Canadian Car Loan Calculator
Calculate your monthly, bi-weekly, or weekly car payments with tax, trade-in value, fees, and a full amortization schedule. Built for Canadian auto financing.
Your Loan Details
How to use this calculator
- Enter the vehicle price and your down payment.
- Add your trade-in value and any fees (delivery, admin, etc.).
- Select your province to auto-fill the correct tax rate.
- Enter your interest rate and loan term.
- Click Calculate Payments.
Quick start with a preset:
Your Results
Enter your loan details and click Calculate Payments to see your results.
Monthly Payment
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Principal vs. Interest
💰 Your Complete Cost Breakdown
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Understanding Car Loans in Canada
🔢 How Car Loan Payments Are Calculated
Canadian auto loan payments use a standard amortization formula. Your monthly payment is calculated so that each payment covers both principal (the amount you borrowed) and interest (the cost of borrowing). In early payments, more of your money goes toward interest. As the loan progresses, more goes toward principal. Unlike Canadian mortgages — which compound semi-annually by law — auto loans use simple monthly compounding, the same formula used by most banks and dealerships across Canada.
🚘 New vs. Used Car Financing in Canada
New cars typically qualify for lower interest rates — often as low as 0–4% through manufacturer promotions — but have higher sticker prices. Used car loans typically carry higher rates (7–15%) because the vehicle is harder to repossess and sell if payments stop. Used cars also depreciate less dramatically. In Canada, financing through your bank or credit union often produces better rates than dealer financing, especially for used vehicles. Always compare at least two lenders before accepting a dealer's rate.
💰 How Down Payments Affect Your Loan
A larger down payment reduces your loan principal, which reduces your monthly payment and total interest paid. It also reduces the risk of being "upside down" — owing more than the car is worth. This is especially important in Canada because most vehicles depreciate 15–25% in the first year. A down payment of at least 20% is generally recommended to avoid negative equity. If you have a trade-in, it typically reduces the taxable purchase amount in most provinces, saving you additional money on sales tax.
📅 Loan Term vs. Total Cost
Choosing a longer loan term lowers your monthly payment but dramatically increases the total interest you pay. For example, a $30,000 loan at 7% costs about $3,200 in interest over 48 months, but over $5,400 over 72 months — 70% more. Longer terms also increase the risk of negative equity since the car depreciates faster than you're paying it down. Financial advisors generally recommend keeping auto loan terms to 60 months or less, and buying a car where total auto costs (payment + insurance + fuel) stay under 15–20% of your monthly take-home pay.
🇨🇦 Sales Tax on Vehicles in Canada
In Canada, provincial sales tax (HST, GST+PST, or GST only) applies to vehicle purchases. Most provinces calculate tax on the vehicle price minus the trade-in value — meaning your trade-in saves you tax money. Ontario charges 13% HST on the full purchase price minus trade-in. Alberta charges only 5% GST. Quebec charges both GST and QST (≈14.98%). Private sales may have different tax rules than dealership purchases — always check your province's rules. This calculator auto-fills the correct combined rate based on your selected province.
❓ Frequently Asked Questions
What is a good car loan interest rate in Canada?
In 2026, good rates for new cars from major banks range from 5–8%. Excellent credit (750+) may qualify for 0–4% manufacturer promotions. Used car rates typically run 7–12%. Credit unions often offer rates 1–2% lower than banks. Always compare your bank's rate against the dealer's offer before signing.
How much car can I afford in Canada?
A common Canadian guideline is to keep total vehicle costs (payment + insurance + fuel + maintenance) under 15–20% of your monthly take-home pay. For a household earning $80,000/year (~$5,400/month after tax), that's roughly $800–$1,100/month maximum. If insurance and gas cost $400/month, your loan payment should stay under $400–$700.
Is it better to finance through the dealer or my bank?
It depends. Dealers occasionally offer manufacturer-subsidized 0% financing that banks can't match. However, for most used car purchases, your bank or credit union typically offers lower rates than dealer financing. Get pre-approved by your bank before visiting a dealership — it gives you a benchmark and negotiating power.
Does paying bi-weekly save money vs monthly?
For car loans, the savings from bi-weekly vs monthly payments are minimal compared to mortgages, because auto loans are shorter. The bigger impact comes from the total term and interest rate. That said, bi-weekly payments can help you build a habit and pay down the loan slightly faster.
Can I pay off my car loan early in Canada?
Most Canadian auto loans allow early repayment without penalty, but always confirm with your lender. Paying extra toward principal each month can save significant interest. Even one extra payment per year can shorten a 60-month loan by several months and save hundreds of dollars in interest.