Best Car Loans in Canada for a Supreme Driving Experience in 2024

It is difficult to determine the best car loan for you with so many options on the market, right?

To simplify things, we’ve compiled a list of the best car loans in Canada, based on interest rates, terms, and other crucial factors.

Let’s check it out!

A Glimpse of The Best Car Loans in Canada

10 Best Car Loans in Canada

Here’s our list of auto loans in Canada to help you find the cheapest car finance that fits your needs.

1. Loans Canada

This 2012 loan search platform helps people from Canada to find the right lender. That said, so far, they’ve gained the trust of more than one million Canadians.

So, if you’re fighting off a bad financial situation, have a bad credit score, or just trying to get back on track after a rough bankruptcy – you’d like to turn to the best automobile loan provider in the country, i.e., Loans Canada.

But, still, it’s good to remember that Loans Canada isn’t a direct lending institution; instead, it matches suitable borrowers with online lenders across the country.

So if you need to purchase a car, head to their site and check out the car financing they offer for new and used vehicles. Additionally, you’ll find them offering: refinancing, auto repair finances, and car title loans.

Once you choose a loan, you can start the application procedure, which doesn’t last longer than five minutes.

Pros:

• Free credit score reports
• Large loan variety
• Easy online application

Cons:

• Higher interest for bad credit borrowers
• Origination fees by some lenders

2. LoanConnect

LoanConnect is another online loan search engine that allows you to search multiple car loan providers through one application. They have rates starting at 4.99%.

That said, you can count on LoanConnect getting you various loan offers, including a car loan, in as little as a minute (as stated on their site).

What’s more, no matter your credit score, the service is renowned for assisting Canadians in finding low-rate loans of up to $50K.

Additionally, you can browse secured and unsecured loans from many lenders. And, with a network of lenders like theirs, you can easily qualify for the following loans for cars:

• new/ used car loans,
• lease buyouts,
• and auto refinancing loans.

According to numerous users, LoanConnect’s platform is simple and convenient for online use and in as much as five minutes, you’ll be done with the entire application procedure.

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3. Car Loans Canada

With 11.500+ approvals a month and 1.6+ million Canadians served, Car Loans Canada has a well-deserved place in our top ten picks of online vehicle providers.

And, since Car Loans Canada is a loan connector, they don’t provide the loans BUT will use your info to connect you with an appropriate lender. To do so, they have a broad base of lenders available around nine Canadian provinces.

However, if you’re afraid that a bad credit score might ruin your chances with Car Loans Canada – don’t be!

Why? Because the majority of their approvals (more than 50%) are people with poor to bad credit. After all, the most convenient thing about this loan platform is that you can get pre-approved for bad credit in just a few minutes.

In case you’re unsure about your overall credit history, Car Loans Canada has you covered. They work with some of the most reputable credit-report agencies, like Equifax and TransUnion.

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4. goPeer

The peer-to-peer lender headquartered in Toronto, goPeer, facilitates loans for creditworthy borrowers by connecting them with investors. In brief, they provide Canadians with a new borrowing environment where they can lend and borrow money.

How’s this done? By financing all, or a portion of the loans that borrowers seek, investors take on the role of the lender.

goPeer is a definite plus in which the investors earn from the interest paid by the borrowers on the original amount borrowed while the borrowers receive the funds they need.

So, if you apply for a peer-to-peer loan through them, ensure your budget is intact and you have enough savings.

The platform is user-friendly, and you only need a simple registration on goPeer’s site. You can submit it entirely online from the convenience of your home in a couple of minutes.

Afterward, follow their instructions, and you’ll receive one of Canada’s lowest auto loan rates.

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5. Royal Bank of Canada

Royal Bank of Canada (RBC) is a Montreal-based bank with the longest years of operation. And it’s where people turn to when in need of car loans with competitive rates and repayment terms.

The bank offers fixed-rate or variable interest contracts and weekly payments – you can make them every two weeks, etc. (depending on your preference).

Furthermore, shorter-term plans are available up until eight years in length — all this without any prepayment penalties if you decide to pay off early.

And let’s not forget the rich offer of loans for many vehicle types:

• new/ pre-owned vehicles,
• electric vehicles,
• new/ pre-owned VR and marine vehicles.

Plus, they offer something new and competitive — a loan offer for newcomers to Canada, which can be of great help.

If you’re doubtful about the amount of money you can get for the car you want, go to RBC My Auto Affordability and find out in only a few steps.

