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Compare used car loans

Even if your vehicle is secondhand, you can still get a car loan to finance it.

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Car loans from Loans Canada

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  • Rates from 0% - 29.99%
  • Loan terms from 3 - 96 months
  • Multiple loan offers
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Compare car loans for used cars

Name Product Loan Amount Interest Rate Loan Term Min. Credit Score Requirements Table description
Loans Canada Car Loans
$500 - $35,000
0% - 29.99%
3 - 96 months
300
Min. income of $1,800 /month, 3+ months employed
Compare rates from multiple lenders.
Complete a single application to get quotes from different lenders. Bad credit, CERB and EI borrowers considered.
AutoLoanProviders
$7,500 - $85,000
3.99% - 29.99%
12 - 96 months
300
Min. income of $1,800 /month, 1+ months employed
Available in Ontario only.
Apply online and get your new vehicle delivered to your door anywhere in Ontario free of charge. All credit scores considered.
CarsFast Car Loans
$500 - $75,000
4.90% - 29.90%
12 - 96 months
300
Min. income of $1,800 /month, 3+ months employed
Get a new or used vehicle delivered to your door.
Browse thousands of vehicles from dealers across Canada and get matched with financing that meets your needs.
Coast Capital Car Loan
$10,000 - No Max.
Varies
18 - 84 months
650
Able to service debt payment of $300/month
Competitive rates and flexible terms.
Finance new and used vehicles from one of Canada's largest credit unions. No credit union membership required. Available across Canada except SK, QC, NT, NU, YT.
Splash Auto Finance
$10,000 - $50,000
9.90% - 29.90%
24 - 84 months
300
Min. income of $2,200 /month, 3+ months employed
Apply with any credit score.
Get financing for a new or used car. Auto loans for borrowers with fair credit, bad credit, no credit or bankruptcy.
goPeer Car Loan
$1,000 - $25,000
8.00% - 31.00%
36 - 60 months
600
Min. income of $40,000 /year
P2P platform with competitive rates.
Canada's first regulated consumer peer-to-peer lending platform that connects creditworthy Canadians looking for a loan with Canadians looking to invest.
LoanConnect Car Loans
$500 - $50,000
9.90% - 46.96%
3 - 120 months
550
No min. income requirement
Pre-approval in as little as 60 seconds.
Get access to 25+ lenders through this brokerage. Get your funds in as little as 24 hours.
Canada Auto Finance
$500 - $45,000
4.90% - 29.95%
3 - 96 months
300
Min. income of $1,500 /month, 3+ months employed
Get financing from partnered local lenders.
Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Carloans411 Car Loans
$500 - $50,000
1.90% - 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
High application approval rate.
Get connected with suitable lenders to finance your next car, van or truck. Check eligibility for this loan through LoanConnect.
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New cars are notorious for losing their value the moment you drive them off the lot — but you can take advantage of that depreciation by buying used. It can help you save money, and there are still plenty of loan options available. However, you’ll want to carefully consider the vehicle’s history before you buy.

Representative example: Ben buys a used car

Ben lives in Toronto, Ontario and decides to buy a car so he can drive to his new job. He finds a 2017 Hyundai Elantra in good condition with low mileage for only $14,500.00 at a dealership. He makes a 20% down payment of $2,900.00 and gets an auto loan at his local bank to cover the remaining $11,600.00 + $1,885.00 HST.

Ben gets approved for a $13,485.00 auto loan, and also pays approximately $180.00 to register his vehicle with the province of Ontario (including the cost of license plates, a sticker and a vehicle permit).

Cost of used car$14,500.00
Loan typeAuto loan (term loan)
Loan amount$13,485.00
Interest rate (APR)4.90%
Loan term5 years
Additional fees4.00% origination fee ($539.40)
Payment$253.86 monthly or $117.05 biweekly
Total loan cost$15,231.67 with monthly payments or $15,216.50 with biweekly payments

*The information in this example, including rates, fees and terms, is provided as a representative transaction. The actual cost of the product may vary depending on the retailer, the product specs and other factors.

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3 ways to finance a used car

There are a few options available for financing a used car, all of which have pros and cons. The right option for you will depend on your financial situation and preferences. Here are your 3 used car finance options:

1. Financing through a dealership

You can get financing directly through the dealership where you’re buying your used car. Dealership financing can be quick and convenient, but it’s often more expensive than finding financing through a third-party lender. However, because dealerships have a relationship with their lending partners, there’s usually room for negotiation. You can typically get a 3-7 years term car loan from a dealership.

