How To Finance A Toyota In Canada

How To Finance A Toyota In Canada

Written by Lisa Rennie
Fact-checked by Caitlin Wood
Last Updated September 29, 2022

A Toyota is a dependable, durable, and relatively affordable vehicle brand that many Canadians choose when choosing a vehicle to purchase. 

Despite the relative affordability of Toyotas, especially models like the Corolla and Yaris, you’ll still be spending tens of thousands of dollars on a new Toyota car. If you don’t have that kind of cash readily available, you’ll need a car loan to help you finance your purchase.

Read on to find out how to finance a Toyota and how much you can expect to pay for a car loan, including all applicable fees. 

Can You Finance Your Toyota Car Through A Toyota Dealership?

Yes, you can get a car loan to finance the purchase of a Toyota through a dealership. Toyota offers its own auto loans through Toyota Financial Services (TFS). 

You can use the Toyota website to get pre-approved for a car loan or lease, then take the pre-approval letter to a Toyota dealership to complete the process. Applying for a car loan or lease through Toyota requires just a few simple steps, though you’d be well-advised to do some comparison shopping first before settling on a car loan financed through Toyota Financial Services (TFS).

How To Apply For A Toyota Car Loan Through Toyota Financial Services (TFS) 

To apply for a car loan through Toyota, start by selecting your chosen vehicle. Then, enter your personal, employment, and financial information, and submit the application. Once you’ve been approved for a car loan, the vehicle purchase will be complete and you’ll start making payments toward repaying your loan.

What Do You Need To Qualify For Toyota Financing? 

To be eligible for a car loan through Toyota, you’ll need to meet the following criteria:

  • Age. You must be the age of majority in the province or territory that you live in. 
  • Residency. You must be a Canadian citizen or permanent resident to qualify for a car loan through Toyota.
  • Income level. Your income will be assessed to ensure you earn enough to cover your car loan payments, as well as all of your current bills.
  • Credit level. Your credit score is a key factor when it comes to securing car financing. Generally speaking, your credit score should be at least 660, though a higher score will increase the odds of loan approval at a better rate and terms.
  • Documents. To prove your financial health and creditworthiness, the lender may require documentation, such as an employment letter, bank statements, pay stubs, tax receipts, statement of assets and liabilities, and a government-issued ID. 

Other Ways To Finance Your Toyota In Canada

Besides applying for a car loan through a Toyota dealership, you can obtain financing through other avenues, including the following.

Finance A Toyota Through A Car Loan 

You can apply for a car loan through a conventional lender, such as a bank or credit union, or an alternative online lender. Car loans are typically secured, which means your car collateralizes the loan. Using your car as collateral reduces the risk for the lender, making the loan a little easier to secure and increasing the odds of getting a better rate. 

However, since you’re putting up your car to secure the loan, you risk having your car repossessed if you default on the loan.

Finance A Toyota Through A Personal Loan

You may be able to take out a personal loan and use the funds from the loan to cover the purchase price of your new Toyota. A personal loan is usually unsecured, which means there’s no collateral to back the loan. Because of the lack of collateral, unsecured personal loans come with a higher risk for the lender, as such, you may be charged a higher interest rate as a result.  

Finance A Toyota Through A Car Dealership

Applying for a car loan directly through a car dealership is a convenient way to finance a car, as you can take care of the car financing process at the same time that you finalize your vehicle purchase. In this case, the dealer will take care of everything for you, including vehicle registration and license plates. 

Loan terms typically range from 3 to 8 years, and down payment requirements are usually at least 20% of the car’s purchase price for new vehicles. Down payment amounts for used cars may be lower since they don’t depreciate at the same rate as new cars.

