How To Use This Car Loan Calculator
The calculator updates as you type, so you can try different scenarios in seconds.
- Choose your credit score. Each level fills in an estimated interest rate. If a lender has already quoted you a rate, type it in instead.
- Pick a term and how often you'll pay. Choose a loan term from 12 to 96 months, and monthly, bi-weekly or weekly payments.
- Enter the vehicle and your province. Add the vehicle price, your down payment and any trade-in value. Your province sets the sales tax.
- Review your estimate. You'll see your payment, the estimated sales tax, the amount financed, the total interest and the total cost. The tables under the calculator compare terms and show how your balance goes down year by year.
If the payment fits your budget, use the "See if you qualify" button to check your options. It won't affect your credit score.
How Your Car Payment Is Calculated
A car loan is repaid in equal payments. Each payment covers that period's interest, and the rest pays down the balance. The calculator follows these steps:
- Sales tax is worked out on the vehicle price minus your trade-in.
- Amount financed = vehicle price + sales tax - down payment - trade-in.
- Payment = P × r × (1 + r)n ÷ ((1 + r)n - 1), where P is the amount financed, r is your annual rate divided by the number of payments per year (12, 26 or 52), and n is the total number of payments.
- Total interest = payment × number of payments - amount financed.
Example: A $35,000 vehicle in Ontario with $5,000 down, at 10% for 72 months, costs about $640.07 a month, with $11,534.87 in interest and $4,550.00 in estimated HST.
Sales Tax On Cars By Province
Sales tax can add thousands of dollars to the price of a car, and it's usually rolled into your loan. Every province charges the 5% GST or an HST that includes it, and some add a provincial sales tax. When you trade in a vehicle at a dealer, the tax is charged on the price minus your trade-in, so a trade-in lowers both what you borrow and the tax you pay.
| Province or territory | Taxes | Total rate | Tax on a $35,000 vehicle |
|---|---|---|---|
| Alberta | GST 5% | 5% | $1,750.00 |
| British Columbia | GST 5% + PST 7–20% (by price) | 12–25% | $4,200.00 |
| Manitoba | GST 5% + RST 7% | 12% | $4,200.00 |
| New Brunswick | HST 15% | 15% | $5,250.00 |
| Newfoundland and Labrador | HST 15% | 15% | $5,250.00 |
| Northwest Territories | GST 5% | 5% | $1,750.00 |
| Nova Scotia | HST 14% | 14% | $4,900.00 |
| Nunavut | GST 5% | 5% | $1,750.00 |
| Ontario | HST 13% | 13% | $4,550.00 |
| Prince Edward Island | HST 15% | 15% | $5,250.00 |
| Quebec | GST 5% + QST 9.98% | 14.98% | $5,241.25 |
| Saskatchewan | GST 5% + PST 6% | 11% | $3,850.00 |
| Yukon | GST 5% | 5% | $1,750.00 |
In B.C., the PST on a passenger vehicle depends on its price: 7% under $55,000, rising in steps to 20% at $150,000 and over (see tax on cars in B.C.). Private sales, used-vehicle rules and the federal luxury tax can change what you pay, so confirm the final amount with the seller. Our guide to car sales tax on new and used vehicles covers those cases.
Car Loan Rates By Credit Score
Your credit score is the biggest factor in the rate you're offered. The calculator's presets are rough estimates for planning, not quotes:
| Credit level | Typical score range | Calculator estimate |
|---|---|---|
| Excellent | 760 to 900 | 5% |
| Great | 725 to 759 | 10% |
| Good | 660 to 724 | 15% |
| Average | 560 to 659 | 30% |
| Poor | 300 to 559 | 35% (the legal maximum) |
Other things matter too: your income and existing debts, the size of your down payment, the loan term, and whether the car is new or used. Since January 1, 2025, the criminal interest rate in Canada is 35% APR, so no lender can legally charge more. For current market rates, see the average car loan interest rate in Canada and what counts as a good rate.
How The Loan Term Changes What You Pay
A longer term lowers your payment but increases the total interest. The "Compare loan terms" table under the calculator shows this for your own numbers. For the example above, going from 60 to 84 months lowers the payment from $734.09 to $573.57 a month, but the total interest rises from $9,495.12 to $13,629.96.
Long terms also raise the risk of negative equity, where you owe more than the car is worth. That makes it harder to sell or trade in early. Many people aim for 60 months or less.
How Much Car Can You Afford?
A common rule of thumb is to keep your car payment under about 10% to 15% of your take-home pay, and all vehicle costs, including insurance, fuel and maintenance, under about 20%. Lenders also look at your debt ratios, which compare all your monthly debt payments to your gross income.
- Start from the payment, not the price. Decide what you can comfortably pay, then change the vehicle price in the calculator until the payment fits.
- Budget for the costs of owning a car. Insurance, fuel, maintenance, registration and winter tires can add hundreds of dollars a month.
- Leave room for surprises. A payment that only works if nothing goes wrong is too high.
See How Much You Qualify For
Ways To Lower Your Car Payment
- Make a bigger down payment. Every dollar you put down is a dollar you don't pay interest on. Many lenders like to see 10% to 20% down.
- Improve your credit first. Moving up even one credit level can save thousands over the loan.
- Trade in your current car. A trade-in lowers both the amount you finance and the sales tax you pay.
- Choose a less expensive car. A slightly used car can cost much less than a new one and lose value more slowly.
- Add a co-signer. A co-signer with strong credit can help you get approved at a lower rate. They are equally responsible for the loan.
- Watch the add-ons. Extended warranties, protection packages and fees rolled into the loan raise your payment and the interest on it.