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6. CarsFast by LendingArch

CarsFast, it’s an online comparison tool that lets you obtain financing choices for your auto loan. You can use its free services to compare rates from lenders who have pre-approved you by submitting an application and viewing automobiles for sale from 15.000+ dealers.

This certainly explains the broad client base of 350.000+ verified consumers in Canada; plus, the 350 dealership connections you can count on to get an auto loan.

And that’s not all. You’ll be glad to hear you are connected with a loan comparison platform listed among the top growing businesses in The Globe and Mail’s 2020 Report on Business.

So, take the opportunity and apply for the following car loans: new/ pre-owned car loans, bad credit car loans, and trade-ins. However, there are no private auto loans or lease buyouts.

Additionally, applying for a loan with them will only take two minutes of your time to complete and submit.

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7. Scotiabank

Scotiabank is one of Canada’s largest banks that provides attractive interest rates readily and is widely accessible. Therefore, you can purchase a new/ used car through one of their many dealerships in Canada.

Additionally, you can select a car loan that you can pay off in up to 8 years, with a fixed/ variable interest rate and a flexible payment plan.

However, even though you can’t apply for a Scotiabank car loan online, you can visit one of the 4.000+ dealerships to find out what deals they’ll offer you.

But, before going into any dealership, ensure they’re pre-approved by other lenders first.

Consequently, since they don’t specify any qualifying restrictions, you can find out more when you contact the bank or go to a vehicle dealership that accepts Scotiabank financing.

Ultimately, you can also take advantage of their StartRight auto finance program that enables newcomers to get an auto loan of up to $75K.

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8. Canadian Imperial Bank of Commerce (CIBC)

CIBC has been a global banking and financial service provider since 1961. One of the best things is that they offer auto loans with flexible terms and low rates to assist you in purchasing a new/ used vehicle.

The interest rates for CIBC’s auto loans aren’t listed on their webpage. However, you’ll receive comprehensive price information once you apply with them.

Also, they offer a vehicle loan calculator that helps determine how much you can borrow and assess your financing alternatives. You only need to modify the loan duration and interest rate to easily calculate monthly payments and the total amount of interest paid.

Finally, to get a CIBC personal car loan, you can apply online or visit one of their 3.200+ dealerships.

You can also look up their special green vehicle loans, which work toward free carbon offset and gas bill reduction.

Additionally, the online application with CIBC won’t take more than just a few minutes.

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9. The Bank of Montreal (BMO)

BMO is a Montreal-based bank regarded as one of the safest financial firms and among Canada’s oldest banks (since 1817).

Therefore, a BMO vehicle loan is worth considering when you need money for an automobile (new or used), especially if you have a good credit score and already bank with them.

Additionally, you’ll enjoy competitive interest rates and flexible payments with this bank, + there aren’t penalty charges if you want to prepay your loan.

However, before applying for a BMO car loan, one should visit a dealership and proceed with the application – right on the spot.

Or on the contrary, those who want to avoid dealing with a dealership can do so. For that purpose, arrange a meeting with a BMO representative and choose between a line of credit or a personal loan.

Finally, their detailed website will guide you through the process. In the meantime, remember that you can’t apply online for a BMO car loan.

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10. Desjardins

The Desjardins Group, the biggest federation of credit unions in North America, is a significant provider of financial services. This credit union is known for providing affordable rates and adaptable payment arrangements; hence, people may quickly get a Desjardins auto loan via dealerships.

But what sets Desajrdins apart as a lender? Briefly, the variety of choices they offer + they usually finance up to 100 percent of your purchase.

That said, you should look up their three primary car loans:

• Desjardins auto loan,
• Desjardins leisure vehicle loan,
• and Auto+ Loan.

For instance, the Auto+ loan is excellent for vehicles, including motorbikes, snowmobiles, trailers, and RVs.

Consequently, you can utilize the loan to purchase a new/ used car costing at least $12.500 and take advantage of loan terms between 6 months to 20 years.

To be eligible for a Desjardins loan, you’ll have to be a credit union member.

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Best Car Loans: A Buyer’s Guide

This buyer’s guide is to understand better the process of getting a car loan and what to pay attention to.

What Are Car Loans? Why Do We Need Them?

Whether we’re referring to a new or used automobile, a car loan will help you purchase it – given that you don’t have immediate cash.

