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Your Guide To Car Loans Ontario

Author: Lisa Rennie

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Lisa Rennie

Senior Contributor at Loans Canada

Lisa has worked as a personal finance writer for over a decade, creating unique content to help educate Canadian consumers. Expertise:

• Personal finance
• Real estate
• Mortgage financing
• Investing

Reviewed By: Priyanka Correia, BComm

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Priyanka Correia, BComm

Senior Editor at Loans Canada

As a senior member of the Loans Canada team, Priyanka Correia is committed to empowering Canadians with the knowledge they need to make smart financial choices.
Expertise:

• Personal finance
• Consumer borrowing
• Consumer banking
• Debt management

📅

Updated On: August 5, 2025

Your Guide To Car Loans Ontario - Compare Providers

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		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
19	1746662400		$250 - $1,500	$14 per $100	Up to 62 days	$250 - $1,500
100	1741219200		Up to $1,000	0% interest (30.4% APR)	30 days (revolving)	Up to $1,000
20	1718582400		$100 – $1500	$8 per $100 + 24%	Up to 62 days	$100 – $1500
100	1709683200		Up to $1,250	Up to 32%	90 – 150 days	Up to $1,250
23	1700524800		Up to $25,000	24.99% – 29.99%	30 or 60	Up to $25,000
16	1700524800		$100 – $1,000	29% – 35%	9 – 24	$100 – $1,000
100	1694390400		$500 – $2,500	18.99%		$500 – $2,500
18	1695254400		$500 – $5,000	Up to 32%	3 – 4	$500 – $5,000
10	1692748800		Up to $500	0%	Up to 65 days	Up to $500
100	1688083200		$150 – $1,600	10 – 35%	3 – 6	$150 – $1,600
100	1686182400		$300 – $3,000	18% + fees	6	$300 – $3,000
100	1686182400		$300 – $3,000	18% + fees	6	$300 – $3,000
100	1686182400		$300 – $3,000	18% + fees	6	$300 – $3,000
22	1683676800		$15,000	6.7%	Up to 60	$15,000
9	1670889600		$1,000 – $15,000	19.9% – 34.9%	–	$1,000 – $15,000
11	1666051200		$250	0%	–	$250
100	1643932800		$500 – $15,000	Starting at 18.9%	6 – 60	$500 – $15,000
100	1642723200		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1623369600		Varies	0%	6 or 8 weeks	Varies
1	1620777600		Up to $35,000	9.99% – 34.95%	6 – 60 months	Up to $35,000
24	1607558400		$500 – $50,000	Varies	6 – 60	$500 – $50,000
100	1600646400		$1,000 – $35,000	12.99% – 29.99%	12 – 84	$1,000 – $35,000
100	1598918400		Up to $15,000	–	–	Up to $15,000
100	1598832000		$500 – $15,000	Start at 10.99%	9 – 60	$500 – $15,000
100	1551830400		Up to $500,000	5.75% – 9.9%	–	Up to $500,000
19	1582243200		–	9.9% – 29.9%	12 – 60	–
100	1581033600		$5,000+	–	Up to 60	$5,000+
100	1580860800		$1,500 – $10,000	–	12 – 60	$1,500 – $10,000
17	1580774400		$1,000 – $25,000	8.99% – 34.99%	36 or 60 months	$1,000 – $25,000
100	1579478400		$100 – $1,500	$14 per $100	–	$100 – $1,500
7	1579478400		Up to $20,000	19.8% – 34.99%	36 – 85 months	Up to $20,000
100	1579219200		Up to $1,500	$14 per $100	Up to 30 days	Up to $1,500
100	1576713600		$500 – $100,000	Starting at 12.99%	Up to 60	$500 – $100,000
100	1562198400		$500 – $15,000	15.99 – 35%	6 – 60	$500 – $15,000
10	1552262400		$500 – $25,000	29.9% or 34.28%	6 – 84 months	$500 – $25,000
100	1551830400		$100 – $1,000	$14 per $100	14 days	$100 – $1,000
100	1551830400		$1,000 – $15,000	19% – 34.95%	12 – 60	$1,000 – $15,000
100	1551398400		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1551398400		$100 – $1,500	$14 per $100	14 – 31 days	$100 – $1,500
100	1551398400		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1546128000		Up to $5,000	19.9% – 35%	6 – 36	Up to $5,000
100	1551139200		$250 – $1,250	29% – 32%	3 – 6	$250 – $1,250
15	1551139200		Up to $15,000	34.99%	Open-ended	Up to $15,000
100	1550534400		$100 – $1,500	$14 per $100	14 days	$100 – $1,500
2	1569974400		Up to $1,500	$14 per $100	Up to 62 days	Up to $1,500
100	1550534400		Up to $1,500	$14 per $100	14 days	Up to $1,500
100	1550534400		$500 – $1,000	23%	3 – 6	$500 – $1,000
100	1550534400		$300 – $1,000	Up to 38%	3 – 4	$300 – $1,000
100	1549411200		$100 – $1,500	$14 per $100	14 days	$100 – $1,500
100	1549411200		$1,000 – $15,000	34.37%	9 – 60	$1,000 – $15,000
100	1567555200		$300 – $3,000	18% + fees	6	$300 – $3,000
100	1549238400		$100 – $1,500	$14 per $100	Up to 62 days	$100 – $1,500
100	1549238400		$250 – $1,500	23.99% – 29.99%	3 – 4	$250 – $1,500
20	1548720000		$500 – $1,000,000	7.9%	12	$500 – $1,000,000
100	1548720000		$500 – $50,000	Starting at 8.99%	3 – 120	$500 – $50,000
11	1545264000		$500 – $100,000	12.99% – 34.99%	9 – 60 months	$500 – $100,000
100	1545264000		$500 – $10,000	Starting at 9.90%	12 – 36	$500 – $10,000
6	1543622400		Up to $60,000†	19.99% – 34.99%*	6 – 120 months	Up to $60,000†
100	1545350400		$300 – $1500	Starting at 18%	3 – 7	$300 – $1500
100	1545350400		$300 – $3,000	22% – 32%	3 – 4	$300 – $3,000
12	1545350400		Up to $7,000	35%	6 – 60	Up to $7,000
15	1545350400		$500 – $1000	Up to 32%	3	$500 – $1000
100	1545350400		$500 – $750	23%	3 – 4	$500 – $750
100	1545350400		$500 – $750	22%	90 – 120 days	$500 – $750
100	1545350400		$300 – $3,000	27% – 35%	90 – 120 days	$300 – $3,000
5	1545264000		$500 – $150,000	9.99% – 34.99%	9 - 240	$500 – $150,000
4	1545264000		Up to $5,000	34.37%	–	Up to $5,000
8	1568937600		$500 – $10,000	Up to 34.99%	Up to 60 months	$500 – $10,000
21	1545177600		Up to $35,000	Starting at 12.99%	Up to 60 months	Up to $35,000
13	1545177600		$100 – $20,000	Up to 35%	Up to 60	$100 – $20,000

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
100	1745452800		$10,000 - $1,000,000	12% +	3 - 24	$10,000 - $1,000,000
9	1725321600		Up to $40,000	$0.75 per $1,000 per day	–	Up to $40,000
4	1714089600		$10,000 – $20,000,000	–	–	$10,000 – $20,000,000
3	1714089600		$10,000 – $2,000,000	10%+	Up to 36	$10,000 – $2,000,000
5	1669852800		$10,000 – $300,000	–	3 – 24	$10,000 – $300,000
100	1648512000		$1000 - $250,000	–	–	$1000 - $250,000
100	1620345600		–	–	12 – 60	–
100	1611878400		–	–	–	–
24	1607558400		$500 – $50,000	Varies	6 – 60	$500 – $50,000
100	1603756800		–	–	–	–
100	1598918400		–	–	–	–
100	1592438400		–	–	–	–
100	1585612800		–	–	6 – 60	–
100	1580947200		$200,000 – $5,000,000	–	–	$200,000 – $5,000,000
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		$5,000 – $1,000,000	–	–	$5,000 – $1,000,000
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580688000		Up to $10,000	Prime + 2.5%	Up to 60	Up to $10,000
2	1580256000		$5,000 – $800,000	–	6 – 24	$5,000 – $800,000
100	1579478400		$10,000 – $30,000,000	–	–	$10,000 – $30,000,000
100	1579478400		$50,000 – $5,000,000	–	3 – 36	$50,000 – $5,000,000
100	1579478400		–	–	24 – 60	–
100	1579478400		–	–	–	–
100	1579478400		Up to $1,200,000	–	12 – 84	Up to $1,200,000
100	1579046400		–	–	–	–
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1575849600		$5,000 – $150,000	Starting 15%	6 – 24	$5,000 – $150,000
100	1575849600		Up to $250,000	–	–	Up to $250,000
100	1575590400		–	–	–	–
100	1575590400		–	–	–	–
1	1545955200		$1,000 – $300,000	–	12 – 120	$1,000 – $300,000
100	1552262400		$500,000 - $10,000,000	–	–	$500,000 - $10,000,000
100	1552262400		–	–	–	–
100	1552262400		–	–	–	–
100	1552262400		Up to $250,000	–	Up to 10 years	Up to $250,000
100	1552262400		Up to $1,000,000	–	–	Up to $1,000,000
100	1551830400		–	–	–	–
100	1551830400		$10,000+	–	Up to 15 years	$10,000+
100	1551830400		Up to $1,000,000	–	Up to 15 years	Up to $1,000,000
100	1551830400		Up to $500,000	–	Up to 15 years	Up to $500,000
100	1551830400		-	–	Up to 84	-
100	1551398400		$3,500+	–	–	$3,500+
100	1551398400		$5,000+	4.9% – 24.99%	18 – 48	$5,000+
100	1551398400		$10,000 – $1,000,000	4% – 14%	12 – 84	$10,000 – $1,000,000
100	1551139200		Up to $250,000	–	Up to 48	Up to $250,000
100	1550534400		$500 – $50,000	2.75% – 8.25%	12 week cycles	$500 – $50,000
100	1550534400		$1,000 – $1,000,000	6% – 20%	–	$1,000 – $1,000,000
100	1550534400		Up to $5,000,000	–	24 – 72	Up to $5,000,000
100	1550534400		$5,000 – $200,000	–	–	$5,000 – $200,000
100	1549411200		$50,000 – $12,000,000	–	24 – 96	$50,000 – $12,000,000
100	1548720000		Up to $100,000	–	–	Up to $100,000
100	1548720000		$10,000 – $300,000	–	–	$10,000 – $300,000
100	1545264000		Up to $250,000	–	3 – 24	Up to $250,000
8	1545350400		$15,000 – $1,500,000	–	6 – 36	$15,000 – $1,500,000
6	1545177600		$5,000 – $300,000	9% – 35%	Varies by product	$5,000 – $300,000
7	1545177600		$5,000 – $500,000	4.96% – 24.93%	1 – 60	$5,000 – $500,000

