Best Car Loan Rates in Canada

Best Car Loan Rates in Canada

Last Updated on March 31, 2021 by offerhub

Best Canadian Car Loans

It’s that time again when you need to decide where you will get your next car loan from for the new or used car you’re considering buying. Or is this your first car loan, and you have no idea where to start looking?

Unless you’re buying from a private seller, then the car dealership you are using to buy your new or used car will have financing options that they suggest you use – but we know that coming with your own pre-approved finance company will sweeten the pot in your favour!

But how do you know what best Canadian car loan is right for you? That’s where we come in! We’ve already done all the research for you and have created the list below to make your life easier when buying your next car!

Ready? Let’s dive in!

Providers Interest Rates Features
Car Loans Canada 0%-29.95% Fast pre-approval with $0 down
LoanConnect 4.6% – 46.96% Same-day approval &  No minimum credit checks
CarLoans411.ca N/A – assessed individually A down-payment is not required to qualify
Canada Auto Finance 4.9%-29.9% No co-signer or SIN required
Canada Drives 0%-30% Easy 2-minute application process and 350+ lenders

 

Top 5 Picks For The Best Canadian Car Loans


Car Loans Canada

When you need a fast answer on your loan acceptance, Car Loans Canada will give you a pre-approval within minutes and $0 down! With their huge network of lenders and car dealers, choosing your next vehicle has never been easier.

What You Need To Know:

  • Fixed Interest Rate (4.49% – 29.95%)
  • Terms Vary From 36 To 72 Months
  • Pre-Approved Financing Options On Select Vehicles
  • Will Work With Past Credit Problems And Bankruptcies

This is a great resource for wanting to see what all your options are from your local dealers!

Learn More

Loans Canada

Eligibility Requirements: 

  • Must be a permanent resident or citizen of Canada
  • Must be over the age of majority in your province
Get Approved Now!

LoanConnect

With no minimum credit requirements, this is perfect for people just starting out or anybody who hit a bump along the road and needs help to obtain the best Canadian car loan. This is also a great option if you need a cash loan to purchase your vehicle from a private owner.

What You Need To Know:

  • Interest Rates Vary (4.80% – 36.00%)
  • Terms Vary From 12 To 60 Months
  • Quick Application With Pre-Approvals
  • Receive Your Cash In As Little As 24 Hours Upon Approval

Keep in mind that Loan Connect’s lenders provide all types of loans, and the loan for auto lending is also paired with loans for motorcycles and boats – falling under the ‘Lifestyle Loans’ application category.


CarLoans411

If you’re a first-time car buyer or your credit isn’t exactly where you wanted it to be, then CarLoans411 is going to be your best bet – almost everybody gets approved! The interest rates will vary depending on your credit, so if you have decent to good credit, you can expect to get a better interest rate than a person with really bad credit.

What You Need To Know:

  • Variable Interest Rates
  • Terms Vary From 12 To 18 Months
  • Bankruptcy On Credit File Accepted
  • Secured And Unsecured Loans Available
  • No Credit Score Or Down Payment Requirement
  • Minimum Monthly Income of $1600 To Apply

The application process is quite simple and only takes a few minutes to fill out the initial application. There will be a credit check done, but almost all applicants qualify for some type of financing based on their score.


CanadaDrives.ca

The incredible structure of the application process is what makes this company stand out from all the rest. With a few questions answered, you will have all the info needed to make the best decision based on your needs.

What You Need To Know:

  • Interest Rates Vary (0.00% – 30.00%)
  • Terms Vary From 12 To 92 Months
  • Approvals Up To $75,000
  • Simple Online Interface With Inventory Page And Live Chat

The online tools will help you with trade-ins, budgets, and money down, plus take into consideration your credit score before presenting all your options. This is a great way to know everything up front before making any deals!


CanadaAutoFinance.ca

If obtaining your loan for your next car is something you want to do all by yourself, then Canada Auto Finance can help you do that with their no co-signer, $0 down, and no application fee loans (based on qualification). However; see all the conditions below.