Pros
  • Fast and convenient
  • Usually open to negotiation for better sales price, interest rate, loan terms or vehicle upgrades
  • Generally more open to financing people with bad credit
Cons
  • Interest rate are often higher to account for the salesman’s commission
  • Extra costs for documentation fees
  • A down payment may be required
  • Generally less flexible when it comes to extra car payments or early loan repayment

2. Financing through a bank

Many major banks offer used car financing, including CIBC, Scotiabank, TD Canada Trust, RBC and BMO. You can also get used car financing through a credit union. Going through a bank can be straight forward if you already have an account with it, but you should still shop around for the best deal, as competing banks will offer different used car loan rates.

Pros
  • It can be convenient to have all your finances under one roof
  • More flexible about missed payments, making extra repayments or paying off your loan early
  • May offer longer loan terms
  • Can potentially use when buying from a private seller
Cons
  • Less open to negotiating used car loan rates
  • Generally requires good to excellent credit to qualify
  • Longer application and approval process

3. Financing through an online lender

There are many legit online car loan providers willing to finance used cars. Even if you end up going with dealership or bank financing, getting pre-approved for multiple offers online saves time compared to visiting multiple dealerships or banks, and gives you leverage to negotiate and lock in the best rate. You also get to chose from a range of competitive car loan options, ranging from 1-7 years.

Pros
  • Lenders offer various rates, which means you can choose the most competitive option
  • It can be convenient to shop for a used car loan from the comfort of your home
  • The application and approval process is quick
  • Can potentially use when buying from a private seller
Cons
  • Multiple hard pulls on your credit from car loan applications can drop your credit score

The 3 types of used car loans

Generally, you’ll have a few options when it comes to the types of car loans available for used cars. These include:

  • Secured car loan. Most car loans are secured car loans, using the car as collateral. This option can help you qualify for a competitive rate, though you risk losing your car if you default on the loan.
  • Unsecured personal loan. Unsecured personal loans are generally offered to customers with good credit. These loans don’t require you to offer your car as collateral for the loan, but can result in higher interest rates and additional fees.
  • Home equity finance. Home equity financing is another option that allows a homeowner to borrow against the equity value of their home. This option can be risky because you’re putting your house up as collateral.

Find out more about using a personal loan to finance a used car in our comprehensive guide.

Can I get a used car loan with bad credit?

It’s possible to get a used car loan with bad or poor credit. Although banks and credit unions would likely not accept applicants with bad credit, there are other lenders who can, such as online lenders. There are online lenders who can work with consumers with bad credit, no credit or bankruptcy as long as they have a steady source of employment income. Keep in mind, however, that bad credit loans often come with steeper interest rates because of the borrower’s higher risk of defaulting. Interest rates can vary depending on the borrower’s personal factors, but if you have bad credit, they can range from 10% to 20% or perhaps more.

How to get a used car loan with bad credit

  1. If you can, improve your credit first. Before applying for a used car loan, pay down your credit card debt as much as you can and make sure you don’t have any late bill payments. Learn more about how to improve your credit.
  2. Check your credit score. Do you know what your credit score is? There are several free or paid tools available online that can keep track of your credit score. If you have poor credit, these tools can especially help you see if your credit is improving as you make your payments. Check your credit score now.
  3. Set your budget. Before applying for a used car loan, find out exactly how much you can afford to borrow.
  4. Apply with a cosigner. A cosigner is someone with good finances who agrees to sign the loan with you. By signing, they agree to cover loan payments on your behalf should you default on them.
  5. Apply for pre-approval with several lenders. Applying with multiple lenders will help you compare rates and terms to decide which used car loan is best for you.

What are the limits on used car loans?

Lenders typically have minimum and maximum loan amounts, and often set limits to the age and mileage of vehicles that qualify for loan approval. Your credit score will also affect your chances of getting a car loan. A score of 630 or more gives you a good chance of securing a loan. But if your score is below 630, it will be difficult to gain approval. Find out how you can improve your credit score here.

Here’s what you can expect from some popular used car loan providers.

