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New car loans for October 2022 in Canada

Apply for a new car loan at a bank, verified by our specialists. On 03.10.2022 1 car loans. are available to you. Increase your chances of getting a loan - fill out an online application with a free credit rating check.

Offers: 1

Coast Capital Savings
Auto finance
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The rating by Finanso® is determined by our editorial team. The scoring formula includes a financial product type as well as tariffs, fees, rewards and other options.

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Effective interest rate on the product

from 4%

Loan term for the financial product

from 84 months

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Your ideal car loan with a free credit check in Canada is just a few clicks away.

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Interest rates on car loans in various Canadian provinces

Section 347 of the Criminal Code of Canada imposes the cap on the maximum allowable annualized interest - 60%. Any higher interest charged is considered usury and is illegal.

In Canada, average auto loan interest rates range from 4.5% to 10%. However, a borrower can expect to be charged up to 36%.

Factors determining car loan interest rates include the Bank of Canada’s key interest rate, the client's credit score, whether the car is new or used, the history of the vehicle, and whether the interest rate is fixed or variable. In addition, 0% interest can apply to customers with exceptional credit.

Online application for a car loan in Canada

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How to get a new car loan

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Reviews of car loans

26.05.2022 at 15:46
the application is easy and takes less then 5 mins to fill out. but the funding time is quite long. if looking for instant funding then its not here...
New car loans for October 2022

What is a new car loan?

The average cost of a new car in Canada is higher than $30,000 - is that a lot or not? It depends on household income and expenses. The average weekly wage is a little over $1,000 and the annual income is between $40,000 and $50,000. Also, some Canadians have more than one loan, such as mortgage, line of credit, credit cards, etc. All together, this reduces net income and makes it more difficult to make major purchases with one's own funds.

The loan for a new car is a long-term financing granted by the lender to the borrower under the conditions of a fixed or variable interest rate, repayability, guarantee of safe use of the car and insurance if it is used as collateral. The installments for the loan can be paid over several years, so the burden on the personal or family budget is much lower. Even if you do not yet own the car, you can use it, and some loans like installment loans allow you to make small installments and buy the car, or the leasing company sells it and the borrower takes a new car.

Reference! New car loans are usually for cars, but can also be used for trucks and RVs.

Depending on the borrower's creditworthiness, a new car loan can be applied for at a bank, a credit union (excellent and good credit is usually required) or online lenders, which some call loan sharks because they charge higher interest rates but allow borrowers with bad credit or no credit score to purchase a new car and get approved.

When applying for an auto loan, borrowers must weigh their financial situation against the value of the car they want, and then review market offers with the help of car loan calculator and the advice of a loan specialist to help you find the best option of:

  • loan payment;

  • financing options;

  • down payment amount;

  • payment schedule;

  • credit criteria;

  • maximum loan amount;

  • payment options;

  • duration of loan;

  • purchase options like conditional sales options, new or used vehicle, type of payment and trade in, etc.

When you intend to apply for an auto loan remember that there would be extra charges which reduce lender' risks:

  • additional full insurance of the vehicle;
  • borrower' insurance;
  • administration fees, etc.

The car loan is a bridge between the idea of buying a new car and getting the keys. And some people take a car loan even if they have sufficient savings, just because they do not want to sell securities or use a lot of their own money at the time of purchase.

The market for vehicles and auto loans is large and will not shrink because young Canadians want their own vehicle, some temporary foreign workers need a vehicle to operate more efficiently and cannot afford to pay for a new or used vehicle all at once from their own funds, some households need more than one car or want to upgrade their car.

Major types of new car loans

Auto loan includes a number of loan products offered by different lenders. The most common are:

  • Lease-purchase (HP), also called leasing, in which the lender acquires the vehicle and lets the borrower use it for a regular fee throughout the loan term. Until the car is fully paid off, it is as if rented. The loan is secure, meaning the car is pledged and belongs to the lender until the loan is repaid in full. The larger the borrower's own contribution, the lower the regular payments. Full payment to the lender is possible at any time.
  • Conditional sales contract has similar terms to the previous option, but the contract itself stipulates that the customer receives full ownership upon repayment of the car.
  • Personal contract purchase agreement (PCP) is also very similar to lease-purchase financing, but differs slightly. At the end of the term, the borrower is faced with the decision to return the car and use the equity as a down payment on a new car or pay the minimum guaranteed value and acquire title. In fact, the borrower has more than 2 options here:
    • returning the vehicle (the mileage will be verified and if the borrower exceeds it, additional fees will be charged);
    • returning the current vehicle and signing a new PCP contract for a new vehicle;
    • payment of the balance and the car becomes your property.