Cost Of Financing A Toyota

The amount you’ll pay in total to finance the purchase of a Toyota depends on a few important factors, including the following:

  • Vehicle price. The more expensive the car, the more you’ll need to spend on a vehicle purchase. 
  • Down payment. Making a bigger down payment will lower the loan amount, which will help you reduce the overall loan cost. 
  • Loan amount. Lenders often have minimum and maximum loan amounts that they allow, which will impact your ability to use the loan to cover the cost of your vehicle.
  • Loan term. Longer loan terms usually mean lower monthly payments, but they also mean more interest paid overall. The longer the term, the more interest accrues and the more you’ll need to pay.
  • Interest rate. A lower interest rate will have a significant impact on the overall amount you have to pay by the end of the loan term. The rate you’re charged will depend on a few things, including your lender, your credit score, and whether you choose a fixed- or variable-rate loan.
  • Fees. Loans often come with a few additional fees which will impact your car loan costs, including application fees, underwriting fees, late payment fees, and early repayment penalty fees.
  • Repayment schedule. Monthly payment schedules are the most common, though you may also choose to make bi-weekly or weekly payments to pay off your loan a little sooner. Be sure to choose a payment schedule that fits within your budget.

Calculating The Cost Of A Toyota Car Loan

The following chart provides an illustration of how much a car loan will cost you based on the different Toyota models available. The data compiled below is based on the following:

  • 20% down payment
  • 60-month loan term
Model TypeApproximate Starting Price Total Borrowed
(Starting price – down payment)
Interest RateMonthly PaymentTotal Cost
Corolla  $19,500$15,6004.09%$287.93$17,275.8
*Note: this example does not include taxes and other fees which may affect the total cost

Does Toyota Offer Any Discounts? 

You may be able to cut costs when buying a Toyota by taking advantage of discounts available from the car manufacturer. Toyota offers national and regional promotions, with special interest rates offered for financing and leasing. 

For instance, right now, Toyota’s national promotions on rates are as follows:

  • 2022 Corolla LE: Finance from 4.09% 
  • 2022 Corolla XSE CVT: Finance from 4.09% 
  • 2022 RAV4 XLE AWD: Finance from 4.99% 
  • 2022 Highlander XLE AWD: Finance from 4.79% 
  • 2022 Camry SE AWD: Finance from 4.69% 

Toyota also offers cash incentives up to $4,000, though some may only be available through Finance Assist. 

Toyota Financing FAQs

Can I finance a Toyota with bad credit?

Your odds of getting approved for a car loan to finance the purchase of a Toyota are much higher if you have a good credit score. A low score will reduce your odds of loan approval. But that doesn’t mean it’s impossible. If you have bad credit, your chances of loan approval are higher if you apply with an alternative online lender, especially one that caters specifically to bad credit borrowers. Keep in mind that your interest rate may be much higher if you apply with bad credit.

How do I choose the best financing option?

The best way to pick the best financing option is to gain a clear understanding of your personal finances and your lifestyle. For instance, if you’re looking for a car loan with low monthly payments and a steady interest rate, then a fixed-rate car loan with a longer term and monthly payments may be most suitable. Or, if you like the idea of not having to maintain your car, then perhaps a lease might be better than financing. 

Can I refinance my Toyota?

You may be able to refinance your car, but that will depend on the lender. Your lender may be more willing to offer a refinance if you’ve been diligent with your car loan payments and your credit score has improved since you initially applied for your loan. If you only have a small amount left to pay back on your loan, a refinance might not make sense.

Final Thoughts

Financing a Toyota comes with a variety of costs, so you’ll want to find out exactly how much you’ll pay on top of the ticket price for your next vehicle. If you’re planning to buy a new Toyota, you have plenty of loan options available to you, especially if you have good credit. But even with bad credit, there are several online lenders that may be able to offer you a car loan that is suitable for you.

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Lisa has been working as a personal finance writer for more than a decade, creating unique content that helps to educate Canadian consumers in the realms of real estate, mortgages, investing and financial health. For years, she held her real estate license in Toronto, Ontario before giving it up to pursue writing within this realm and related niches. Lisa is very serious about smart money management and helping others do the same.

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