There are many reasons why you would be in the market for a new vehicle. You could be a new driver, ready to embark on adventures in your sweet ride, or you could be upgrading now that all the kids are out of the house. Perhaps that old thing you bought 20 years ago is finally on its last legs.
Either way, most of us don't have the cash in our pocket to buy a vehicle outright; as a matter of fact, 85% of Canadian cars are financed. Getting a loan can be intimidating, and doing multiple credit checks will hurt your score.
Luckily, we have put together a list of the top Canadian car loans for you. You could have excellent credit, bad credit, o r no credit. There is something for everyone. