{"id":867240,"date":"2020-07-09T17:53:11","date_gmt":"2020-07-09T21:53:11","guid":{"rendered":"https:\/\/www.finder.com\/ca\/?p=867240"},"modified":"2026-09-21T17:31:29","modified_gmt":"2026-09-21T21:31:29","slug":"subprime-auto-loans","status":"publish","type":"post","link":"https:\/\/www.finder.com\/ca\/car-loans\/bad-credit\/subprime-auto-loans","title":{"rendered":"Subprime Auto Loans in Canada"},"content":{"rendered":"<p>Subprime auto loans can give borrowers another way to finance a vehicle when they have low credit scores. The tradeoff is that these loans typically come with higher interest rates, which can increase the overall cost of the car.<\/p><p>Compare your loan options in Canada.<\/p><div class=\"keyTakeaways\">\n  <div class=\"keyTakeaways__header\">\n          <svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"32\" height=\"21\" viewBox=\"0 0 314.16 201.03\" fill=\"none\">\n  <path d=\"M212.32,190.62c-19.66,0-38.8-6.44-54.42-18.24-15.63,11.79-34.77,18.24-54.42,18.24-49.84,0-90.39-40.55-90.39-90.39V9.83h199.24c49.84,0,90.39,40.55,90.39,90.39s-40.55,90.39-90.39,90.39Z\" fill=\"white\"\/>\n  <path d=\"M212.32,15.9c46.57,0,84.33,37.75,84.33,84.33h0c0,46.57-37.75,84.33-84.33,84.33h0c-20.75,0-39.74-7.51-54.42-19.94-14.69,12.43-33.68,19.94-54.42,19.94h0c-46.57,0-84.33-37.75-84.33-84.33V15.9h193.18M212.32,3.76H7.01v96.46c0,53.19,43.27,96.46,96.46,96.46,19.47,0,38.46-5.92,54.43-16.84,15.96,10.91,34.95,16.84,54.42,16.84,53.19,0,96.46-43.27,96.46-96.46S265.51,3.76,212.32,3.76h0Z\" fill=\"#232320\"\/>\n  <path d=\"M216.34,90.21c.19-1.69,1.76-2.87,3.43-2.6,11.91,1.94,22.41-7.31,20.93-20.1-.45-3.93-2.28-6.56-4.43-9.31-1.05-1.35-.74-3.34.71-4.26,15.6-9.82,31.64-1.91,40.78,13.29,11.21,18.64,11.54,47.15.53,65.94-15.41,26.3-42.91,23.48-56.04-3.04-6.09-12.29-7.47-26.4-5.92-39.93Z\" fill=\"#232320\"\/>\n  <path d=\"M105.92,90.21c.19-1.69,1.76-2.87,3.43-2.6,11.91,1.94,22.41-7.31,20.93-20.1-.45-3.93-2.28-6.56-4.43-9.31-1.05-1.35-.74-3.34.71-4.26,15.6-9.82,31.64-1.91,40.78,13.29,11.21,18.64,11.54,47.15.53,65.94-15.41,26.3-42.91,23.48-56.04-3.04-6.09-12.29-7.47-26.4-5.92-39.93Z\" fill=\"#232320\"\/>\n<\/svg>        <h3 data-toc=\"false\">Key takeaways<\/h3>\n  <\/div>\n\n    <ul>\n          <li>A subprime auto loan isn&#8217;t your only option. You could consider an unsecured personal loan, which won&#8217;t put your car at risk if you default, or a home equity loan, which usually has better rates but puts your home at risk.<\/li>\n          <li>If you can&#8217;t keep up with your subprime auto loan payments, contact your lender straight away. They may be able to extend your loan term to lower your payments, but you&#8217;ll pay more interest over the course of the loan.<\/li>\n          <li>There&#8217;s no credit score too low to apply for a car loan in Canada. If you don&#8217;t qualify for a subprime auto loan, a bad credit car loan provider may still approve you based on your income, but you should expect a high interest rate either way.<\/li>\n      <\/ul>\n\n  \n  <\/div>\n<h3>What are subprime auto loans?<\/h3><p>A subprime auto loan is car financing for borrowers with low credit scores below 660. Since subprime auto loans are offered to risky borrowers, the interest rates can be high. Like other auto financing, subprime auto loans are secured by the used or new car you buy.<\/p><p>Subprime car loans can be helpful for borrowers looking to get behind the wheel of a car while simultaneously improving their credit score. It looks good to lenders if you make repayments on time and in full, which positively impacts your credit report.<\/p><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Related: <\/span><a href=\"https:\/\/www.finder.com\/ca\/car-loans\/bad-credit\" style=\"text-decoration:underline; font-size:0.9em;\">Compare the best auto loans for bad credit<\/a>\n<\/div>\n<\/article><h3>What are subprime auto loan interest rates in Canada?