If you’re searching for the best car loans in Canada, you have many options. You can apply to a direct lender, dealership or car loan search platform. Consider applying to a dealership or car loan search platform as they have strategic partnerships with lenders to help their customers find the most competitive car loan offers.
Use this guide to find out some of the best car loan providers in Canada. No single car loan is best for everyone, so compare your options to find the right fit for your unique situation.
Best car loans in Canada
To approve you for a car loan, lenders will want to see that you’re earning at least $1,200-$1,800 per month. If you have bad credit, it’s possible for some lenders to still approve you, but they will charge higher interest rates.
Car loan provider
APR
Loan term
Key features
3.90% - 29.90%
12 - 96 months
Loan search platform for new and used car financing
CarsFast is a car loan search platform. Apply online and get matched with financing offers that meet your needs. Purchase a new or used vehicle. CarsFast was the car loan search platform finalist in the Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of 82.50%. Full Review
Best benefits
Access a large network of dealerships. CarsFast is partnered with 350 dealerships to help people with good or bad credit find a car loan.
Fast quotes. Get your rate offers within minutes of applying.
Choose the best offer. Receive multiple offers and choose the one that's best for you.
Accepts bad credit
Has worked with over 350,000 customers
Lending network consists of established lenders like the big banks
No sign up or log in required
High rates for bad credit
Offers are limited to dealerships within CarsFast's network
With one Loans Canada application you can compare multiple lenders on its innovative online car loan search platform, helping you find the best terms and interest rates on your car loan for your unique needs and budget. Loans Canada can matches you with either a national lender or one that works exclusively in your province or territory. Loans Canada won for best car loan search platform in the Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of 86.00%. Full Review
Best benefits
Save time. Your application will be cast wide and you'll get your results right after you apply.
Easily compare offers. Compare offers from multiple lenders in one place.
Work with an established company. Loans Canada has been in business since 2012 and is accredited by the Better Business Bureau (BBB) with an A+ rating.
Accepts bad credit
Over 60 lenders in its network
Fast pre-approvals
High rates for bad credit
Offers limited to what's available in Loans Canada's network
Clutch is an online dealer with a large inventory of used cars. It is available in Ontario and Nova Scotia. Shop for a car online, have it delivered to your door and 'test own' for a period of time. Clutch made it to both the top 15 most recommended and the top 15 best-rated car loan providers in the Finder: Car Loans Customer Satisfaction Awards 2023. Full Review
Best benefits
Get a seamless experience. Avoid the hassle of dealing with a salesperson. Clutch car prices are non-negotiable as they already price cars competitively.
Benefit from a trial period. Use the car for 10 days/750 km and return it if you're unhappy.
Find the best rates. Clutch works with Canada's largest lenders to help you find the best rates.
Easy process from beginning to end
One-stop shop
Options for all credit scores
Offers limited to Clutch's network
High rates for lower credit scores
New cars not available
Loan amount
Starting at $7,500
APR
Starting at 8.49%
Term
24 - 96 months
Interest Rate Type
Fixed
Min. Credit Score
580
Fees
Service fees will apply depending on where you live: $899 in Nova Scotia
Approval Genie is a direct lender that owns a small network of used car dealerships. Operating in Ontario and Quebec, you can also get financing through Approval Genie. Canadians of all credit scores can apply, including those with bad credit. Full Review
Best benefits
Apply for financing with any credit score. Approval Genie will work with you to secure financing.
Fast and easy approval process. Approval Genie has a quick, simple application and approval process.
Good customer reviews. Approval Genie has lots of positive customer reviews online.
Secure financing, browse through used vehicles online and have your car delivered to your home with CarDoor. CarDoor made it to both the top 15 most recommended and the top 15 best-rated car loan providers in the Finder: Car Loans Customer Satisfaction Awards 2023. Full Review
Best benefits
Hundreds of vehicles available. Browse and choose from hundreds of used vehicles.
Money-back guarantee. If you're unsure about the vehicle, set your mind at ease with a 14 day money-back guarantee.
