Compare Car Finance in Canada

Live offers

18 live offers compared from 14 providers, from 7.99% APR. Updated daily.

What is car finance in Canada?

Car finance lets you buy a vehicle by borrowing the cost and repaying in monthly instalments, rather than paying cash upfront. Canadians typically choose between a car loan — you own the vehicle and repay principal plus interest — and leasing, where you pay for the use of the car over a term and return or buy it at the end. Financing can come from the dealer, a bank or a specialist lender.

The headline number to watch is the interest rate (APR), which depends heavily on your credit score, the loan term and whether the car is new or used.

How the Canadian market works

Dealers offer financing at the point of sale, sometimes with manufacturer-subsidised low or 0% promotional rates on new cars, but these can come with trade-offs against cash rebates. Banks like RBC, TD, Scotiabank, BMO and CIBC and credit unions offer car loans directly, and specialists such as Canada Drives and Fairstone serve buyers with weaker credit at higher rates. Terms commonly stretch from three to eight years; longer terms lower the monthly payment but raise total interest and risk owing more than the car is worth.

Getting pre-approved by a bank before visiting a dealer gives you a rate to negotiate against.

Benefits

Spread the cost — drive now and pay over several years instead of a lump sum.

Ownership — a loan builds equity in a car you keep, unlike leasing.

Promotional rates — manufacturer financing can offer very low or 0% APR on select new models.

Credit building — regular on-time payments strengthen your credit history.

How to choose

Get pre-approved by a bank or credit union first so you know your rate, then compare it against the dealer's offer — and weigh a low promotional APR against any cash rebate you would forgo. Choose the shortest term you can afford to limit total interest, and check for prepayment flexibility. If your credit is strong, avoid high-rate specialist lenders; if it is weak, compare their rates carefully before committing.

Leading providers in Canada

The Big Five banks — RBC, TD, Scotiabank, BMO and CIBC — and Desjardins offer competitive car loans, as do credit unions. Manufacturer captive-finance arms provide promotional dealer rates. Specialists like Canada Drives and Fairstone Financial focus on buyers with subprime or limited credit, at higher rates. Comparing a bank pre-approval against dealer financing is the standard approach.

What it costs

The main cost is the APR, with market rates roughly in the 7.99% to 14.99% range for many borrowers, lower for excellent credit or subsidised new-car promotions and higher for weaker credit or older used vehicles. Longer terms cut the monthly payment but increase total interest paid. Factor in any dealer fees and the cost of optional add-ons like extended warranties.

Protections and regulation

Car lending falls under federal cost-of-borrowing disclosure rules through the FCAC for banks, plus provincial consumer-protection and payday/high-cost-credit laws. Quebec's Consumer Protection Act imposes strict disclosure and contract requirements on auto financing and leasing. Lenders must disclose the APR and total cost of credit, so read the contract for the all-in figure rather than just the monthly payment.

Common questions

Loan or lease? — A loan builds ownership and suits long-term keepers; a lease has lower payments but you return the car and own nothing.

Should I take 0% dealer financing? — Sometimes, but compare it against any cash rebate you would give up to get it.

Does a longer term save money? — It lowers the monthly payment but increases total interest and the risk of negative equity.

Car Finance in Canada — FAQ