<\/h3><p>Interest rates for subprime auto loans in Canada generally range from 12.9%&#8211;29.99%. Here&#8217;s how much financing a $25,000 subprime auto loan could cost with a 16% and 26% APR. This is just an example. Your actual rate and total interest cost could vary.<\/p><table class=\"luna-table luna-table--responsiveList\"><thead class=\"luna-table__header\"><tr><th scope=\"col\"><\/th><th scope=\"col\">Example 1<\/th><th scope=\"col\">Example 2<\/th><\/tr><\/thead><tbody><tr><td>Loan amount<\/td><td>$25,000<\/td><td>$25,000<\/td><\/tr><tr><td>APR<\/td><td>16%<\/td><td>26%<\/td><\/tr><tr><td>Loan term<\/td><td>60 months<\/td><td>60 months<\/td><\/tr><tr><td>Monthly payment<\/td><td>$607.95<\/td><td>$748.51<\/td><\/tr><tr><td>Total interest paid<\/td><td>$11,477.09<\/td><td>$19,910.70<\/td><\/tr><\/tbody><\/table><h3 id=\"calc\">Can I afford subprime auto loan payments?<\/h3><p>Use this calculator to find out how much your payments might be.<\/p><!DOCTYPE html>\n<html lang=\"en\">\n<head>\n    <meta charset=\"UTF-8\">\n    <meta name=\"viewport\" content=\"width=device-width, initial-scale=1.0\">\n    <title>Auto Loan Payment Calculator<\/title>\n    <style>\n        :root {\n            --primary-color: #1D53FF;\n            --primary-hover: #113ecc;\n            --text-color: #333333;\n            --bg-light: #f9f9f9;\n            --border-color: #cccccc;\n            --white: #ffffff;\n        }\n\n\n        .phone-calculator-container {\n            font-family: \"Modern Era\", sans-serif;\n            max-width: 650px;\n            margin: 20px auto;\n            background: var(--white);\n            border: 1px solid var(--border-color);\n            border-radius: 8px;\n            padding: 25px;\n            box-shadow: 0 4px 12px rgba(0,0,0,0.05);\n            color: var(--text-color);\n            box-sizing: border-box;\n        }\n\n\n        .phone-calculator-container h2 {\n            margin-top: 0;\n            color: var(--text-color);\n            font-size: 24px;\n            border-bottom: 2px solid var(--bg-light);\n            padding-bottom: 10px;\n        }\n\n\n        .calc-grid {\n            display: grid;\n            grid-template-columns: repeat(auto-fit, minmax(240px, 1fr));\n            gap: 15px;\n            margin-bottom: 20px;\n        }\n\n\n        @media (max-width: 480px) {\n            .phone-calculator-container {\n                padding: 16px;\n                margin: 10px auto;\n            }\n\n            .phone-calculator-container h2 {\n                font-size: 20px;\n            }\n        }\n\n\n        .input-group {\n            display: flex;\n            flex-direction: column;\n            min-width: 0;\n        }\n\n\n        .input-group.full-width {\n            grid-column: 1 \/ -1;\n        }\n\n\n        .input-group label {\n            font-size: 14px;\n            font-weight: 600;\n            margin-bottom: 5px;\n        }\n\n\n        .input-wrapper {\n            position: relative;\n            display: flex;\n            align-items: center;\n            min-width: 0;\n        }\n\n\n        .input-prefix, .input-suffix {\n            position: absolute;\n            font-size: 16px;\n            color: #666;\n        }\n\n        .input-prefix { left: 12px; }\n        .input-suffix { right: 12px; }\n\n\n        .input-wrapper input {\n            width: 100%;\n            min-width: 0;\n            padding: 10px 12px;\n            font-size: 16px;\n            border: 1px solid var(--border-color);\n            border-radius: 4px;\n            box-sizing: border-box;\n            font-family: \"Modern Era\", sans-serif;\n        }\n\n\n        .has-prefix input { padding-left: 28px; }\n        .has-suffix input { padding-right: 32px; }\n\n\n        .range-wrapper {\n            display: flex;\n            align-items: center;\n            gap: 15px;\n        }\n\n\n        .range-wrapper input[type=\"range\"] {\n            flex: 1;\n            min-width: 0;\n            accent-color: var(--primary-color);\n        }\n\n\n        .range-value {\n            font-weight: bold;\n            font-size: 16px;\n            width: 50px;\n            text-align: right;\n            flex-shrink: 0;\n        }\n\n\n        .summary-box {\n            background-color: var(--bg-light);\n            border-left: 4px solid var(--primary-color);\n            padding: 15px;\n            margin-bottom: 25px;\n            border-radius: 0 4px 4px 0;\n        }\n\n\n        .summary-box h3 {\n            margin: 0 0 5px 0;\n            font-size: 14px;\n            text-transform: uppercase;\n            letter-spacing: 0.5px;\n            color: #666;\n        }\n\n\n        .summary-box .amount {\n            font-size: 28px;\n            font-weight: bold;\n            color: var(--text-color);\n        }\n\n\n        .results-table {\n            width: 100%;\n            border-collapse: collapse;\n            margin-top: 15px;\n            display: block;\n            overflow-x: auto;\n            -webkit-overflow-scrolling: touch;\n        }\n\n\n        .results-table th, .results-table td {\n            padding: 12px;\n            text-align: left;\n            border-bottom: 1px solid var(--border-color);\n        }\n\n        .results-table td { white-space: nowrap; }\n\n\n        .results-table th {\n            background-color: var(--bg-light);\n            font-weight: 600;\n            font-size: 14px;\n        }\n\n\n        .results-table td { font-size: 15px; }\n        .results-table tr:last-child td { border-bottom: none; }\n        .highlight-payment { font-weight: bold; color: var(--primary-color); }\n\n        @media (max-width: 480px) {\n            .results-table th, .results-table td {\n                padding: 8px 6px;\n            }\n\n            .results-table th {\n                font-size: 12px;\n            }\n\n            .results-table td {\n                font-size: 13px;\n            }\n        }\n\n        .disclaimer {\n            font-size: 11px;\n            color: #777;\n            margin-top: 25px;\n            line-height: 1.4;\n        }\n    <\/style>\n<\/head>\n<body>\n\n\n<div class=\"phone-calculator-container\">\n    <h2>Auto Loan Payment Calculator<\/h2>\n\n    <div class=\"calc-grid\">\n        <div class=\"input-group\">\n            <label for=\"vehiclePrice\">Vehicle Price<\/label>\n            <div class=\"input-wrapper has-prefix\">\n                <span class=\"input-prefix\">$<\/span>\n                <input type=\"number\" id=\"vehiclePrice\" value=\"25000\" min=\"0\" step=\"100\">\n            <\/div>\n        <\/div>\n\n\n        <div class=\"input-group\">\n            <label for=\"tradeIn\">Trade-In Value<\/label>\n            <div class=\"input-wrapper has-prefix\">\n                <span class=\"input-prefix\">$<\/span>\n                <input type=\"number\" id=\"tradeIn\" value=\"0\" min=\"0\" step=\"100\">\n            <\/div>\n        <\/div>\n\n\n        <div class=\"input-group\">\n            <label for=\"existingLoan\">Existing Vehicle Loan Balance<\/label>\n            <div class=\"input-wrapper has-prefix\">\n                <span class=\"input-prefix\">$<\/span>\n                <input type=\"number\" id=\"existingLoan\" value=\"0\" min=\"0\" step=\"100\">\n            <\/div>\n        <\/div>\n\n\n        <div class=\"input-group\">\n            <label for=\"downPayment\">Down Payment<\/label>\n            <div class=\"input-wrapper has-prefix\">\n                <span class=\"input-prefix\">$<\/span>\n                <input type=\"number\" id=\"downPayment\" value=\"2000\" min=\"0\" step=\"100\">\n            <\/div>\n        <\/div>\n\n\n        <div class=\"input-group\">\n            <label for=\"taxRate\">Sales Tax<\/label>\n            <div class=\"input-wrapper has-suffix\">\n                <input type=\"number\" id=\"taxRate\" value=\"13\" min=\"0\" max=\"30\" step=\"0.1\">\n                <span class=\"input-suffix\">%<\/span>\n            <\/div>\n        <\/div>\n\n\n        <div class=\"input-group\">\n            <label for=\"interestRate\">Expected Interest Rate<\/label>\n            <div class=\"input-wrapper has-suffix\">\n                <input type=\"number\" id=\"interestRate\" value=\"5.99\" min=\"0\" max=\"25\" step=\"0.01\">\n                <span class=\"input-suffix\">%<\/span>\n            <\/div>\n        <\/div>\n\n\n        <div class=\"input-group full-width\">\n            <label for=\"loanTerm\">Duration of Loan (Months)<\/label>\n            <div class=\"range-wrapper\">\n                <input type=\"range\" id=\"loanTerm\" min=\"12\" max=\"96\" step=\"12\" value=\"60\">\n                <span class=\"range-value\" id=\"termValue\">60<\/span>\n            <\/div>\n        <\/div>\n    <\/div>\n\n\n    <div class=\"summary-box\">\n        <h3>Total Amount Financed<\/h3>\n        <div class=\"amount\" id=\"totalFinanced\">$0.00<\/div>\n    <\/div>\n\n\n    <h3>Estimated Payments<\/h3>\n    <table class=\"results-table\">\n        <thead>\n            <tr>\n                <th>Payment Frequency<\/th>\n                <th>Payment Amount<\/th>\n                <th>Total Interest Paid<\/th>\n            <\/tr>\n        <\/thead>\n        <tbody>\n            <tr data-frequency=\"12\">\n                <td>Monthly<\/td>\n                <td class=\"highlight-payment payment-cell\">$0.00<\/td>\n                <td class=\"interest-cell\">$0.00<\/td>\n            <\/tr>\n            <tr data-frequency=\"26\">\n                <td>Bi-weekly<\/td>\n                <td class=\"highlight-payment payment-cell\">$0.00<\/td>\n                <td class=\"interest-cell\">$0.00<\/td>\n            <\/tr>\n            <tr data-frequency=\"52\">\n                <td>Weekly<\/td>\n                <td class=\"highlight-payment payment-cell\">$0.00<\/td>\n                <td class=\"interest-cell\">$0.00<\/td>\n            <\/tr>\n        <\/tbody>\n    <\/table>\n\n\n    <div class=\"disclaimer\">\n        * Calculation results are approximations and for informational purposes only.\n    <\/div>\n<\/div>\n\n\n<script>\n    document.addEventListener(\"DOMContentLoaded\", function() {\n        \/\/ Cache DOM selectors efficiently\n        const els = {\n            price: document.getElementById(\"vehiclePrice\"),\n            trade: document.getElementById(\"tradeIn\"),\n            lien: document.getElementById(\"existingLoan\"),\n            down: document.getElementById(\"downPayment\"),\n            tax: document.getElementById(\"taxRate\"),\n            rate: document.getElementById(\"interestRate\"),\n            term: document.getElementById(\"loanTerm\"),\n            termLabel: document.getElementById(\"termValue\"),\n            totalFinanced: document.getElementById(\"totalFinanced\"),\n            rows: document.querySelectorAll(\".results-table tbody tr\")\n        };\n\n\n        const formatter = new Intl.NumberFormat('en-CA', { style: 'currency', currency: 'CAD' });\n\n\n        \/\/ Combined listeners\n        [els.price, els.trade, els.lien, els.down, els.tax, els.rate].forEach(input =>\n            input.addEventListener(\"input\", calculateLoan)\n        );\n\n        els.term.addEventListener(\"input\", function() {\n            els.termLabel.textContent = this.value;\n            