Trade-in or sell your current vehicle. You can choose to trade-in or sell your existing vehicle with CarDoor.
LoanConnect is a car loan search platform that can match you with lenders. Get multiple offers within minutes and your funds in as little as 24 hours. LoanConnect made it to the top 15 best-rated car loan providers in the Finder: Car Loans Customer Satisfaction Awards 2023. Full Review
Best benefits
Get approved with any credit score. LoanConnect works with all types of borrowers.
Get an offer fast. Get pre-approval offers within minutes after applying.
Apply without a cosigner. Save time from having to find a cosigner since Canada Auto Finance doesn't require this.
Easy application
More choice
Free service
Transparent terms
High loan amounts
Quick deposits
No collateral required
Few eligibility requirements
Offers limited to LoanConnect's network
High rates for bad credit
Loan amount
$500 – $50,000
APR
8.99% – 46.96%
Term
72 - 84 months
Interest Rate Type
Fixed
Min. Credit Score
550
Fees
Varies by lender, loan type and province
Turnaround Time
Get pre-approved in as little as 60 seconds, and receive money in as little as 24 hours from the time of your application.
Get competitive rates and flexible terms from one of the Big Six banks. Take up to 5 years to repay your car loan. BMO Car Loans won the best traditional car loan lender in the Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of 90.77%.Full Review
Best benefits
Choose between a fixed and variable rate. If you get a fixed rate, it will stay the same throughout the life of the loan. If you get a variable rate, it will go up or down depending on what the Bank of Canada does. Save on interest if the rate goes down.
Get flexibility. Choose between monthly, semi-monthly, bi-weekly and weekly payments, and defer a payment twice a year if you need to.
Work with a reputable lender. BMO is one of the largest banks in Canada and can offer low rates if you have a strong financial profile.
No prepayment penalties
Apply at a dealership for potentially better rates
iA Auto Finance specializes in auto financing for Canadians who can't get approved by a bank. iA Auto Finance was the finalist in the best car loan alternative lender category in the Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of 84.00%. Full Review
Best benefits
Work with an established direct lender. iA Auto Finance is owned by iA Financial Group, which was founded in 1892.
Reduce your car loan rate every year. It offers the Rate Reducing Loan, which allows you to lower your rate by 10% every year when you make on-time payments.
Get a loan from an award finalist. iA Auto Finance ranked second in the J.D. Power 2023 Canada Dealer Financing Satisfaction Study for the non-captive, non-prime segment.
Get TD financing from over 4,500 dealerships. Finance a new or used vehicle, including cars, trucks, RVs, marine vehicles, powersport vehicles and privately sold vehicles. Choose between a fixed and variable rate. TD Car Loans was the finalist for the traditional car loan lender category in the Finder: Car Loans Customer Satisfaction Awards 2023 with an overall customer satisfaction score of 87.94%. Full Review
Best benefits
Work with one of the Big Six. You'll be getting a competitive car loan from a trusted, experienced lender.
Get a loan from an award winner. TD ranked first in the J.D. Power 2023 Canada Dealer Financing Satisfaction Study for the non-captive, non-prime segment.
Compare cars on its easy app. TD Wheels allows you to search for cars based on your price range.
Lengthy terms
Finance many types of vehicles
Use the TD Wheels App to search for a car and pre-qualify for financing
Payment extensions should you need flexibility
Pay off your loan without penalty
No down payment required
Rate offers limited to TD
Loan amount
$5,000 – $50,000
APR
Starting at 1.99%
Term
96 months
Interest Rate Type
Fixed
Serviced Provinces
All provinces
How we select the best car loans
At Finder, we spend hundreds of hours comparing and analyzing providers and products. Based on this research, we select the best car loans based on specific criteria and reasons. When choosing the best car loans, we consider each lender’s rates, fees, terms, borrowing amounts, funding speed, borrower perks, customer feedback and awards. Use our list of the best car loan suggestions as a tool — to help you narrow down the options and find the best auto financing to fit your needs. Remember, no single car loan will be the best choice for everyone, so compare your options before applying.