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
100	1749600000		–	–	Up to 96 months	–
19	1582243200		–	–	Up to 60 months	–
6	1543622400		Up to $60,000†	19.99% – 34.99%*	6 – 120 months	Up to $60,000†
5	1545264000		$500 – $150,000	9.99% – 34.99%	9 - 240	$500 – $150,000
100	1620345600		–	–	Up to 96 months	–
2	1679529600		Varies	Varies	24 – 96 months	Varies
100	1643846400		$250 – $10,000	Starting at 14.99%	12 – 36	$250 – $10,000
3	1632960000		Min. $10,000	6.93% – 19.99%	18 – 96	Min. $10,000
8	1624233600		$5,000 – $75,000	–	12 – 96	$5,000 – $75,000
24	1607558400		$500 – $50,000	Varies	6 – 60	$500 – $50,000
7	1606435200		$500 – $10,000	Starting at 0%	3 – 48	$500 – $10,000
100	1600646400		$1,000 – $35,000	12.99% – 29.99%	12 – 84	$1,000 – $35,000
100	1582761600		–	–	36 – 96	–
6	1582761600		–	–	–	–
100	1582761600		–	Up to 29.5%	–	–
100	1581033600		–	–	–	–
100	1580688000		–	Starting at 12.9%	–	–
100	1579478400		–	–	–	–
100	1579478400		–	–	–	–
100	1579478400		–	–	–	–
100	1579219200		–	–	–	–
100	1578873600		–	Starting at 10.99%	–	–
100	1578873600		–	–	–	–
100	1551830400		-	–	12 – 96 months	-
100	1552262400		Up to $1,000,000	–	up to 96	Up to $1,000,000
100	1551830400		–	–	6 – 96	–
100	1551830400		$10,000+	–	12 – 96 months	$10,000+
100	1551830400		Up to $1,000,000	–	Up to 15 years	Up to $1,000,000
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1575849600		–	–	–	–
100	1575849600		$5,000 – $45,000	4.90 % – 29.95%	–	$5,000 – $45,000
100	1575849600		–	–	–	–
100	1575590400		–	–	–	–
6	1569974400		–	Up to 29.99%	12 – 96	–
100	1561507200		–	–	–	–
1	1560124800		Up to $100,000	3.99% - 19.9%	24 -96	Up to $100,000
100	1551830400		–	–	–	–
100	1551830400		Up to $500,000	–	6 – 48	Up to $500,000
100	1550534400		–	–	–	–
100	1548633600		–	Starting at 4.2%	–	–
100	1545177600		–	–	12 – 84	–

