When it comes to the world of luxury cars, Mercedes-Benz is at the top of many drivers’ lists. With millions of sales worldwide every year, the iconic German brand has been producing some of the most stylish and high-performing vehicles since the early 1900s. Yet despite their best-in-class horsepower, comfort, and safety, Mercedes still comes at a steep price tag, leaving car buyers often in need of financing to afford this purchase.
If that’s you, read on to find out how to finance a Mercedes in Canada.
Key Points
- Compared to other car brands, Mercedes is among the more expensive ones, with average prices typically higher than the average car price.
- Considering the high cost of a Mercedes, it may be necessary for you to use a loan to finance this expensive purchase.
- Financing for Mercedes is available through Mercedes-Benz Financial Services, car dealerships, banks, credit unions, and private lenders.
How To Finance A Mercedes In Canada
There are a few ways to finance your Mercedes purchase. Be sure to compare all available options and choose one that best suits your needs.
Mercedes Manufacturer Financing
The Mercedes manufacturer offers financing options through Mercedes-Benz Financial Services Canada. You can use these services to both finance or lease your Mercedes. These services can also be used to finance both new and used Mercedes models.
Once you’ve chosen a vehicle, you can apply for financing directly with your Mercedes-Benz dealer, who will then arrange the final details of your financing contract. You can also apply for financing on the Mercedes website by providing your name, birthdate, employment status, and income. You can receive the results of your application within 1 business day.
Mercedes Financing With A Car Loan
With a standard auto loan, the lender provides a lump sum of money to cover the cost of the vehicle, which is typically disbursed to the dealership. You’ll then make regular installment payments over a set term until the loan is fully repaid.
You can get traditional car financing through banks, credit unions, and private lenders. Car dealerships typically partner with specific financial institutions, which means you would apply for a car loan directly with the dealer, but the loan itself comes from their partnered lender.
| Note: When financing your Mercedes, your vehicle serves as collateral for the loan. While this can help you secure a lower rate, it also means your vehicle is at risk of repossession if you default on the loan. So, be sure to make on-time loan payments to avoid losing your car. |
Can You Finance A Mercedes From A Private Seller?
Yes, you can finance a Mercedes from a private seller in Canada through a private party auto loan.
With this type of financing, you can buy a Mercedes directly from a private seller. The funds from the loan can be used to cover the full price of a vehicle, all in cash. Private party auto loans are available from banks, credit unions, and online lenders.
Even if you have bad credit, you may still be able to secure a private party auto loan, though you may have to take the alternative lender route, and ensure that your income is strong to qualify.
Eligibility Requirements To Finance A Mercedes In Canada
To get approved for Mercedes financing in Canada, you’ll typically need to have the following:
| Good Credit | Your credit score tells lenders how likely you are to make timely loan payments. The higher your credit score, the better your chances of loan approval with an affordable rate. |
| Sufficient Income | Your income must be high enough to cover your Mercedes car loan payments and your existing bills. |
| Down Payment | A sizable down payment will not only reduce the loan amount you need, but it can also keep your loan payments lower. A higher down payment reduces the lender’s risk and therefore makes it easier to qualify for financing. |
Can I Get Mercedes Financing With Bad Credit?
Yes, you can still qualify for Mercedes financing even if you have bad credit. Car dealerships and alternative lenders often work with bad credit borrowers to help them secure a car loan to purchase a Mercedes. However, you must still meet other loan requirements, including having a sufficient income.
Learn more: Bad Credit Car Loans
Cost Of Financing A Mercedes
The cost to finance a Mercedes depends on the model, as they vary quite a bit in price. Further, you’ll typically pay more for a new Mercedes versus a used one.
Here are some examples to give you a better idea of what you could pay to finance a Mercedes (to simplify things, we’ll use a rate of 2.99% and payment plan of 84 months):
| Model | Starting MSRP | Total Interest | Monthly Payment | Total Cost |
| GLB SUV | $55,900 | $6,123.21 | $738.37 | $62,023.21 |
| E-Class Sedan | $74,900 | $8,204.45 | $989.34 | $83,104.45 |
| GLE Coupe | $94,500 | $10,351.40 | $1,248.23 | $104,851.40 |
| Maybach S-Class | $147,500 | $16,156.95 | $1,948.30 | $163,656.95 |
| G-Class SUV | $189,900 | $20,801.39 | $2,508.35 | $210,701.39 |
Factors Involved In The Cost Of A Mercedes Finance In Canada
When financing your Mercedes, the following factors play a direct role in the cost:
- Interest Rate: The average car loan interest rate is around 7% – 8%. A higher interest rate increases the total cost of a car loan, while a lower rate reduces the cost of borrowing, making the loan more affordable.