In 2023, we completed the Finder: Car Loans Consumer Satisfaction Awards — an annual ranking of car loan providers in Canada, based on customer satisfaction feedback. Read more about these awards and the methodology used to find the best car loan providers, based on customer service scores.
The 4 basic features of car loans in Canada
When shopping for the best car loan, you’ll need to consider four main features included in every auto financing contract.
Principal amount borrowed
The principal is the total amount you need to borrow from a lender. The amount is calculated using the purchase price of the car plus any fees, extra costs — such as dealer add-ons or upgrades — and taxes, minus any down payments or deposits you made.
Car loan interest rate
The car loan interest rate is the percentage your lender charges on the money you borrow. The interest rate you get will dictate your overall cost of borrowing money to buy a car. To get the best rate, several factors are considered, such as how much you want to borrow, the size of your down payment, your credit score, along with income and debt details.
A loan term is the amount of time it will take you to repay the car loan. The longer the loan term, the lower your monthly payments but the more interest you pay. The shorter the loan term, the higher your monthly payments but your overall cost to buy a vehicle drops. Typical car loan terms range from one year to seven years.
What is the best loan term for a car?
There is no easy answer to this question but the right answer should balance two competing needs: manageable monthly car loan payments and the overall cost of borrowing to finance a vehicle purchase. For that reason, the best term for a car loan is the shortest term with the best possible rate. This may not mean getting a car loan with the cheapest monthly payments, but it does mean finding a car and a car loan that you can realistically afford.
Costs and fees
When comparing car loans, remember to consider all the extra costs and fees. While some extra costs are specific to the type of vehicle others are associated with where you buy a car and the lender you choose.
For example, you may be required to pay a surtax on any import bought through a dealership. Plus, the dealership may add another cost to the overall purchase price because you upgraded from cloth to leather seats. Then you may be required to pay legal or appraisal fees when opening a car loan, or a discharge fee when you make your final payment.
These additional costs can add up and, if you’re not careful, significantly inflate the overall cost of your vehicle purchase.
To compare car loan costs—and find the best car loan—you first need to determine each lender’s annual percentage rate (APR).
The APR is the interest rate on the car loan plus any additional costs and fees associated with the loan. You can find the APR in the loan agreement — and keep in mind, that it’s usually higher than the advertised interest rate.
The APR is a more effective tool when comparing car loans as it reflects the actual cost you pay to buy the vehicle. To learn more, check out our primer on APR and how it impacts the cost of debt.
The top 3 car loan factors for Canadians in 2024
According to Finder’s Consumer Insights Survey January 2024, the three most important factors for Canadians when looking for a car loan were interest rate (61%), monthly payment (58%) and fees (39%).
And when we asked them which aspects of car buying they found most challenging, the top three most-selected aspects were negotiating the car price (43%), finding a seller they trusted (31%) and finding a car that met their requirements (31%).
9 types of car loans in Canada
To get the best car loan, not only do you need to compare auto finance features, but you need to determine the best type of car loan for your needs. First, consider the types of car loans available in Canada:
Secured car loan
Unsecured car loan
Fixed-rate car loan
Variable-rate car loan
No-money-down car loan
Bad credit car loan
Car loan refinancing
In-house financing
Lease buyout
To help you narrow down your options, here are the 12 best car loans in the Canadian marketplace, based on the type of loan, what each car loan is best for and where to find more details on these lenders and loans.
Secured car loan
Best for: Getting the lowest car loan rates
A secured car loan means the car – or other assets you own – is used as collateral to secure the loan. If you fail to repay the car loan, the lender has the legal right to claim ownership of the asset used as collateral and to sell that asset to repay the debt. The most common type of secured loan in Canada is a mortgage, but lenders also use secured car loans to help reduce the interest rate charged on the loan. Generally, the more secure and less risky a loan, the lower the interest rate. To learn more, read our guide on secured car loans.
Unsecured car loan
Best for: Older used cars
Lenders typically cannot accept older, used cars as collateral because they’ve already lost a lot of value. If you’re planning to buy a used car, you can apply for an unsecured car loan.