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		Up to $50,000	Prime – 35%	3 – 120	Up to $50,000
100	1578873600		Up to $50,000	–	24 – 60	Up to $50,000
100	1545264000		Up to $50,000	–	–	Up to $50,000

		Provider	Loan Amount	Rate	Term (Months)	Rating
0	0		N/A	N/A	N/A	N/A
3	1726531200		$5,000 +	6% – 16%	12 – 60	$5,000 +
7	1708473600		–	–	–	–
5	1700524800		–	-	-	–
100	1695945600		–	–	–	–
4	1690934400		–	–	–	–
2	1688601600		Min $110,000	4.14% – 6.29%	24– 120	Min $110,000
3	1679616000		$100,000 – $2,000,000	Varies	12 – 60	$100,000 – $2,000,000
4	1541030400		–	4.19% – 8.00%	6 – 120	–
100	1627344000		–	4.50% – 5.97%	12 – 60	–
100	1551830400		Up to $500,000	Starts at 8.49%	–	Up to $500,000
100	1581033600		–	4.19% – 6.04%	12 – 120	–
100	1580860800		–	–	–	–
100	1580860800		–	2.99% – 5.49%	6 – 60	–
100	1580860800		$50,000+	–	12 – 120	$50,000+
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580860800		–	–	–	–
100	1580688000		–	–	6 – 60	–
100	1580688000		–	4.19% – 6.04%	12 – 120	–
100	1580688000		–	–	–	–
100	1579478400		–	4.54% – 7.49%	6 – 120	–
100	1578873600		–	–	–	–
100	1578268800		–	–	–	–
100	1577059200		–	Varies	–	–
100	1577059200		–	–	–	–
100	1577059200		–	–	–	–
100	1577059200		–	4.49% – 6.63%	1 – 10 years	–
100	1574985600		$10,000 – $1,000,000	4.99% – 7.29%	12 – 120	$10,000 – $1,000,000
100	1574899200		–	–	12 – 60	–
100	1574899200		–	4.24% – 6.30%	–	–
100	1560124800		–	4.64% – 5.80%	1 – 10 years	–
100	1548806400		$10,000 – $3,000,000	Varies	12 – 24	$10,000 – $3,000,000
100	1548720000		–	–	12 – 60	–
1	1517097600		$10,000 – $500,000	Starting at 10%	–	$10,000 – $500,000

		Provider	Services	Rating
0	0		Debt Consolidation Program, Debt Settlement Program, Consumer Proposal, Bankruptcy Consultation	N/A (Referrer)
100	1743984000		Consumer Proposal, Bankruptcy
100	1576540800		Credit Counselling, Bankruptcy, Consumer Proposal
100	1576540800		Bankruptcy, Consumer Proposal
100	1576540800		Credit Counselling, Debt Management Program
100	1576368000		Credit Counselling, Debt Management Program
100	1576454400		Debt Restructuring, After Care - Credit Rebuilding Program, Corporate Debt Restructuring

In Ontario’s rural communities, public transit is typically limited or even nonexistent. In places like these, owning a car is essential for getting to work, grocery shopping, taking the kids to school, and accessing medical services. While public transportation in Toronto and other big cities across the province is accessible, you may still need a car, especially if you have small children or are living with a physical disability. 

That said, buying a car is not easy, especially given the rising cost of the average car. Thankfully, car loans can help spread the cost.

What To Expect When Getting A Car Loan?

Before applying for a car loan, it’s helpful to understand the factors that make up vehicle financing:

Learn more: Best Car Loans In Canada

Are You Eligible For A Car Loan?

To qualify for vehicle financing in Ontario, you’ll need to meet the following criteria:

• Debt-To-Income (DTI) Ratio: Your lenders will check how much of your monthly income is dedicated to your existing debt. Usually, a DTI ratio of 32% or lower is recommended to increase the chances of loan qualification.
• Down Payment: A down payment of 10% to 20% is generally recommended. However, some lenders may allow you to finance the full cost of the car.
• Credit History: A hard credit check is usually required. Most lenders want to see a credit score of 660 or more. That said, some lenders may accept much lower scores.