calculateLoan();\n        });\n\n\n        function calculateFrequency(principal, annualRate, totalMonths, periodsPerYear) {\n            const totalPayments = (totalMonths \/ 12) * periodsPerYear;\n\n            \/\/ Standard Simple Compounding used for typical Auto Loans:\n            const periodicRate = annualRate \/ periodsPerYear;\n\n\n            \/\/ NOTE: If you need strict legal Canadian Mortgage\/Loan standard compounding, uncomment below:\n            \/\/ const periodicRate = Math.pow(1 + annualRate \/ 2, 2 \/ periodsPerYear) - 1;\n\n\n            if (principal <= 0) return { payment: 0, interest: 0 };\n            if (periodicRate === 0) return { payment: principal \/ totalPayments, interest: 0 };\n\n\n            const compoundFactor = Math.pow(1 + periodicRate, totalPayments);\n            const payment = principal * (periodicRate * compoundFactor) \/ (compoundFactor - 1);\n            const totalInterest = (payment * totalPayments) - principal;\n\n\n            return { payment, interest: Math.max(0, totalInterest) };\n        }\n\n\n        function calculateLoan() {\n            const price = parseFloat(els.price.value) || 0;\n            const trade = parseFloat(els.trade.value) || 0;\n            const lien = parseFloat(els.lien.value) || 0;\n            const down = parseFloat(els.down.value) || 0;\n            const tax = (parseFloat(els.tax.value) || 0) \/ 100;\n            const annualRate = (parseFloat(els.rate.value) || 0) \/ 100;\n            const months = parseInt(els.term.value) || 60;\n\n\n            const netPrice = Math.max(0, price - trade);\n            const totalFinanced = Math.max(0, (netPrice * (1 + tax)) + lien - down);\n\n\n            els.totalFinanced.textContent = formatter.format(totalFinanced);\n\n\n            \/\/ Loop through rows dynamically instead of copy-pasting code for each frequency\n            els.rows.forEach(row => {\n                const freq = parseInt(row.getAttribute(\"data-frequency\"));\n                const res = calculateFrequency(totalFinanced, annualRate, months, freq);\n\n                row.querySelector(\".payment-cell\").textContent = formatter.format(res.payment);\n                row.querySelector(\".interest-cell\").textContent = formatter.format(res.interest);\n            });\n        }\n\n\n        calculateLoan(); \/\/ Init\n    });\n<\/script>\n\n\n<\/body>\n<\/html>\n\n<h3>How to get the best deal on a subprime auto loan<\/h3><p>Subprime auto loans are expensive, but there are a few steps you can take to reduce the overall cost and ensure you&#8217;re borrowing from a legit lender.<\/p><h4>Compare multiple lenders<\/h4><p>The easiest way to get a good deal\u2014or avoid a bad one\u2014is to compare different lenders. You&#8217;ll see what rates you can expect and get a clear view of potential fees before setting foot on the car lot, helping you make a better decision. Be sure to check customer reviews and complaints for insight into how lenders treat their customers.<\/p><h4>Shop used instead of new<\/h4><p>While used car loans tend to have higher rates than new car loans, buying used means you won&#8217;t need to borrow as much and will have more manageable monthly payments.<\/p><h4>Keep an eye on fees<\/h4><p>Ask potential lenders about fees. Many will charge origination (loan set up), prepayment and late fees that quickly add to the total cost of your loan. Use our <a class=\"scroll\" href=\"#calc\">car loan monthly payment calculator<\/a> to compare the loan costs to get an idea of which offers a better deal.<\/p><h4>Visit the dealership with a loan in hand<\/h4><p>Visiting a dealership with <a href=\"https:\/\/www.finder.com\/ca\/car-loans\/pre-approved-car-loan\" rel=\"noopener noreferrer\">car loan pre-approval<\/a> from another lender can put you in a position to negotiate. You might score a better deal if the salesperson can match or beat your pre-approval offer.