - 29.90%
$500 - $75,000
12 - 96 months
Requirements: Min. income of $2,000 /month, 3+ months employed
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Loans Canada Car Loans
Loans Canada Car Loans
7.99% - 31.99%
$500 - $35,000
24 - 120 months
Requirements: Min. income of $1,800 /month, 3+ months employed
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More Info
Clutch Car Loans
Clutch Car Loans
From 8.49%
$7,500 - No max.
12 - 96 months
Requirements: 3+ months employed, Max.1 bankruptcy, Ontario & Nova Scotia only
Go to site
More Info
Carloans411 Car Loans
Carloans411 Car Loans
1.90% - 19.99%
$500 - $50,000
Up to 72 months
Requirements: Min. income of $1,600 /month, 3+ months employed
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More Info
Canada Auto Finance
Canada Auto Finance
4.90% - 29.95%
$500 - $45,000
3 - 96 months
Requirements: Min. income of $1,500 /month, 3+ months employed
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More Info
Splash Auto Finance
Splash Auto Finance
9.90% - 31.00%
$5,000 - $50,000
24 - 84 months
Requirements: Min. income of $2,200 /month, 3+ months employed
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More Info
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How do fixed-rate car loans work?

Fixed-rate car loans work by giving you an interest rate that stays the same over the life of your loan. This gives you the predictable monthly repayments that don’t change and are therefore easier to budget. Work out your repayments now with our handy calculator.
Car loans calculator

The alternative to a fixed-rate car loan is a variable-rate car loan. The interest rate on this type of loan is based on the prime lending rate, which is mostly determined by the Bank of Canada. It can rise and fall periodically. Variable rates have the potential to go higher or lower than fixed rates, so it’s harder to predict your repayments.

Secured vs unsecured fixed-rate car loans

There are two types of fixed-rate car loans: secured and unsecured.

  • Secured fixed-rate car loan. With a secured fixed-rate car loan, the lender will use your vehicle as collateral for the loan. This means that if you default on your loan, the lender can repossess your car. These loans generally come with lower rates as they are less of a risk for the lender.
  • Unsecured fixed-rate car loan. An unsecured fixed-rate car loan means that you won’t have to use your vehicle to secure the loan. This type of loan is more risky for lenders, so you’ll likely pay a higher APR (annual percentage rate).

Watch out for pre-computed interest

Some loans come with a fixed dollar amount of interest that you have to pay your lender no matter how long or how short your loan term is. With pre-computed interest, you won’t be able to save on your loan by paying it back early, unless your contract mentions getting a rebate or refund for early repayment.

Not all fixed interest loans come with precomputed interest, however. With simple-interest loans, your interest adds up over time and you can pay it off early to save.

What interest rates should I expect on a fixed-rate car loan?

Car loan interest rates depend on your personal factors, such as your credit score, loan term, type of vehicle you’re buying, income and existing debts. Borrowers with bad credit scores below 560 will face higher interest rates because lenders view them as higher risk.
Car loans for bad credit

Benefits and drawbacks of a fixed-rate car loan

  • Easier to budget. Fixed repayments can help you budget throughout your loan term.
  • Lock in a competitive rate. You don’t have to worry about your interest rate increasing over the life of your loan.
  • Predict your total loan cost. Since you know what rate you’ll have from start to finish, it’s easier to compare the cost of fixed-rate loans and choose the best one.
  • Can be higher than a variable rate. You won’t be able to take advantage of lower variable rates if the market changes and interest rates go down.
  • Potentially less savings. If a variable rate stays lower than fixed rates the whole time you’re paying off your loan, you could end up paying more in interest on a fixed-rate loan.

Compare car loans

3 mistakes to avoid when borrowing

Although a fixed-rate car loan can offer benefits, consider the following before you commit to a loan:

  • The fine print. Lenders can get sneaky and hide fees, conditions and other charges in the fine print. Make sure you read and understand the loan you’re signing onto.
  • Early repayment fees. There may be early termination fees or early payoff penalties attached to a fixed-rate car loan.
  • Car ineligibility. Make sure the car you’re planning on purchasing is eligible under the terms of the loan. Most lenders will set maximum age limits on used cars and want the car you choose to be in good condition.

How do I find the right lender?

  1. Pick your car. Start by researching your vehicle options. You won’t get accurate terms until you know how much you’re spending, the car you’re buying and who the seller is.
  2. Find a lender. Once you’ve narrowed down your car search, it’s time to find a lender. Look at banks, credit unions and online lenders to start the comparison process. It’s important to compare the fee structure, interest rate and other features offered by different lenders in the market so that you can find the loan that suits your financial needs.
  3. Determine your budget. Longer loan terms mean lower monthly payments, but will cost more in the end because of how long you’re paying interest fees. Having a large down payment can help lower your interest rate since you’ll need to borrow less.
  4. Apply. Submit an application once you’ve found a lender with decent fixed-rates and reasonable loan terms. You may have to fill out multiple applications at once, and your approval depends on your credit score and how much you can afford to borrow. To save time, consider using a broker that can connect you with multiple options.

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Bottom line

A fixed-rate car loan is a great option if you want to lock in your interest rate. You’ll know exactly how much you owe each month, how much the loan will cost you and have a list of all the fees your lender could charge. Don’t forget to learn more about car loans, and always compare rates to find the best option for you.

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