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How much is the average car payment in Canada? 

Find out how much you can expect to spend every month to cover the average car payment in Canada.

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Canadians will typically spend between $400 and $800 on the average car payment. Learn more about the different variables that affect your monthly car payments, and find out how you can get the best deal when you sign up for a new loan.

What is the monthly average car payment?

Your monthly average car payment in Canada will depend on a number of factors, such as the price of your vehicle, what interest rate you get and how long you take your loan out for. That said, you can expect to pay the following average car payments based on the national average from Statistics Canada. We used the average price for cars and excluded SUVs and trucks.

CarLoan amountInterest rate (national average)Term lengthMonthly average car payment
New$33,26715.23%72 months$539
Used$25,82725.23%72 months$419

1. Based on a $36,963 new car price with a 10% down payment
2. Based on a $28,697 used car price with a 10% down payment

Factors that affect your loan payment

The following factors can cause your monthly average car payment in Canada to fluctuate:

  • Down payment. Experts recommend making a down payment of around 10% to 20% to reduce your average car payments. This will shorten your term and save you money on interest in the long run.
  • Loan amount. The amount you borrow will affect how much the average car payment in Canada cost. The larger your loan principal, the more your monthly payment will be and the more interest you’ll have to pay.
  • Interest rate. Car loan interest rates in Canada are determined by your lender. You’ll usually get a lower interest rate if you have a good to excellent credit score. You’ll typically pay more if your score is below 650. New car loans also tend to come with lower interest rates than used car loans.
  • Loan term. The term of your loan is how long you have to pay it back. The longer the term, the smaller your average car payment but the more interest you’ll owe in the long run (and vice versa for shorter terms).
  • Fees. You may need to pay loan origination, late payment or early repayment fees depending on your loan. These fees can affect your average car payment if they are built into the overall price of your loan.

Can I afford the monthly car payments?

Use this calculator to find out your potential monthly payment based on the loan amount, loan term (in years) and interest rate.

Car loan monthly calculator

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Car loans in Canada

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APR

4.90% - 29.90%

Loan amount

$500 - $75,000

Loan term

12 - 96 months

Min. credit score

300

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APR

From 3.90%

Loan amount

$7,500 - No Max.

Loan term

12 - 96 months

Min. credit score

580

How much do Canadians spend on new cars by province?

The average price that Canadians spent on new cars, SUVs and trucks as of December 2021 is outlined below.

LocationAverage car priceAverage interest rateAverage car payment per month (72 months)
Canada$50,7585.23%$741
British Columbia$53,3875.23%$779
Alberta$54,8595.23%$800
Ontario$49,8145.23%$727
Manitoba and Saskatchewan$54,7235.23%$798
Atlantic Provinces$44,9355.23%$656
Quebec$45,9755.23%$671

For the illustration above, we applied a 10% down payment for each car price.

Snapshot of the average car payment in Canada

The table below shows an example of what an average car payment in Canada would look like if the borrower buys a new or used vehicle at different rates.

New car

Used car

Loan amount

$50,758

$33,240

Interest rate

3.99%

5.99%

Loan term

72 months

72 months

Average car payment

$715

$496

Total interest paid

$5,762

$5,771

Credit score

GoodGood

For the illustration above, we applied a 10% down payment for each car price.

Interest rate plays a big role in how much you’ll pay for your loan. It’s also important to note that used cars typically come with higher interest rates, so keep this in mind when searching for a vehicle. That said, used cars also have lower prices, so your monthly payments will be smaller.

What is a good car payment?

A good car payment is one that comes with a low interest rate and gives you a monthly payment that you can afford. Your overall price will be determined by the price of your vehicle so you should try to whittle that down as much as possible to get a good car payment.

A good rule of thumb is to only spend 10% to 15% of your disposable income on a car payment. This ensures that you have plenty of wiggle room to cover other expenses.

What is the average interest rate for a car loan?

According to Statistics Canada, the average car loan interest rate in Canada is 6.15%. The average buyer can expect to pay anywhere between 4% to 7% interest on their car loan, depending on whether the car is new or used and whether the interest rate is fixed or variable.

Examples of interest rates

The following example shows the amount of interest you could end up paying for a brand new $40,055 car assuming a loan term of 7 years and no down payment.

How does my term length affect my loan payments?

Your term length will vary depending on how much you can afford to pay per month, as well as how long you’d like to pay off your loan. The average term length is 72 months.

Examples of monthly payments for different loan terms

In the example below, we’ll look at how much your monthly payments will be for the same loan amount based on the length of your term. We’ll also look at how much you’ll pay in interest over the course of your loan.

Additional expenses to think about

You’ll need to consider the following expenses in addition to your average car payment in Canada when budgeting for a car:

ExpenseAverage cost
GasYou can expect to pay between $100 and $160 per month on gas (on average) depending on a number of factors, including your fuel economy and how far you drive.
InsuranceYou’ll likely pay between $100 and $200 per month on car insurance depending on what type of car you have and how much insurance you need.
Emergency repairsYou can pay several hundreds up to several thousands of dollars for emergency repairs to your vehicle depending on the damage.
Routine maintenanceYou may pay anywhere from $200 to $1,000 per year on routine maintenance. This can include oil changes, tire rotations, filter replacements and other repairs that keep your vehicle running smoothly.
Registration.Registration and licensing fees can cost anywhere from $50 to $250 per year, depending on where you live.

How to save on your average car payment in Canada

You can take the following steps to lower your average car payment in Canada:

  1. Make a larger down payment. Put more money down on your car upfront to lower your monthly average car payment.
  2. Compare prices to get the best deal. Compare multiple lenders and look for the lowest prices on the car you’re interested in to get the best deal on your loan.
  3. Negotiate with your seller or dealer. Ask your seller if they would be willing to give you a lower price for a quick sale or see if they’ll price match if you find a better deal.
  4. Trade another vehicle in. You can trade a used vehicle in with many dealers to knock thousands of dollars off of the purchase price of a new vehicle.
  5. Take a loan with a shorter term. You’ll pay less interest over the course of your loan with a shorter term (though you’ll have a higher monthly payment).

Compare car loans

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Name Product Loan Amount Interest Rate Loan Term Min. Credit Score Requirements
CarsFast Car Loans
$500 - $75,000
4.90% - 29.90%
12 - 96 months
300
Min. income of $2,000 /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.
Loans Canada Car Loans
$500 - $35,000
0% - 31.99%
24 - 120 months
300
Min. income of $1,800 /month, 3+ months employed
Compare rates from 60+ lenders.
Complete a single application to get quotes from different lenders. Bad credit, CERB and EI borrowers considered. 0% APR for new cars only, used car rates start at 7.99%.
Coast Capital Car Loan
Varies
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.
goPeer Car Loans
$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.
Clutch Car Loans
$7,500 - No max.
From 3.90%
12 - 96 months
580
3+ months employed, Max.1 bankruptcy
Pre-qualify for a loan in under 2 minutes with no impact to your credit score.
Get approved for financing in under 24 hours for the used car you want. No hidden fees. Get the vehicle delivered to your door.
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.
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.
Splash Auto Finance
$5,000 - $50,000
9.90% - 31.00%
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.
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Bottom line

The amount of money you spend on your vehicle will depend on a number of different factors. As a rule of thumb, you should try to get the shortest term and the lowest possible interest rate. You can also consider buying a less expensive car, making a larger down payment and improving your credit score as ways to help lower your average car payment in Canada.

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