<\/p><h4>Apply with a cosigner<\/h4><p>You might be able to score a lower interest rate by applying with a cosigner. However, since they&#8217;re taking on considerable risk if you default, discuss your budget with them and make it clear how you plan to afford the monthly repayments.<\/p><h4>Save up for a down payment<\/h4><p>A large down payment means you can borrow less and save on interest charges. A good rule of thumb is to save up 20% of your car&#8217;s value, but even a 10% down payment can help.<\/p><h3>What do I need to apply for a subprime auto loan?<\/h3><p>Exact eligibility criteria will vary between subprime auto lenders in Canada, but you generally need to meet the following requirements:<\/p><ul><li>Be the age of majority in your province or territory (18 or 19)<\/li><li>Have a Canadian residential address<\/li><li>Have a steady source of income ($1,500 \u2013 $1,800 is recommended)<\/li><\/ul><p>Information you&#8217;ll need to provide at some point in the application process includes:<\/p><ul class=\"list-7\"><li>Your name, contact information and address<\/li><li>Your housing situation (do you rent or own your home, and how long have you lived there?)<\/li><li>Your employment and income details<\/li><li>Valid government-issued ID such as a driver&#8217;s licence or passport<\/li><li>Information about your current debts<\/li><\/ul><h3>How to get a subprime auto loan online<\/h3><ol><li><b>Visit the lender&#8217;s website.<\/b> Fill out your lender&#8217;s online application with basic personal and financial information.<\/li><li><strong>Find out if you qualify.<\/strong> A customer service representative will reach out to discuss your application, including possible interest rates and terms.<\/li><li><b>Gather supporting documentation.<\/b> If you want to move forward, provide documents to verify your application details.<\/li><li><b>Wait for a decision.<\/b> Usually, it takes a day to two to find out if you&#8217;ve been approved for a subprime auto loan.<\/li><li><b>Review and sign the contract.<\/b> If approved, your lender will send you a loan contract for review. This contract contains vital information including your loan term, repayment schedule and interest rate, so take your time reviewing it. If you&#8217;re comfortable, sign and return the contract.<\/li><\/ol><article class=\"luna-card luna-card--primary luna-card--border\">\n  <div class=\"luna-card__block\" style=\"padding:0.7em\">\n<span style=\"font-size:0.9em; font-weight: 800; font-style: italic; text-transform: uppercase;\">Related: <\/span><a href=\"https:\/\/www.finder.com\/ca\/car-loans\/online-car-dealers-canada\" style=\"text-decoration:underline; font-size:0.9em;\">Buying a new car? Check out these online car dealers.<\/a>\n<\/div>\n<\/article><h3>Benefits and drawbacks of subprime auto loans<\/h3><div class=\"u-grid\"><div class=\"u-grid__col u-1\/2@s\"><h4>Benefits<\/h4><ul class=\"list-1\"><li><strong>Purchase a car.<\/strong> Subprime car loans make it possible to buy a car even if you&#8217;re normally rejected by major financial institutions.<\/li><li><strong>Loan terms.<\/strong> Get a loan term of up to 7 or 8 years, but keep in mind that, the longer the term, the more interest you pay overall.<\/li><li><strong>Loan amounts.<\/strong> Some lenders offer up to $75,000.<\/li><li><strong>Compare your options.<\/strong> Many subprime lending platforms, such as those in this guide, allow you to compare multiple subprime auto loans with one application.<\/li><\/ul><\/div><div class=\"u-grid__col u-1\/2@s\"><h4>What to watch out for<\/h4><ul class=\"list-3\"><li><strong>High interest rates.