๐ Car Loan Calculator
Calculate your exact monthly payment, total interest, and full payment schedule for any Canadian auto loan.
How Canadian Auto Loans Work
When you finance a vehicle in Canada, you're borrowing money to pay for the car and repaying it โ with interest โ over an agreed term. The lender could be the dealership (dealer financing, often arranged through a captive finance arm like Toyota Financial Services or GM Financial), your bank, or a credit union.
Your interest rate depends primarily on your credit score, the loan term, and the age of the vehicle. New cars typically attract lower rates than used. Longer terms reduce your monthly payment but can dramatically increase total interest paid โ a 84-month loan at 8% on $35,000 costs over $12,000 in interest alone compared to roughly $7,500 on a 60-month loan.
One thing many buyers overlook: provincial sales tax (HST or GST/PST) is applied to the purchase price of the vehicle and typically rolled into the financed amount. This calculator handles that automatically based on your province.
๐ Car Loan Calculator
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Trade-in value reduces the taxable purchase price in most provinces.
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Your Loan Results
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Total Interest Paid
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Total Cost of Loan
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Amount Financed
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Tax Applied
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Amortisation Schedule
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How to Use This Calculator
- Enter the vehicle price โ use the out-the-door price before taxes, or the negotiated price from the dealer quote.
- Select your province โ the calculator automatically applies the correct HST, GST, or combined GST/PST rate for your province. Note: Quรฉbec applies GST + QST (14.975% combined). Trade-in value is deducted from the taxable amount before tax is calculated.
- Enter your down payment and trade-in โ a higher down payment reduces the amount you finance, slashing both your monthly payment and total interest.
- Set your interest rate and term โ your bank or credit union will give you a pre-approved rate. Dealer financing rates vary widely. The default 7.99% is a typical rate for a buyer with good credit in 2026.
- Click Calculate โ see your exact monthly payment, total interest, and a full year-by-year amortisation schedule showing exactly how each payment is split between principal and interest.
Canadian Example: 2024 Toyota RAV4 in Ontario
Scenario: You purchase a 2024 Toyota RAV4 priced at $42,500 in Ontario. You have a $5,000 trade-in vehicle and $8,000 cash down.
Tax calculation: Taxable amount = $42,500 โ $5,000 trade-in = $37,500 ร 13% HST = $4,875 tax
Amount financed: $42,500 + $4,875 tax โ $8,000 down โ $5,000 trade-in = $34,375
Loan terms: $34,375 at 7.99% over 60 months
Monthly payment: approximately $697/month
Total interest paid: approximately $7,445
Total loan cost: approximately $41,820 (principal + interest)
Extending to 84 months would lower the payment to ~$534/month but balloon total interest to ~$10,500 โ costing $3,000 more over the life of the loan.
Tax calculation: Taxable amount = $42,500 โ $5,000 trade-in = $37,500 ร 13% HST = $4,875 tax
Amount financed: $42,500 + $4,875 tax โ $8,000 down โ $5,000 trade-in = $34,375
Loan terms: $34,375 at 7.99% over 60 months
Monthly payment: approximately $697/month
Total interest paid: approximately $7,445
Total loan cost: approximately $41,820 (principal + interest)
Extending to 84 months would lower the payment to ~$534/month but balloon total interest to ~$10,500 โ costing $3,000 more over the life of the loan.
What Your Results Mean
Monthly Payment vs. Total Cost
Many Canadians focus entirely on the monthly payment โ this is exactly what dealers count on. A dealer who stretches your loan from 60 to 84 months drops your payment by roughly $160/month on a $35,000 loan, but adds over $3,000 in total interest. You also spend two extra years "underwater" โ owing more than the car is worth.
Being "Underwater" on a Loan
In the first 24โ36 months of a long-term loan, you typically owe more on the car than it is worth due to rapid early depreciation. If the car is written off or stolen, your insurance payout may not cover the loan balance. Gap insurance protects against this, but adds to your costs.
Dealer Financing vs. Your Bank
Dealers earn commission on financing. Their offered rate may be marked up from what you actually qualified for. Getting pre-approved at your bank or credit union before visiting a dealer gives you leverage and a known baseline rate to compare against.
Frequently Asked Questions
What is a good car loan interest rate in Canada in 2026?