- Loan Term: A longer loan term lowers monthly payments but increases total interest costs, making the loan more expensive over time. On the other hand, a shorter term means higher monthly payments, but less interest paid overall, saving you money over the long run.
- Sales Tax: Depending on which province you buy the car from and whether you’re buying new or used, you’ll likely have to pay sales tax on the vehicle purchase. You can either pay the tax upfront, or roll it into the car loan. The latter option would effectively increase your loan amount and therefore raise your monthly payments.
| Luxury Sales Tax In Canada, if your vehicle’s price exceeds $100,000, you may have to pay a federal luxury tax. This tax is calculated as 10% of the total price or 20% of the amount over $100,000, whichever is less. The luxury tax is added at the point of sale, before sales tax is applied, which increases the final cost. With many Mercedes models exceeding the $100,000 price point, the luxury tax is often applied on this purchase. |
Special Financing Programs Offered By Mercedes
Mercedes-Benz offers some unique financing perks for Canadian drivers:
- Star Access Program: Are you thinking of purchasing a Mercedes, certified pre-owned vehicle? If you do so from a participating dealership, you may be eligible to get concierge service support when buying premium tickets for a Live Nations Canada concerts countrywide. Just email or call their dedicated concierge service to attend shows, concerts, and get exclusive tickets for Mercedes owners.
- Star Advantage Program: With the Star Advantage Program, you’ll have the option to finance with lower monthly payments and a larger final balloon payment at the end of the term. Once the term ends, you can refinance the loan or pay it off to keep your vehicle.
- Preferred Vendor Program: Employees of approved vendors and partners may be eligible for exclusive pricing and incentives through the Preferred Vendor Program. Participants can get special discounts on new Mercedes models, as well as other retail offers provided to the general public.
Types Of Warranties Offered By Mercedes-Benz
New vehicles tend to come with a limited factory warranty, which covers basic manufacturer defects. When buying a Mercedes, you have a couple of options in terms of warranty:
Factory Warranty
All new Mercedes-Benz cars come with a basic manufacturer warranty that lasts for 4 years or 80,000 km, as well as coverage for these components:
- Surface Corrosion = 4 years/80,000 km
- Perforation Corrosion = 5 years/unlimited km
- Wear and Tear = 2 years/40,000 km
- Roadside Assistance = 4 years/unlimited km
- Adjustment Period = 1 year/20,000 km
- Emission System = 2 years/40,000 km
Extended Warranty
When financing a Mercedes, you have the option to buy an extended warranty. The Mercedes extended warranty provides protection for up to 7 years or 160,000 km, whichever comes first. This package covers unexpected repair costs extending beyond the standard 4-year/80,000 km new car warranty.
Alternative Options To Financing A Mercedes
Financing may be a common option when buying a Mercedes, but alternatives exist to help you cover the price tag of your vehicle:
Paying Cash For Your Mercedes
Paying cash for a Mercedes may be a great option if you have the liquid cash available to cover the full price. Whether you buy new or used, making an all-cash deal can eliminate interest costs associated with financing or leasing, making it more affordable than financing.
You’ll also own the vehicle outright, which means no risk of going underwater on a loan, no monthly payments, and no credit checks to go through.
Learn more: Is Paying Cash For A Car A Good Idea?
Mercedes Financing With A Personal Loan
While car loans are the most common way to finance a vehicle, you can also finance the purchase with a personal loan.
Car loans are used specifically to finance a vehicle, but personal loans can be used to cover the cost of just about anything, making them very flexible and versatile. When using a personal loan to finance a Mercedes, you would take out a lump sum of money and repay the lender via regular installments over a set term, much like a car loan. You can access personal loans from banks, credit unions, and alternative lenders.
Using a personal loan can be especially useful if you’re buying a used Mercedes from a private seller. In this way, you can use the funds from the loan to make an all-cash deal with the seller.
Learn more: Best Personal Loans In Canada
| Note: Personal loans are often not secured, which makes them a higher risk for lenders. As such, these loans often come with higher interest rates, and it may be more difficult to qualify for large amounts compared to traditional car loans. |
Leasing A Mercedes
If you enjoy changing your car up every few years, you may prefer a Mercedes leasing plan, as it essentially allows you to rent a vehicle for an extended period. Plus, dealership leasing rates can be slightly lower. Term lengths, vehicle selection and delivery options vary by location.
Final Thoughts
If you’re a luxury car enthusiast, financing a Mercedes can definitely be a good option. However, buying a luxury car also comes with a new set of financial responsibilities. Be sure to find out all financing options available, and consider your ability to manage car payments before committing to a Mercedes purchase.
