Car Loan Calculator Canada
Estimate your monthly car payment, total interest cost, and compare loan terms. Includes trade-in value, down payment, and a term comparison to find the cheapest option.
Last updated: March 21, 2026 • Reviewed by Calculator Canada Editorial Team
| Term | Monthly | Total Interest | Total Cost |
|---|
How the Canadian Car Loan Calculator Works
This calculator helps you estimate the true cost of financing a vehicle in Canada. Enter the vehicle price, your down payment, any trade-in value, the interest rate (APR), loan term, and applicable sales tax. The calculator instantly shows your monthly payment, total interest paid, and the all-in cost of the vehicle over the life of the loan.
The term comparison table is especially valuable — it shows how choosing a shorter loan term significantly reduces your total interest cost, even though monthly payments are higher. For example, financing a $35,000 vehicle at 6.99% over 48 months instead of 72 months saves over $3,800 in interest.
Car Loan Interest Rates in Canada (2026)
Auto loan rates in Canada vary based on your credit score, the age of the vehicle, the loan term, and the lender. Here are typical rate ranges for 2026:
| Credit Score | New Car Rate | Used Car Rate | Approval Odds |
|---|---|---|---|
| Excellent (760+) | 3.99% – 5.49% | 5.49% – 7.49% | Very High |
| Good (680-759) | 4.99% – 6.99% | 6.99% – 9.99% | High |
| Fair (600-679) | 6.99% – 9.99% | 8.99% – 14.99% | Moderate |
| Poor (below 600) | 9.99% – 14.99% | 12.99% – 24.99% | Low — may need co-signer |
Dealership financing often comes with higher rates than banks or credit unions. Many manufacturers offer promotional rates (sometimes 0% or 0.99%) on specific models, but these promotions typically require giving up cash rebates. Always compare the total cost of promotional financing versus a cash rebate with your own financing.
New vs Used Car: Cost Comparison
A common debate for Canadian car buyers is whether to buy new or used. Here is a cost comparison for a typical mid-size sedan:
| Factor | New Car ($40,000) | Used Car 3yr ($25,000) | Savings |
|---|---|---|---|
| Purchase Price | $40,000 | $25,000 | $15,000 |
| HST (Ontario 13%) | $5,200 | $3,250 | $1,950 |
| Interest (60mo) | $5,312 (4.99%) | $4,576 (6.99%) | $736 |
| Depreciation (5 yr) | ~$20,000 (50%) | ~$10,000 (40%) | $10,000 |
| Total 5yr Cost | $50,512 | $32,826 | $17,686 |
Used cars save significantly on depreciation — a new car loses approximately 20-30% of its value in the first year alone. A 2-3 year old vehicle with low kilometres often offers the best value, combining modern features with the steepest depreciation already behind it.
Sales Tax on Vehicle Purchases in Canada
When you buy a car in Canada, you pay sales tax based on your province. For new vehicles, tax is charged on the purchase price. For private used car sales, most provinces charge tax on the purchase price or the vehicle's book value, whichever is higher.
| Province | Tax Type | Rate | Tax on $40,000 Car |
|---|---|---|---|
| Ontario | HST | 13% | $5,200 |
| British Columbia | GST + PST | 12% | $4,800 |
| Alberta | GST only | 5% | $2,000 |
| Quebec | GST + QST | 14.975% | $5,990 |
| Saskatchewan | GST + PST | 11% | $4,400 |
| Manitoba | GST + PST | 12% | $4,800 |
| New Brunswick | HST | 15% | $6,000 |
| Nova Scotia | HST | 15% | $6,000 |
Alberta buyers save the most — with only 5% GST and no provincial sales tax, the tax on a $40,000 vehicle is just $2,000 compared to $6,000 in New Brunswick. This is why some Canadians travel to Alberta to purchase vehicles, though you must pay your home province's tax when registering the vehicle.
How to Get the Best Car Loan in Canada
- Get pre-approved before visiting the dealer — check rates at your bank, credit union, or online lenders first. This gives you a baseline rate to negotiate against.
- Keep the loan term to 60 months or less — longer terms (72-96 months) have higher rates and you risk being "underwater" (owing more than the car is worth).
- Put at least 10-20% down — a larger down payment reduces your loan amount, lowers monthly payments, and may qualify you for a better rate.
- Check your credit report before applying — a score above 680 gets good rates; above 760 gets the best. Fix any errors before applying.
- Compare total cost, not just monthly payment — dealers love to focus on monthly payment, but a lower payment over a longer term often costs thousands more in total interest.
- Negotiate the price first, financing second — agree on the vehicle price before discussing financing. Dealers sometimes inflate the price when offering low rates.
- Consider your trade-in's true value — check Canadian Black Book or AutoTrader for fair market value. Selling privately typically gets 10-20% more than dealer trade-in.
How Much Car Can You Afford in Canada?
Financial experts recommend that your total transportation costs — including car payment, insurance, gas, and maintenance — should not exceed 10-15% of your gross monthly income. Here is a quick affordability guide:
| Annual Income | Monthly Budget (15%) | Max Car Payment | Affordable Vehicle Price |
|---|---|---|---|
| $50,000 | $625 | ~$400 | ~$20,000 – $25,000 |
| $65,000 | $813 | ~$550 | ~$28,000 – $33,000 |
| $75,000 | $938 | ~$650 | ~$33,000 – $38,000 |
| $100,000 | $1,250 | ~$900 | ~$45,000 – $52,000 |
| $125,000 | $1,563 | ~$1,100 | ~$55,000 – $65,000 |
The "Max Car Payment" column accounts for approximately $200-$300/month for insurance, gas, and maintenance. Adjust based on your actual driving habits and insurance costs.