When applying, you may need to provide certain documents such as: 

• A valid Ontario driver’s licence
• Proof of residency
• Proof of income (pay stubs, employment letter, or tax returns)

Can You Get A Car Loan As A Newcomer?

As noted, your credit score plays a role in your ability to get a car loan. Unfortunately for newcomers to Canada, it’s not possible to bring their credit from their home country to Canada. Instead, they need to build credit in Canada from scratch.

Fortunately, this doesn’t have to be a barrier to auto financing. Newcomers to Canada can still be eligible for car loans, even without an established credit history. Many major banks and online lenders have programs tailored for newcomers, focusing on other criteria, like income, debt, and job security.

Where Can You Get A Car Loan In Ontario?

Multiple sources are available for car financing in Ontario, including the following: 

Manufacturer Financing 

Auto manufacturers often offer loans directly through their own financial arms, like Toyota Financial Services. These programs often come with attractive incentives, such as 0% interest rates or cashback offers.

Manufacturer financing is most suitable for buyers who are purchasing a new vehicle directly from a specific brand, want to take advantage of promotional deals, and have good credit.

Dealership Financing

While most dealerships offer financing through their network of partnered lenders, some may offer in-house financing, which involves the dealership financing the loan directly. Dealership financing is a convenient option, since the shopping and financing processes are done in one place. 

Dealership financing can be particularly useful for those with bad credit and those looking to buy a used car.

Banks

If you want bank financing, you generally have two options:

Private Party Auto Loan 

When purchasing a used car directly from another individual (not a dealership), you can apply for a private party car loan directly with the bank. However, there may be certain requirements, such as a minimum loan amount and the age and condition of the car. 

Bank Car Loan

If you’re looking for bank financing for a car from a dealership, you generally must apply with a partnered dealership instead of the bank. Most big banks partner with dealerships across Ontario to streamline the auto financing process for car buyers. Simply visit a dealership and request bank financing after you’ve chosen your vehicle. Dealership staff can take care of the application process by dealing with the bank.

You can even apply online, using a digital tool to facilitate the process. For example, the TD Wheels App allows you to browse available vehicles for sale, estimate monthly payments, and apply for financing directly online. This is especially convenient for those who prefer to shop and apply entirely online without physically visiting a dealership.

Private Lenders

Private lenders tend to offer more flexible approval requirements and are more willing to work with bad credit borrowers. However, interest rates tend to be higher among private lenders, especially for those with poor credit histories. 

If you’re struggling to get financing due to bad credit, a private lender can be a good choice.

How To Apply For A Car Loan?

To apply for a car loan in Ontario, follow these steps:

• Step 1: Compare Lenders. Compare loan quotes or use an online platform like Loans Canada to find lenders who are willing to work with someone with your financial and credit profile. Doing so will help find the best deal on car financing to save you money and fit with your financial comfort level.
• Step 2: Start Shopping. Based on your loan options, begin searching for a vehicle that fits your budget.  
• Step 3: Finalize Financing. Once you find the right car, you can finalize the loan with your lender or dealership. Carefully review the loan agreement, paying attention to the interest rate, term length, and any additional fees before signing.

Be Sure To Consider The Following When Getting A Car Loan

There are plenty of factors to consider before applying for vehicle financing in Ontario, including the following:

Can You Afford To Buy A Car?

In Canada, the average price of a new car is currently $65,219, and for used vehicles, the average price is $34,445. So, can you afford to make this purchase? This is an important question to ask before you commit to a financing agreement.

Not only should you consider the purchase price and financing rates of a vehicle loan, but you should also factor in other costs of ownership, like gas, insurance, maintenance, and repairs.

To help you understand what you can afford, you can use the 20/4/10 rule, which is based on the following:

• 20% Down Payment: Making an upfront payment of 20% of the purchase price of the car can reduce your loan amount and monthly payments, while minimizing the potential for getting into “negative equity” territory. 
• 4-Year Term: Keep your loan term to 4 years or less to avoid higher interest costs and strain on your finances. 
• 10% Percentage Of Your Income: Ideally, your car-related expenses shouldn’t exceed 10% of your net income to maintain financial stability. 

Learn more: How Much Car Can I Realistically Afford?