<\/strong> Lenders charge high interest rates on subprime car loans, because there&#8217;s a chance that bad credit borrowers will default.<\/li><li><strong>Additional fees.<\/strong> Check if the lender charges an origination fee to process your loan or a prepayment penalty if you repay your loan early.<\/li><li><strong>Risk of default.<\/strong> A high-interest loan is expensive, and your credit score will take a hit if you miss payments.<\/li><\/ul><\/div><\/div><h3>Are there alternatives to subprime auto loans?<\/h3><p>yes, there are two alternatives to getting a subprime auto loan, although both can be risky:<\/p><ul><li><b><a href=\"https:\/\/www.finder.com\/ca\/personal-loans\/unsecured-loans-canada\" rel=\"noopener noreferrer\">Unsecured personal loan<\/a>.<\/b> Unlike an auto loan, you won&#8217;t lose your car if you default on an unsecured personal loan. However, it can be more difficult to qualify for a personal loan, and rates are likely higher than a subprime auto loan since it poses more risk to the lender.<\/li><li><b>Home equity loan.<\/b> If you have equity in your home, you could use it to purchase a car. A home equity loan generally has better rates than a subprime auto loan. But it comes with the risk of losing your house if you default.<\/li><\/ul><article class=\"luna-card luna-card--alt\"><div class=\"luna-card__block\"><h4>Should you refinance your subprime auto loan?<\/h4><p>Yes, but only if your credit score has increased since you first got your subprime car loan. <a href=\"https:\/\/www.finder.com\/ca\/car-loans\/refinancing\">Refinancing your auto loan<\/a> once your financial situation has improved can potentially help you lock in better loan terms.<\/p><p>If you qualify for lower rates from a different lender, you&#8217;ll decrease the total cost of your loan. Considering that the average car loan interest rate in Canada is 6.57%, you could save hundreds or even thousands of dollars by switching from a subprime rate of 12.9%\u201329.99%.<\/p><\/div><\/article><h3>Is it safe to borrow a subprime auto loan?<\/h3><p>It depends on the subprime lender and your financial situation. The high rates that typically come with subprime auto loans can be tough to pay. Missing payments could lead to hefty late fees or even repossession of your car.<\/p><p>Subprime loans are especially risky if you borrow from a buy-here, pay-here dealership, which are less regulated than other lenders. Not every dealership offering subprime auto loans is shady, but you should still research customer complaints on sites like the Better Business Bureau and Trustpilot. If you go with dealership financing, look for hidden fees or clauses in your contract.<\/p><p>Lookout for subprime lenders pushing large loan amounts and absurdly high rates. It could be a sign the lender is banking on you defaulting and plans to sell your debt for a profit. Protect yourself from predatory lending by comparing all your options, borrowing only what you need and avoiding anyone who pressures you to sign or has unclear terms. Also <a href=\"https:\/\/www.finder.com\/ca\/car-loans\/common-car-loan-scams\">learn about car loan scams<\/a> you could encounter.<\/p><h3>Bottom line<\/h3><p>Subprime auto loans can be beneficial if you have no other options. <a class=\"scroll\" href=\"#comparison-table\">Comparing lenders<\/a> and paying close attention to the terms of your contract can ensure you&#8217;re not taken for a ride. To learn more about how it all works, check out <a href=\"https:\/\/www.finder.com\/ca\/car-loans\" rel=\"noopener noreferrer\">our guide to car loans<\/a>.<\/p><h3>Frequently asked questions<\/h3><ul class=\"luna-accordionGroup accordionGroup\">\n\t<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000000\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000000\">\n                <span class=\"luna-accordion__title\">What do I do if I can't repay my subprime auto loan?