Fixed-rate car loan
Best for: Fixed budgets or large loans
A fixed-rate car loan means the lender uses one interest rate throughout the entire loan term, even if interest rates fluctuate.
The benefit of a fixed-rate car loan is that your monthly payments do not fluctuate — giving you predictable monthly loan repayment. The drawback of a fixed-rate car loan is that the interest rate charged is often higher than variable-rate loans.
Variable-rate car loan
Best for: Smaller loans or short loan terms
A variable-rate car loan uses an interest rate that fluctuates based on market conditions.
When negotiating a variable-rate car loan, you’ll be quoted an interest rate based on the lender’s prime rate, plus or minus based on market conditions, your credit score, your income and debt levels along with a few other factors.
When rates fall, the lender should pass on the savings to you, the borrower. However, if rates rise, the lender can either increase your monthly car payment or keep your payment the same, but more will go to paying down interest, not the principal debt.
No-money-down car loan
Best for: Those who are employed but have no savings
This type of car loan can be convenient since borrowers don’t have to use their own money as a down payment to purchase the vehicle but these loans usually come with higher costs. Most non-traditional loans, like no-money-down car loans, will have higher interest rates and many will have extra fees.
In general, it’s not wise to purchase a higher-value asset with no money down, unless you are confident that you can repay the loan. For instance, a new post-secondary graduate may consider this type of car loan if they just secured their first job and need a reliable set of wheels to get to and from work.
To understand whether or not this type of loan is best for you, read our guide on no-money-down car loans.
Bad credit car loan
Best for: People with bad credit (or those dealing with a prior bankruptcy)
When your credit history takes a beating, it can be discouraging to purchase larger ticket items, like a vehicle. But even if you have a bankruptcy in your credit history, you can still use a car loan to help rebuild your credit score and get a car.
The key is to consider auto financing from lenders that specialize in offering car loans to people with bad credit. These lenders are more accustomed to loan applications from people with a few dings against their credit history and can find ways to help you finance your purchase. By paying back the car loan on time, every month you also help to rebuild your credit history and improve your credit score. To learn more, read our guide on bad credit car loans.
Car loan refinancing
Best for: Getting a lower interest rate
In general, the best reason to refinance a car loan is to lower your monthly loan repayments and reduce the overall cost of this debt. Unfortunately, not everyone considering car loan refinancing is trying to take advantage of cheaper interest rates. Quite often, the reason for refinancing a car loan is the monthly payments are no longer affordable. In these circumstances, it’s best to consider all your options. To learn more read our guide on refinancing a car loan in Canada.
In-house financing
Best for: Easy, competitive financing through a dealership
In-house financing — car loans through a dealership — make sense for those eager for a quick and simple car buying process. Once you find the new or certified used car you want to purchase, you can discuss the financing terms with the dealer. However, before going to the dealership, consider getting car loan pre-approval so you have an idea of what financing you qualify for and have more negotiating power.
Lease buyout
Best for: Ready to drive your car long-term
It’s a good idea to consider a lease buyout if you are ready to drive a vehicle long-term and can determine whether or not the vehicle is worth buying.
Where can I find the best car loan in Canada?
To find the best car loan provider, first consider the four types of lenders who offer auto financing in Canada:
Major banks. Biggest brand recognition. Can be a good choice for people with excellent credit scores or low debt ratios.
Online car loan lenders. Convenient for online applicants or people who want fast funding or a quick answer. Can be a good choice for buyers with poor or fair credit scores.
Credit unions. Like big banks, credit unions offer car loans and are often best for buyers with good credit scores.
Dealerships. Good option if you can find a dealer selling a car you want and offering incentives, such as low-interest rate loans. Also a good option for those who hate comparison shopping.