Check The Car History (For Used Cars)

Checking a used car’s history helps you discover past accidents, repairs, or ownership changes that could affect its safety or reliability. A vehicle history report can also protect you from hidden issues like salvage titles or unpaid liens. By reviewing the car’s history, you can make a more informed buying decision and avoid paying more for a car that won’t last.

Look For 0% Car Financing Deals

Sometimes car dealerships offer 0% financing deals as incentives to attract car buyers. This is a great way to keep financing costs as low as possible.

It’s important to keep in mind that these deals may only be offered every so often and may not always be available. They may also be restricted to specific models, and may only be accessible to those with excellent credit.

Watch Your Down Payment To Avoid Negative Equity

Negative equity happens when the value of your car is less than what you still owe on the car loan. Also referred to as being “upside down” on a loan, negative equity can make things difficult for you if you plan to sell the car in the future, or if the vehicle is involved in a collision and an insurance claim is filed. 

One way to avoid the potential for negative equity is to make a large down payment upfront, which gives you instant equity in the car.

Should You Buy New Or Used?

Buying new or used each comes with its own perks and drawbacks:

• Buying New: When you purchase a new car, you might pay more and will have to deal with rapid depreciation early on. But, you’ll get the latest technology, full warranty, and fewer trips to the mechanics over the first few years. 
• Buying Used: A used car is typically more affordable and depreciates more slowly. However, it may require more maintenance and come with less warranty coverage. 

Your Rights When Buying A Car In Ontario

You have rights when you buy a new or used vehicle from a registered dealer in Ontario:

• No Cooling-Off Period: Before signing a vehicle contract in Ontario, make sure you’re certain about your decision, as there’s no cooling-off period. That means most contracts are legally binding right off the bat. 
• 90-Day Contract Cancellation: You can cancel the contract within 90 days only if key information is missing or inaccurate. 
• All-Inclusive Pricing: Dealer ads must show an all-inclusive price and disclose if the car was previously used as a rental, police, emergency, or taxi vehicle. Manufacturer ads don’t have to follow these rules. 
• Seizure Of Financed Cars: Once you’ve paid off two-thirds of the loan amount, your vehicle cannot be repossessed or resold without a court order.

Learn more: Ontario.ca

Costs To Consider When Buying A Car

The total cost of a car involves much more than just the ticket price. Be sure to factor in the following costs before making a purchase:

• Registration Fees: The primary vehicle registration cost in Ontario is $32 fee for a vehicle permit. New license plates cost an additional $59.
• Car Sales Tax: You’ll need to pay 13% HST on the purchase price of the vehicle. Do note that in Ontario, you can transfer vehicle ownership to a family member without paying retail sales tax. You’ll need to visit a ServiceOntario centre to complete this transfer.
• Car Insurance: It’s mandatory to have insurance on your vehicle in Ontario. The cost of car insurance varies based on factors such as your age, gender, address, driving record, and claims history. That said, the average cost of vehicle insurance in Ontario is currently $1,528, with prices on the rise. 
• Dealership Fees: Car dealerships may charge the following fees that you should be aware of:
  • Freight charges
  • PDI-PDE (pre-delivery inspection/expense) 
  • Administration/documentation fees 
  • Government levies 
  • Tire levy fees
  • Advertising fees
  • Brokerage fees
• Loan Costs: Don’t forget to calculate how much your car loan costs. Consider the interest rate, term, and potential fees such as late or early prepayment fees. 

Alternatives To A Car Loan 

Aside from a traditional car loan to pay for a vehicle, there are other ways to cover this big purchase:

• Pay In Cash: Paying upfront means you can avoid interest charges, monthly payments, and credit checks. You may even use your position to negotiate a lower price. Plus, paying in cash will help you avoid the risk of negative equity.
• Lease: Leasing allows you to drive a new car every few years with lower monthly payments compared to a traditional car loan. Just be mindful of mileage limits and wear-and-tear charges.
• Public Transportation: Taking the bus or train is a cost-effective alternative to owning a car, especially if you live in an urban area. You can avoid loan costs, maintenance, insurance, parking fees, and gas entirely.

Additional Reading

84-Month Car Loans: The Good And The Bad

Car Loans For Students

Car Loans After Bankruptcy

Final Thoughts

Auto loans in Ontario offer a convenient way to cover the cost of a vehicle purchase, but it’s important to understand rates, terms, eligibility, and affordability. Be sure to shop around for car prices and lender options before committing to a car loan. Whether you’re financing through a bank, dealership, or private lender, making a more informed decision can lead to financial preparedness.

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