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000000\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>If you're unable to repay your subprime car loan, contact your lender immediately to discuss your options. They may be willing to extend your loan term to help make your monthly payments more affordable. Just keep in mind this will increase the total cost of your loan.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000001\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000001\">\n                <span class=\"luna-accordion__title\">What credit score is too low for a car loan?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000001\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>There's no credit score that is too low for a car loan. If your credit score is under 500 and you can't qualify for some subprime auto loans, you might qualify for financing with a bad credit car loan provider.<\/p><p>These lenders consider your income more than your credit score. Bear in mind that, like subprime auto loans, bad credit car loans come with high interest rates. Learn more in our guide to <a href=\"https:\/\/www.finder.com\/ca\/car-loans\/bad-credit\/get-car-loan-without-cosigner\">getting a car loan with bad credit and no cosigner<\/a>.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n<li class=\"luna-accordion\" data-accordion=\"accordion\">\n    <div class=\"luna-accordion__summary\">\n        <h4 class=\"luna-accordion__heading\">\n            <button class=\"luna-accordion__action collapsed\" aria-expanded=\"false\" aria-controls=\"faq-builder-0000000002\" data-toggle=\"collapse\" data-target=\"#faq-builder-0000000002\">\n                <span class=\"luna-accordion__title\">Will having bad credit affect my car insurance rates?<\/span>\n                <svg class=\"luna-icon\" aria-hidden=\"true\">\n                    <use xlink:href=\"#chevron-down\" data-accordion-icon=\"show\"><\/use>\n                    <use xlink:href=\"#chevron-up\" data-accordion-icon=\"hide\" class=\"is-hidden\"><\/use>\n                <\/svg>\n            <\/button>\n        <\/h4>\n    <\/div>\n    <div class=\"luna-accordion__details collapse\" aria-hidden=\"true\" id=\"faq-builder-0000000002\" data-accordion=\"details\">\n        <div class=\"accordionContent\">\n            <div>\n                <p>Unfortunately, it might. Depending on your province, having a poor credit score could raise your car insurance rate.<\/p>\n            <\/div>\n        <\/div>\n    <\/div>\n<\/li>\n\n<\/ul>\n<div id=\"sources\" style=\"position: relative;\"><h3 style=\"position: absolute; width: 1px; height: 1px; padding: 0; margin: -1px; overflow: hidden; clip: rect(0,0,0,0); white-space: nowrap; border: 0;\">Sources<\/h3>\n<div id=\"lazy0000000003\"><\/div>\n<script type=\"application\/json\" id=\"lazyloaded-assets-json-lazy0000000003\" class=\"lazyloaded-assets-json\">{\"critical-scripts\":[],\"scripts\":[\"https:\\\/\\\/www.finder.com\\\/parent-theme\\\/shortcodes\\\/article-source\\\/prod\\\/article-source.de087a0da9824e407767.js\"],\"styles\":[\"https:\\\/\\\/www.finder.com\\\/parent-theme\\\/shortcodes\\\/article-source\\\/prod\\\/article-source.87684078d471e76125dd.css\"]}<\/script><\/div>","protected":false},"excerpt":{"rendered":"<p>Explore subprime car loans in Canada, including rates, risks and alternatives for financing your next set of wheels.<\/p>\n","protected":false},"author":1000,"featured_media":1040653,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_focuskw":"subprime auto loans","_yoast_wpseo_title":"Subprime Auto Loans in Canada: Rates & Lenders | Finder Canada","_yoast_wpseo_metadesc":"Compare subprime auto lenders in Canada. 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