What You Need To Know:

  • Interest Rates Vary (4.90% – 29.95%)
  • Terms Vary From 12 To 60 Months
  • No Co-Signer Needed Or SIN Required (Credit Score Of 625 Or Higher Needed)
  • Pre-Approved Financing Available
  • Refinance Current Vehicles
  • Approvals From $5,000 Up To $45,000
  • Proof Of Monthly Income ($1,500)

Regardless of your credit score, Canada Auto Finance can usually make you a fair offer for your next loan based on all your qualifications.


 

Best Car Loan Rates in Canada for 2020

Lender Fixed Interest Rate Variable Interest Rate
Car Loans Canada 0.00%–29.95% 3.95%–8.95%
CarLoans411 Varies Varies
LoanConnect 4.8%–36% 4.8%–36%
Loans Canada 0%–46.96% Undisclosed

Everything You Need To Know Before Getting Your Next Car Loan

There a few things to take into consideration when getting the best Canadian car loan and we want you to be up to date on all the terminology so you can make a well-informed decision for your next car loan.

Here are some of the specifics you will want to be knowledgeable about:

Interest Rate – This is normally determined by your credit score and income, the better these two are – the better interest rate you can expect to receive. However; this can vary drastically based on your credit profile and or the lender, so be sure to check out all your options before locking in your interest rate.

Term – This will determine how many months or years you will have to repay your loan. These also vary and can fall anywhere between 1 and 8 years, but the norm is usually 4 to 5 years on new cars and 2 to 4 years on used cars. The longer the term, the smaller the payment – but this will also have you making payments for a long time.

So be sure to weigh out if a smaller payment is worth the longer period you will owe. This can result in negative equity in your car, which means you will owe more on your car than it is actually worth.

Principal – People easily underestimate the importance of the principal of your loan and that can cost you hundreds in additional costs. Once you agree on any extra options or add-ons, the principal is the total price with everything calculated in.

Note: By asking your lender if you can pay extra monthly that is applied directly to your principal is a great way to reduce the amount of interest you end up paying. But, not all lenders allow the principal to be paid down without interest.

Should You Finance, Lease, Or Pay Cash?

Let’s look at all three of these options in more detail so that you know what would work best for you and your budget.

When Leasing Is A Good Option

The first thing you need to know about leasing is that you don’t really own the car, you’re basically renting it. So remember after making all those payments, you won’t have anything to show for your money.

Then why would anybody lease a car? The simple answer, to get more bang for your buck! You might not be able to afford to buy that BMW X5, but if you lease it – the monthly payments are quite reasonable!

Another reason people lease is because they can get a new vehicle every year or two without taking a huge hit on the depreciation of the vehicle. Keep mind that leased vehicles usually come with mileage restrictions – so if you travel a lot, leasing might not be the best option for you.

Financing Your Next Car

If you want to keep your car for a long time and enjoy the ownership of having something to show for all the payments you made – then financing is probably the best way to go. Plus, you never have to worry about going over your mileage or that little ping from a grocery cart! (Leasing companies charge you for all those little pings or scratches!)

Financing your car is a great way to work on improving your credit score – just make sure that you choose a monthly payment that fits your budget, and you make all your monthly payments on time.

You can also deck your car out any way you want with customizations – which you cannot do when leasing!

Should You Pay Cash For Your Vehicle?

When paying cash for a vehicle, you have the upper hand in the negotiations because your finances can’t be used against you. It’s just your cash and the salesman’s ability to make the best offer. There are two categories to review when paying cash for your next vehicle:

Direct Cash – Money you have saved up and can be used for buying your next car loan free.

Borrowed Cash – Money you acquired through a loan before negotiating the price of your next car.

If you have the cash to spend and your credit report is already in great shape, then this is definitely the way to go because it can save you hundreds, even thousands in interest fees.

But if you need to work on improving your credit score, then borrowing the cash from a lender not affiliated with the car dealership is a great way to negotiate the best price and work on building your credit score!

Conclusion

Just knowing all your options before getting the Best Canadian Car Loan puts you one step ahead of the car dealership. Knowledge is a powerful tool!

 

 

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