Car Loan Rates in Canada: How to Get a Better Deal

Your car loan rate depends on your credit, the term, whether the car is new or used, and who's lending.

Dealer vs bank

• Dealer financing sometimes includes manufacturer promotional rates on new cars — occasionally very low. Promos can come with a higher sticker price than a cash deal, so ask for both prices.
• Bank or credit union pre-approval gives you a rate to compare before you walk in.

The long-term trap

84- and 96-month terms lower the payment but raise total interest, and cars lose value fast. You can easily owe more than the car is worth (negative equity) for years. That gap gets rolled into your next loan if you trade in early.

Compare a 60- vs 84-month term in the auto loan calculator.

Lease or buy?

See car loan vs lease for the full comparison.

How to get a better rate

1. Check and improve your credit score first.
2. Get pre-approved by 2–3 lenders within a short window — multiple auto inquiries close together are generally treated as one shopping event.
3. Put more down and choose the shortest term you can afford.
4. Decline add-ons you don't need (extended warranty, paint protection) — they get financed at your loan rate.

See lenders that offer auto loans on our best auto loans page.