    Important! Normally, termination of the contract is possible when half of the amount has been repaid.

    • Personal loan, instalment sales contract is a good way to avoid your car being used as a collateral. The borrower only receives a loan with a specific term and repayment schedule. The loan can be used for any purpose, including buying a car, and this option allows the borrower to use the car at his own discretion: sell it, give it away, etc. Such loans have some disadvantages: they are usually available only to customers with excellent or high credit scores, and the loan amount is often less than $30,000, which means it may not be enough to buy a new, expensive car.
    • Guarantor loans are loans where a third person steps in as a guarantor, using their personal guarantee to make up for an inadequate credit score and reduce the credit risk for the lender, because if the borrower gets into trouble, the guarantor makes the payments in their place.
    • Financing without own contribution and that the creditworthiness of the borrower is sufficient not to make a down payment or to pay a minimum payment as a reservation fee) and besides it is possible to get competitive interest rates;

    Attention! Financing by exchange (trade-ins) allows you to use your old car as a down payment to get a car of your dreams.

    • Business credit cards may be used as well but this instrument has pretty high cost of borrowing.

    All types of loans have some disadvantages, there is no perfect product for all cases. For example, in retail financing, there are some contractual provisions about the mileage and condition of the car. If you drove more and/or damaged the car and returned it in worse condition than agreed, the lender would charge additional fees for this breach of contract. If you have trouble making timely payments, it will negatively impact your credit score.

    Personal loans have the advantage that the payment remains the same throughout the life of the loan agreement, leaving it up to the borrower to decide where to buy the car. However, the lender does not check to see if the dealer is reputable, and all the risks lie with the borrower as the buyer.

    Reference! Financial institutions disclaimer of the lender have to include indicated estimated interest rate have to be.

    Making summarize, it is possible to buy a car using convenient financing product with friendly repayment schedules, affordable interest rates., possibility to repay the loan early,

    How to apply for a new car loan?

    Car loan can be applied for in several ways:

    • online banking;

    • via the app (if it supports such a function);

    • in the branch of the lender;

    • at local dealerships across Canada.

    From the lender's point of view, the financing of the car purchase can be applied for at:

    • the bank;

    • credit union;

    • other lenders, including online lenders.

    Banks and credit unions are stricter when it comes to the borrower's credit score and creditworthiness.

    Alternative lenders make it easy for the applicant, but charge higher interest rates and additional fees.

    Attention! Make sure you have read the lender's disclaimer and understand the full cost of the loan. You should keep the copy of this document with the copy of your loan agreement.

    If the car is not used as a collateral the lender may have no requirement to check whether you bought new or used car.

    Canadian credit history is required by top lenders. It is possible to repay car loan early or making monthly payments according to provided repayment schedule on your payment date. Amount of monthly payment depends on type of interest rate: fixed or floating.

    Personal credit card is not mentioned within the list of loan instruments used for purchase of car because it have high interest rate and usually much lower limit comparing to the cost of the car.


    Access to car loan credit tools depends on the borrower' ability to meet eligibility criteria of the lender. Strictness of loan agreement depends on car loan amount, the lender, collateral availability, express or implied warranties. There are basic requirements for car loans in Canada:

    • the borrower has to be over 18 years old (or other age of maturity provided by provincial and federal legislation);

    • the borrower must be able to enter into agreement;

    • credit limit must be approved for the borrower by lending institution;

    • often the borrower has to sign pre authorized payments to ensure debiting or regular payments from the account;

    • flexible financing options might have additional requirements about borrower' credit score being not less then certain amount;

    • if it is trade-in the borrower have to proof ownership because otherwise home may not be used as a collateral;

    • to have stable income;

    • to be a citizen of Canada or have permanent resident status;

    • to have excellent or good credit score;

    • to get additional insurance of vehicle used as a collateral, etc.

    Ways to get a new car loan

    Buying a car is a responsible decision and the borrower should make wise decision about the lender with convenient terms of lending and affordable interest rate. It is possible to get vehicle loan in a different ways, namely at:

    • the bank branch;

    • credit union;

    • royal mutual funds;

    • local dealership;

    • other lenders, including online lenders.