To help narrow down your options, consider what type of loan you need and then approach the following lenders:
Type of car loan
Banks
Credit unions
Dealerships
Alternative lenders
Secured car loan
Yes
Yes
Yes
Yes
Unsecured car loan
Yes
Yes
—
Yes
Fixed-rate car loan
Yes
Yes
Yes
Yes
Variable-rate car loan
Yes
Yes
Yes
Yes
No-money-down car loan
Yes
Yes
Yes
Yes
Bad credit car loan
—
—
Yes
Yes
Car loan refinancing
Yes
Yes
—
Yes
In-house refinancing
—
—
Yes
—
Lease buy-out
Yes
Yes
Yes
Yes
Which bank is the best for car loans?
The best bank for car loans will depend on a few factors. For example, if you have a long-standing relationship with your bank, and have several other banking products in good standing with it already, you may have a better chance of approval with your current bank.
When looking at bank car loan interest rates, banks tend to offer the best rates and loan terms to customers with good to excellent credit scores. Learn more about car loan interest rates.
7 questions to ask when shopping for the best car loan in Canada
To find the best car loan for your needs — and improve your odds of qualifying for a car loan — answer the following seven questions:
Do I qualify for a car loan? All lenders have credit and income requirements but some are more lenient, others specialize in certain categories of borrowers (such as self-employed) and others only lend within certain provinces or for certain types of vehicles. Make sure you meet a lender’s qualifications before submitting a formal application since each loan request will be a hard hit against your credit score. You can find out the minimum credit score for a car loan or learn how credit scores work.
Is my car eligible? Will this lender provide a loan for the car you want to purchase? Some lenders have restrictions on the age or type of vehicle that can be financed, while others require proof of vehicle history. Confirm with your loan provider that you’ll be able to purchase the car you want before you apply.
How much can I borrow? The loan amount the lender offers you depends on a couple of factors. Your credit history and financial situation will be important, but for a secured car loan, the loan amount will ultimately depend on the car’s cost.
What type of car loan? It can be a loan for a new or used car, a low-interest car loan or loans for those with poor credit. You can even find loans that offer car loan pre-approval before you decide whether to accept the loan. Since all situations are different, look into all your options to determine which type of loan will benefit you the most.
Length of the car loan term? What are the loan terms? How long it takes you to pay off a car loan is known as the loan term. In Canada, most car loan terms range between one and seven years — although this is usually expressed in months, so 12 to 84 months. The longer the loan term, the lower your monthly payments but the higher your overall cost for your vehicle purchase.
Are payments flexible? Being able to skip a payment or make extra payments is a great way to manage debt and repay loans. However, some lenders are not in favour of these prepayment privileges. Find out if the lender will penalize you for repaying your car loan early, charge a fee if you make additional payments or choose to skip a payment (once and a while!).
What is the total cost of borrowing? Most of us focus on the loan amount and the interest rate — as these are the principal factors determining the monthly payments. But to get a true cost of borrowing you need to consider all costs, including add-ons, fees and taxes. A good place to start is to compare the APR of one lender to another. The APR factors in the interest cost and all other fees and helps you make a competitive assessment of the lender with the best loan and terms.
Compare the best car loans in Canada
What is the best car loan in Canada? Well, like all financial questions the answer depends on your situation and needs. To help, we’ve compiled a list of the best car loans in Canada, based on specific features. Use our list to help narrow down the option that’s right for you, or search our complete comparison tool and select the features that matter most to you.
Romana King was the Canada group editor at Finder and a personal finance expert. As an award-winning personal finance writer and real estate expert, she has spent almost two decades helping Canadians make smarter money management decisions. Her first book, House Poor No More: 9 Steps That Grow the Value of Your Home and Net Worth, launched in November 2021, continues to be an Amazon bestseller and won the Excellence in Financial Journalism Book Award in 2022. See full bio
Romana's expertise
Romana has written 35 Finder guides across topics including:
Leanne Escobal is a publisher for Finder. She has spent over 11 years working with financial products and services, specializing in content and marketing. Leanne has completed the Canadian securities course (CSC®) as well as the personal lending and mortgages course by the Canadian Securities Institute. She has a Bachelor of Arts (Honours) in English literature and creative writing from Western University. See full bio
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