Car loan rates in Canada range from 4.99% to 12%+ in 2026, depending on your credit score, vehicle age, and lender. Manufacturer promotions can drop as low as 0%. Here’s what to expect.
Current Car Loan Rates by Credit Score
Credit Score
New Car Rate
Used Car Rate
750+ (Excellent)
4.99–6.49%
5.99–7.99%
700–749 (Good)
5.99–7.99%
7.49–9.99%
650–699 (Fair)
7.99–10.99%
9.99–12.99%
Below 650 (Poor)
10.99–18.99%
12.99–24.99%
Monthly Payment Examples
New Car ($40,000, 5-year term)
Rate
Monthly Payment
Total Interest
0% (promo)
$667
$0
4.99%
$755
$5,274
6.99%
$792
$7,505
9.99%
$850
$10,976
Used Car ($25,000, 5-year term)
Rate
Monthly Payment
Total Interest
5.99%
$483
$3,998
7.99%
$507
$5,409
10.99%
$544
$7,634
14.99%
$594
$10,661
Where to Get a Car Loan
Source
Typical Rate
Pros
Cons
Manufacturer financing
0–6.99%
Lowest promos on new
Limited to new models
Bank/credit union
5.49–9.99%
Pre-approval, negotiating power
Requires good credit
Online (Canada Drives, Clutch)
4.99–14.99%
Convenient, fast
May be higher
Dealer financing
6.99–19.99%
One-stop shop
Often marked up
Subprime lender
10–29.99%
Approves bad credit
Very expensive
Tips to Get the Best Rate
Get pre-approved from your bank/credit union before visiting a dealer
Check your credit score — fix errors before applying
Choose a shorter term — 4–5 years vs. 7–8 years saves thousands
Consider certified pre-owned — nearly new, much cheaper
Avoid biweekly payment “deals” at dealerships (often just rounding tricks)
Put at least 10–20% down to reduce financed amount
Bottom Line
Car loan rates in Canada average 5–8% for good credit in 2026. The biggest savings come from getting pre-approved, choosing a shorter term (5 years max), and avoiding dealer markups. On a $40,000 vehicle, a 2% rate difference costs over $2,200 in extra interest.