- Refinance later. If your credit improves or rates drop, refinancing your car loan can lower the payment. More ideas in how to lower your car payment.
Where To Get A Car Loan In Canada
Banks And Credit Unions
Prime lenders such as banks and credit unions usually offer the lowest rates and the most flexible terms, but they are harder to qualify with. A strong credit score, steady income and a down payment help. Offering a co-signer can strengthen your application.
Alternative Lenders
If you have bad credit or little money for a down payment, an alternative lender may be easier to qualify with. Approval depends more on your income and overall finances, and some lenders work with borrowers recently out of a consumer proposal or bankruptcy. Expect higher rates, and include them in your budget.
Dealerships
Many new and used car dealers offer financing, sometimes with promotional rates on new models. Dealer financing is convenient, but compare it with offers from other lenders, and read the contract for add-ons and fees before you sign.
Costs A Car Payment Doesn't Cover
Get a written quote with every cost before you sign, and budget for these on top of your payment:
- Insurance
- Fuel, maintenance and repairs
- Licensing and registration fees
- Loan origination and administration fees
- A prepayment penalty, if your lender charges one
Missing payments hurts your credit and can lead to your vehicle being repossessed, so make sure the payment still works if money gets tight. An emergency fund helps.
Car Loan Calculator FAQs
What is a good interest rate for a car loan in Canada?
How long should a car loan be?
Can I get a car loan with bad credit?
Is sales tax included in my car loan?
Does a trade-in reduce the sales tax I pay?
Is a bi-weekly car payment better than monthly?
How does interest work on a car loan?
Do car loans need a down payment?
Can I pay off my car loan early?
What credit score do I need for a car loan?
Are the results of this calculator exact?
Glossary
| TERM | DEFINITION |
|---|---|
| Add-Ons | Any features or services that are applied on top of the base price of a car are considered add-ons. These can include things such as tinted windows, heated seats, leather seats, alarms, and wheel locks, to name a few. |
| Base Price | The base price of a car is the cost of the vehicle without any upgrades or added features that can be added after the car is ordered from a dealership. Only standard equipment and the manufacturer's warranty are included in the base price, but any other fees will be added afterward. |
| Certified Pre-Owned (CPO) | CPO cars refer to used cars that have been certified, either by the dealership selling the car or the manufacturer of the vehicle. This gives consumers confidence knowing they are buying a used vehicle that is in good condition. When a used car is obtained by a dealership, it is inspected by a certified mechanic. The car is then repaired if it meets the required standards and is then ready to be sold as a CPO vehicle. |
| Clear Title | A clear title means that the owner of the car has a free and clear title and no longer carries a balance owing on a car loan. There are no liens of the title or levies from creditors. |
| Dealership | Auto dealerships are businesses that are authorized to sell new or used automobiles to consumers and serve as a direct dealer for automakers |
| Dealership Financing | Consumers can obtain dealer financing to help fund the purchase of a vehicle. A contract is signed with a dealership that requires a consumer to pay for a specific amount plus interest and funding fees over a certain period of time. Dealers will send the details of the consumer's financials to various lenders to find one that will approve the loan. |
| Depreciation | Depreciation refers to the decline in the value of a vehicle. Immediately after purchase, a vehicle will become less valuable as soon as it is used. Put another way, depreciation is the rate at which an automobile loses its value over time |
| TERM | DEFINITION |
|---|---|
| Extended Warranty | Vehicles come with a manufacturer's warranty when purchased, but buyers can choose to purchase an extended warranty. This serves as a form of insurance policy on the vehicle to cover the cost of potential repairs in the future. An extended warranty is usually good for a certain period of time and/or mileage. |
| TERM | DEFINITION |
|---|---|
| Lease | A contract that allows an individual the right to use or occupy a property for a specified period of time in exchange for a monthly payment. Leases are common for a property like apartments and vehicles. The individual on the lease does not own the asset at the end of the lease’s term, it is strictly for rental purposes. |
| TERM | DEFINITION |
|---|---|
| MSRP (Manufacturer’s Suggested Retail Price) | Car manufacturers will offer recommendations on how much a car should be priced at the retail level, known as the manufacturer's suggested retail price, or MSRP. The purpose of the MSRP is to standardize pricing in the automobile industry so that there is not a lot of fluctuation in price from one dealership to another. |
| TERM | DEFINITION |
|---|---|
| Title Loan | A title loan uses the vehicle title as a form of collateral to secure a loan. Borrowers must own their vehicles free and clear and no longer owe any amount on a car loan. A lender will place a lien on the car title in exchange for funds. If the borrower defaults on the loan, the lender can take possession of the vehicle and sell it to cover any losses. |
| Trade-in Allowance | A trade-in allowance is the amount that a car dealer will reduce the cost of a new car purchase by after the consumer's old vehicle has been traded in. It is somewhat like being given credit from the sale of an existing vehicle that is then applied to the purchase of a new vehicle. |
| Trade-in Value | A trade-in value is the amount that dealerships offer consumers for their vehicle and is typically applied toward the purchase price of another vehicle. Dealerships will assess the value of the vehicle and will base the amount that can be applied to a new car purchase. The consumer will then trade in the old vehicle and the assessed value amount will be deducted from the price of another vehicle. Trade-in value is often different than what the vehicle may be worth when sold in the open market. |
| TERM | DEFINITION |
|---|---|
| Vehicle Identification Number (VIN) | Every vehicle will have its own unique vehicle identification number, which is used to identify a specific vehicle. No two vehicles will have the same VIN, making them easily identifiable with this unique 17-character code. |