Loan ProviderMax. age of carMin. loan amountMax. loan amount
CarsFast Car LoansVaries by lender$500$75,000Go to site
Car Loans CanadaUsually 7 years old$7,500$55,000
Loans Canada Car LoansVaries by lender$500$35,000Go to site
Carloans411 Car LoansVaries by lender$500$50,000Go to site
LoanConnect Car LoansVaries by lender$500$50,000Go to site
Auto Arriba Car Loans10 years old$500$100,000
Fairstone Secured Personal LoanNot specified$5,000$50,000Go to site

What are the pros and cons of financing a used car?

Pros
  • You don’t need the full amount to buy the car.
  • Loans help you build and improve your credit score as long as you make payments on time and in full.
  • Compared to leasing a car, taking out a loan helps you build ownership of your car.
  • You can get a great price on a used car by negotiating in a private sale or at a dealership.
  • You have various financing options to consider — both secured and unsecured.
Cons
  • Could pay a high monthly payment with high interest rates.
  • Used car financing can be more expensive and restrictive than financing for new cars.
  • You could be buying a car with lots of problems.
  • The age of the used car affects its resale value.

Should I put a deposit on a used car?

Some lenders might request a deposit. This usually happens in three situations:

  • If you don’t have financing available after you negotiate the purchase price.
  • If the dealer needs to order your vehicle from a factory.
  • If the dealer you’re working with needs to exchange vehicles with another dealer before you get your car.

In any of these cases, it may be necessary to leave a deposit for your used car, but that doesn’t mean you have to settle for the dealer’s terms. Every step of a car purchase can be negotiated, and that includes your deposit.

Tips for making a deposit on a used car

  • Make sure it’s refundable. Read the terms of your contract carefully and have a sales manager change it if you find that it’s nonrefundable. That way you can back out if you don’t have financing on hand right away or haven’t had the car inspected.
  • Make sure it’s not listed as a partial payment. Deposits should never be listed on your contract as partial payments — it’s not a down payment on your car. This makes it easier for you to walk away from the deal, should you change your mind.
  • Pay with a credit card. You can easily dispute the charge with your credit card company if you decide to not go through with the sale.

How to compare used car financing options

Securing the right financing is as important as finding the right car. Here are the main components of a loan you should consider:

  • Interest rate. The interest rate directly affects your monthly car loan payment. Most lenders will offer a range of used car loan rates, so be sure to understand your credit score and confirm that the rate you’re given is actually a good deal.
  • Fees. Lenders can charge a range of fees on used car loans — termination fees, origination fees, loan maintenance fees and more. Review all the extra costs that come with your used car loan since these will impact your APR and the amount you end up paying overall.
  • Flexibility. Can you make additional and lump-sum payments during your loan term? Are you able to repay your loan early without penalty? Is there a grace period for late payments? Make sure your loan is flexible so it can mesh with whatever life throws your way.

    Higher used car loan interest rates

    Used cars might be cheaper, but used car loans tend to come with higher interest rates. That’s because car loans are secured by the value of the vehicle you’re buying. Since used cars have less value, your collateral isn’t worth as much. This makes lenders see you as more of a risk than a new car buyer, who has higher collateral.

    Lenders tend to give borrowers with more valuable collateral lower interest rates because they stand to gain something more valuable if the borrower can’t pay back their loan.

    How to use depreciation in your favor

    Depreciation is often cited as the single largest expense when buying a new car. With over 40% of a new car’s value being lost to depreciation in the first 3 years, you can often find a better deal on a slightly used model.

    You can use websites like Canadian Black Book, Auto Trader Canada, and Kijiji Autos to research the average price of the car you’re interested in. You’ll be able to see its original value and its estimated used value, which will then give you an idea of how much you should be paying.

    By keeping depreciation in mind, you can use it in your favor to score a good deal. You’ll also be able to see the car’s estimated rate of depreciation, which can help guide you toward a car that won’t lose its value while you drive it — meaning you can sell it for a better price once you want to upgrade to a new model.

    How to buy a financed used car in 6 steps

    Follow these 6 steps to buy a used car with financing.

    Bottom line

    Whenever you apply for a used car loan, take the time to read the terms and conditions. It’s important to be aware of all fees and charges, as well as any restrictions on the vehicle or loan.

    A used car can be a reliable option when you’re looking for your next set of wheels — as long as you make sure you get the right used car financing.

    Frequently asked questions about used car financing


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