      If you want to buy a car, usually credit history is required

    How to repay a new car loan

    Repayment of car loan can be according to the schedule or repayment of loan early. Interest rates vary depending on your credit score. If you want yo pay off your loan sooner then get ready to show financial discipline.

    For the sake of borrowers convenience the loan can be repaid by means of:

    • direct debit;

    • cash at the bank branch;

    • money transfer;

    • web banking;

    • banking mobile app where checking of payments is usually in the section of menu "car loans" or similar to it.

    • cheque.

    Repayment includes registration or administration fees;

    Installment sales contract is repaid in equal installments (usually) but if it is leasing or other similar to rent then regular installments would charged while principal amount is expected to be paid at the end of the term. Only then after you buy a car you you become actual owner and can sell it or use upon own discretion.

    Pros and cons


    There is number of positive aspects of lending for car purchase:

    • protection of the transaction on the lender' side (usually the lender is verifying dealers);

    • quick examination of loan application with prompt approval because the car is new and there is no need to check the title of previous owner;

    • high percentage of approval if the borrower has good credit score;

    • car loans for are affordable, especially if one is good at planning expenses, besides normally new cards would not break down and is reliable;

    • principal are paid during the year or at the end of the term in some products, borrowers have good selection of lenders which specialize in new cars;

    • if the borrower has excellent or high credit score interest rate would be lower and it is possible to apply for higher amount of loan and get even newer model with all desired features.


    There are no universal loans but the borrower should pay attention to the details:

    • if floating interest is applied it means higher expenses and higher future value of the new car;

    • if the borrower wants to sell the car and buy newer one before the end of the loan term it won't be possible unless the loan is repaid first;

    • some lenders have restrictions of using the car (they are not happy when new cars are used for taxi, have restrictions on mileage and condition of car);

    • if there is a balloon payment at the end of the term the borrower has to be disciplined to lay aside needed amount otherwise dream car would never become own;

    • additional insurance is often required and generates expenses for the borrower;

    • bad credit may hinder from getting approved on better conditions;

    • Canadian credit history required which is a disadvantage for those who moved to Canada and have no local credit history yet to get new car at the dealer';

    • some lenders require periodic inspection of the vehicle to ensure that it is in good condition and that the borrower is complying with the terms of the agreement without violations;

    • strict requirements which the borrower have to meet (stable job, own contribution requirements, etc.)

    Legal regulation

    There are a number of regulations for car loans that also apply to other products of financial institutions. At the level of some provinces, stricter requirements are provided.

    Legal documents require that loan terms be clearly stated and understandable to borrowers;

    All fees must be disclosed (e.g., origination fee, appraisal fee, administrative fee, modification fee, closing fee, etc.).

    The federal level of Canadian legislation contains general rules for lending that also apply to auto loans. Notable among these are the Investment Act, the Consumer Protection Act and the Criminal Code, which limit the maximum interest rate and thus the lender's profit margin.

    If the borrower has complaints about the loan, such a letter should first be submitted to the lender, and if this does not help to resolve the matter, to the regulatory authority of the respective province.

    Almost all provinces require lenders to clearly disclose all fees that make up the actual cost of the loan. If there is a problem with the dealership, customers are encouraged to file complaints with the auto sales regulators in their provinces.

    In British Columbia, for example, such matters are handled at the Vehicle Sales Authority of British Columbia.

    Alberta Motor Vehicle is a regulatory body in Alberta.

    The Ontario Motor Vehicle Industry Council is a helpful institution for Ontario customers.


    How much is the average new car loan?

    Average monthly payment for car loan in Canada is below $500 but it depends on loan amount, down payment amount, maturity of car loan, etc.

    If one would consider the statistics that on average cost of new car is $30 000 with taking into consideration that down payment was made in the amount of 20% from car value then average loan amount is approximately $24 000.

    How much of a car loan can I get with a 700 credit score?

    Credit score of 700 allows to borrow up to $100 000. At this, keep in mind that approved loan amount depends on multiple factors except credit score, and even if you can be approved for higher amount you should consider what loan amount you can actually service and repay. In some cases it is wise decision not to use maximal amount of loan and avoid overloaded household budget.

    Can I get car loan with $30,000 salary?

    Yes, such salary would allow to bet positive decision but approved amount and other loan terms depend on expenses, burden of other loans, constant expenses and of course credit score of the borrower.