That said, receiving a car loan is borrowing money – a lender lends you money to buy a car. When accepting it, you consent to repay the money over a predetermined time (monthly installments) + any associated fees.

Considering today’s rise in car prices – no wonder we need a car loan to afford a new or used vehicle.

For instance, the current median cost for a new car in Canada is $45.000+. And, if you’re considering buying a used one, you’ll need at least $25.000. Nevertheless, these figures change depending on the vehicle you’re interested in.

Therefore, find a dealership that offers low-interest rates and competitive prices to purchase the car you want.

Tip: You can also refinance a car loan in Canada — replace your old loan with a new one BUT under new terms.

How To Find The Best Car Loan Deals in Canada?

To get the best car loan deals in Canada, you need to shop around, compare, and evaluate different lenders’ offers.

These are the essentials to look for when choosing a car loan deal:

Dealerships

Dealerships have connections with numerous lenders; hence, they can offer various rates to you.

Many also offer in-house financing, which can be an excellent option if you have good credit. Additionally, they might offer promotional rates or discounts on certain car loans.

Banks and Credit Unions

Banks and credit unions offer competitive rates on car loans. Before deciding on anything, look around and compare the interest rate, fees, and terms and conditions.

Online Brokers

Online brokers are a convenient way to look for car loans from multiple lenders. Since they have access to a wide range of lenders, comparing rates and terms to find the best deal is pretty quick.

Note: Before making a decision, perform a proper comparison of the fees associated with each loan.

How Do Lenders Determine Your Interest Rate?

The following are the most critical factors for lenders to determine a client’s interest rate:

Income

Lenders typically look at your income to decide what interest rate to charge you. However, this is also done to see whether you can repay them in the first place.

Loan Term

It usually ranges from 36 to 84 months. The most common loan term is 72 months/ 6 years. And mind that the length of your loan also affects your interest rate.

For example, shorter loans tend to have lower interest rates than long-term loans. However, short loans also come with high monthly payments.

The Vehicle

Higher-priced vehicles come with higher interest rates compared to low-priced vehicles.

When purchasing a car via a dealership – they’ll take care of passing on the car’s info for you. However, if talking about a private seller, here’s what you’ll need: price, VIN (Vehicle Identification Number), model, and year made.

Credit Score

Your credit score is the key to determining your interest rate. As we said, your interest rate will be lower if your credit score is higher.

Type of Interest Rate

There are two primary interest rate types: fixed – stays the same throughout the loan, and variable – tends to be lower than fixed interest rates but can increase over time.

Can I Get 0% Financing On a Car Loan?

Yes, 0% car financing in Canada is possible. However, it requires excellent credit.

Car loans with 0% interest are usually reserved for borrowers with the best credit scores, and the same applies to new cars.

However, even with good or average credit, you might still get 0% financing – but it will likely come with some strings attached. For instance, you may need to make a larger down payment or sign up for a shorter loan.

Tips To Get The Best Car Loan Interest Rates in Canada

Follow these tips to get the best car loan interest rates:

Know Your Credit Score

Your credit score is one of the most significant factors lenders look at when deciding about your interest rate.

For example, a great credit score for a car loan in Canada is from 630 to 650. If it happens to be under 630 – you’ll still be eligible for one.

Compare Deals

Don’t accept the first loan offer you’ve been suggested. Go and compare rates from different lenders before making up your mind.

Get Pre-approved Before you Visit the Dealership

Many dealerships will try and offer you a higher interest rate than you could get elsewhere. Getting pre-approved for a loan from a bank/ credit union can help you know what interest rate to expect + it’ll save you money.

Take the Overall Cost into Consideration

Always look at the total cost of the loan, NOT just the interest rate. Some lenders charge higher fees or have shorter terms, which can cost you more in the long run.

Don’t Take the First Deal you Find

Just because a lender offers you a low-interest rate doesn’t mean it’s the best deal. Ensure to compare rates from multiple lenders before deciding.

Be Willing to Negotiate

Don’t be afraid to negotiate, especially with lenders. And, if you have a good credit score, you’re certainly eligible to get a lower interest rate – ask for it.

Wrapping Up

Finding the best car loans in Canada requires many factors to be considered before finally opting for a certain car loan. Luckily, we’ve categorized and enlisted our in-depth research on the subject, making it easier for you.

So, before making a final decision, look at our list of top providers, and we’re confident that you’ll find the best lender in the country among them.

Don’t waste any time – get your dream car!