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Auto financing for new and used vehicles
Finance terms depend on the vehicle, term length, and lender criteria.
View optionCar Loans in Canada
A car loan is financing secured by the vehicle you buy. In Canada, you can arrange financing through a dealership, a bank, a credit union or an online lender — and the rate can differ significantly between them.
What car loans are
Car loans are usually secured by the vehicle, which means the lender can repossess it if you default. Because the loan is secured, rates are often lower than unsecured personal loans. The loan-to-value ratio, term length, vehicle age and your credit profile all affect the rate you are offered.
Eligibility
- You meet the age of majority in your province
- You have income sufficient to cover the payments
- You provide ID, proof of income and details of the vehicle
- A down payment may be required, especially for used vehicles
How it works
- Get pre-approved before you shop so you know your budget and rate
- Compare dealer financing with bank, credit union and online lender offers
- Negotiate the vehicle price separately from the financing terms
- Review the term length — longer terms lower payments but raise total interest
- Confirm whether the loan has an open or closed term and any prepayment rules
What to watch for
- A longer term lowers the payment but increases total interest and the risk of negative equity
- Dealer financing can be convenient but is not always the cheapest option
- Gap insurance and extended warranties are optional and add to the cost
- Check the total cost of borrowing, not only the monthly payment
Frequently asked questions
Should I get pre-approved for a car loan in Canada?
Yes. Pre-approval tells you the rate and amount you qualify for before you negotiate, which gives you more leverage and prevents dealership pressure.
Is dealer financing or a bank car loan cheaper?
It depends on the promotion, your credit profile and the term. Compare both, and compare the total cost of borrowing rather than the monthly payment alone.
Can I get a car loan with bad credit in Canada?
Some lenders specialise in bad credit auto financing, but expect a higher rate and possibly a larger down payment. Confirm the total cost before signing.
What happens if I default on a car loan?
Because the loan is secured by the vehicle, the lender can repossess it. You may still owe the difference between the sale proceeds and the loan balance.
Related tools and guides
Find car loans by province
Important legal information
Promissory.ca is not a lender, bank, mortgage broker or credit counsellor. We do not make lending decisions and we do not charge you a fee to use this service.
Submitting an application does not guarantee approval. All applications, rates and terms are set and approved solely by the individual lender or licensed professional.
Rates, fees and loan amounts vary by lender, province, loan type and your credit profile. Advertised rates are the lender's lowest offered rate and may not be available to you.
Lenders may perform a credit check with one or more credit bureaus, including Equifax and TransUnion. A hard credit inquiry may affect your credit score.
There is no obligation to accept any offer presented to you. Review every agreement carefully before signing.
Borrow only what you can reasonably afford to repay. Late or missed payments may result in additional fees, collection activity and negative credit reporting.
We handle personal information in accordance with the Personal Information Protection and Electronic Documents Act (PIPEDA). See our Privacy Policy for how we collect, use and protect your information.
If you are struggling with debt, consider contacting a non-profit credit counselling service or a Licensed Insolvency Trustee before borrowing more.
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Options from our Canadian lending partners. Promissory.ca is not a lender and does not make lending decisions.
Affiliate disclosure: Promissory.ca is a free comparison and referral service. We may receive compensation from lending partners when you click a partner link or submit an application. This compensation does not affect the information or comparisons we publish.
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Compare loan optionsAffiliate disclosure: Promissory.ca is a free comparison and referral service. We may receive compensation from lending partners when you click a partner link or submit an application. This compensation does not affect the information or comparisons we publish.