Car loan interest rates in Canada run from about 5% to 8% for borrowers with excellent credit to 19% or more for those rebuilding their credit, with a legal maximum of 35% APR. Your own rate depends mostly on your credit score, the vehicle's age and the loan length; used car loan rates are usually higher than new.
Key takeaways
- Excellent credit: about 5% to 8%. Rebuilding credit: about 19% and up.
- Used car loan rates are usually a few points higher than new.
- The legal maximum on a consumer car loan is 35% APR.
- A lower rate on $30,000 over 72 months can save you $200+ a month.
Typical car loan rates by credit score
Rough guide, October 2026. Not an offer.
| Credit level | Score (approx.) | Typical rate (APR) |
|---|---|---|
| Excellent | 760 and up | About 5% to 8% |
| Good | 660 to 759 | About 7% to 12% |
| Fair | 560 to 659 | About 12% to 19% |
| Rebuilding | Below 560 | About 19% up to 35% |
Rough guide from published Canadian lender ranges, not an offer. Promotional 0% deals on new cars are separate. Reviewed quarterly.
These are ranges, not quotes. Two people with the same score can get different rates because of income, debt, the vehicle and the lender. The only way to know your rate is to apply; car loan pre-approval shows it without a hard credit check to start.
What the rate does to your payment
| Rate | Monthly payment | Total interest |
|---|---|---|
| 6.99% | $511.33 | $6,815 |
| 9.99% | $555.62 | $10,005 |
| 14.99% | $634.19 | $15,662 |
| 21.99% | $753.61 | $24,260 |
Before sales tax and fees. Examples only.
Going from 21.99% to 9.99% on the same loan saves about $200 a month and more than $14,000 in interest. That's why improving your credit, or adding a co-signer, matters more than almost anything else.
Try the car payment calculatorSee what your rate does to your payment, with tax and trade-in included.See the rate you actually qualify for
Takes about 2 minutes. No SIN needed to start and no hard credit check to see your options.
Used car loan rates vs new
Used car loan rates are usually a few points higher than new car rates. Lenders see more risk in older vehicles: they lose value, can need repairs and are harder to resell. Automakers also subsidize rates on new cars (including 0% financing deals), which they don't do on most used vehicles.
- Newer, lower-kilometre used vehicles usually get better rates than older ones.
- Many lenders cap the vehicle's age or kilometres, or shorten the term on older cars.
- Certified pre-owned vehicles sometimes get promotional rates from the automaker.
The five things that set your rate
- 1Your credit score and history. Missed payments, collections, a consumer proposal or bankruptcy raise rates; a long record of on-time payments lowers them.
- 2Your income and debt. Lenders compare your monthly debt payments with your income.
- 3The vehicle. Age, kilometres and price compared with its value all matter.
- 4The loan term. Longer terms (84 or 96 months) can carry higher rates and always cost more interest.
- 5Your down payment. Borrowing less than the car is worth lowers the lender's risk and your rate.
Loan length: 60 vs 72 vs 84 months
| Term | Monthly payment | Total interest |
|---|---|---|
| 60 months | $593.89 | $5,634 |
| 72 months | $511.33 | $6,815 |
| 84 months | $452.63 | $8,021 |
Same rate shown for comparison; longer terms are often priced higher.
A longer loan lowers the payment but adds interest and keeps you owing more than the car is worth for longer, which matters if you trade in early. Choose the shortest term whose payment fits your budget comfortably.
Interest rates and the Bank of Canada
The Bank of Canada held its policy rate at 2.25% at its September 2026 decision. That rate influences what banks pay to borrow, so it nudges car loan rates up or down over time, but your credit and the vehicle have a much bigger effect on your own rate. We review this page after each rate announcement.
The legal maximum: 35% APR
Since January 1, 2025, Canada's Criminal Code caps the interest on most consumer loans, including car loans, at 35% APR. If a quote is near that level, a larger down payment, a co-signer or a less expensive vehicle can bring it down. Lenders must also show you the APR and total cost of borrowing before you sign.
How to get the best car loan rate
- Check your credit report with Equifax and TransUnion for free and dispute any errors.
- Get pre-approved before you shop, so the rate isn't decided on the lot.
- Put money down and avoid rolling negative equity from your old loan into the new one.
- Pick the shortest term you can afford.
- If your credit is still recovering, take a sensible loan now, pay it on time, then find out how you can lower your interest rate in 12 to 24 months.
Get your real rate before you visit a dealer
Takes about 2 minutes. No SIN needed to start and no hard credit check to see your options.
Frequently asked questions
What is a good car loan interest rate in Canada?+
Why are used car loan rates higher?+
What is the highest interest rate allowed on a car loan in Canada?+
Does the Bank of Canada rate change my car loan rate?+
Can I get a lower rate later?+
Sources
- Loans Canada: Average car loan interest rate in Canada
- Bank of Canada: September 2026 rate announcement
- Stewart McKelvey: Canada's new criminal rate of interest
This guide is general information, not financial or legal advice. Rates and offers change; examples are estimates only and are not loan offers. ShopRides is a financing referral service and is not a lender.