For borrowers with excellent credit (750+), rates in 2026 typically range from 5.99% to 7.99% for new vehicles through major banks and credit unions. Buyers with good credit (700โ749) can expect 7.99% to 10.99%. Subprime borrowers (below 650) may face rates of 12% to 29.99% through specialist lenders. New vehicles generally attract lower rates than used. Manufacturer captive finance arms (e.g., Toyota Financial, Ford Credit) sometimes offer promotional rates of 0%โ3.99% on select models, but these deals often require forgoing cash rebates.
Should I finance through the dealer or my bank?
Always get pre-approved by your bank or credit union before visiting a dealership. This gives you a concrete rate to compare against dealer financing and prevents the dealer from knowing you have no backup plan. Dealer financing can sometimes beat bank rates (especially on promotional offers), but dealers earn a "finance reserve" โ a markup โ on the rate they offer you. If the dealer beats your bank rate, great. If not, you have your own financing ready to go. Credit unions in Canada frequently offer competitive auto loan rates and are worth checking.
Does a longer loan term save money?
No โ a longer term saves you money each month but costs you more overall. On a $35,000 loan at 7.99%: a 48-month term costs roughly $6,200 in total interest; a 60-month term costs $7,700; and an 84-month term costs over $10,500. The total interest difference between a 4-year and 7-year loan on a typical Canadian vehicle purchase is often $3,000โ$5,000. Additionally, longer loan terms increase the period where you owe more than the vehicle is worth (negative equity). Choose the shortest term you can comfortably afford.
How does my trade-in affect my loan?
Your trade-in vehicle reduces both the taxable amount (in most provinces) and the amount you need to finance. For example, in Ontario, a $5,000 trade-in saves you $650 in HST (13% ร $5,000) in addition to reducing your loan principal by $5,000. This makes trade-ins particularly valuable in high-tax provinces. Be aware that dealers may undervalue your trade-in to preserve their margin. Check your vehicle's value on platforms like AutoTrader, CarGurus, or a dealership appraisal from a competing dealer before accepting an offer.
Can I pay off a car loan early in Canada?
Yes, and in most cases you should if you have the funds. Most Canadian auto loans do not have prepayment penalties (unlike mortgages). Paying extra principal each month โ or making a lump-sum payment โ directly reduces your total interest cost and shortens your loan. Check your loan agreement first, but the vast majority of standard bank and credit union auto loans in Canada permit early repayment without penalty. Even adding $50โ$100 extra per month to your payment can save hundreds of dollars in interest.
How does HST/GST apply to a used car purchase?
For used vehicles purchased from a registered dealer, HST or GST/PST applies to the purchase price (minus trade-in value in most provinces), just as with new cars. For private sales (buying from an individual), Ontario, British Columbia, and Saskatchewan charge provincial sales tax based on the greater of the sale price or the Canadian Black Book value โ this prevents buyers from declaring artificially low prices to reduce tax. Alberta charges GST on dealer sales but no provincial sales tax on private sales. Always confirm the tax treatment in your province before completing a private-sale transaction.
5 Tips to Save Money on Your Car Loan
Tip 1: Put at least 20% down. A 20% down payment reduces your loan amount, eliminates or minimises the period where you're "underwater," and can help you qualify for a better rate. On a $40,000 vehicle, that's $8,000 down โ meaningful savings over the life of the loan.
Tip 2: Choose the shortest term you can comfortably afford. Run the numbers on a 48-month vs. 60-month term. The monthly difference is often smaller than you expect, but the interest savings are significant. Avoid 72- and 84-month loans unless absolutely necessary.
Tip 3: Get pre-approved before visiting the dealer. Walk in with a pre-approval letter from your bank or credit union. This transforms you into a cash buyer in the dealer's eyes, giving you negotiating power on price โ and a benchmark to evaluate any dealer financing offer.
Tip 4: Always negotiate total price โ not monthly payment. Dealers love to frame everything as "what can you afford per month?" This allows them to stretch terms or inflate add-ons while keeping your payment in range. Negotiate the vehicle price first, trade-in value separately, and financing separately. Never reveal your monthly budget target.
Tip 5: Check your credit score before applying. In Canada, you can get your free credit report from Equifax and TransUnion. Even a 20-point improvement in your score could move you into a better rate tier, saving thousands over the loan. If your score is borderline, consider waiting 3โ6 months to improve it before buying.
Related Calculators
Disclaimer: This calculator provides estimates for informational purposes only. Results assume a fixed interest rate and do not include additional fees such as dealership administration fees, licensing, registration, or optional add-ons. Tax calculations are based on standard provincial rates and may not reflect all exemptions or special circumstances. Always confirm your final figures with your lender and dealership before signing any agreement.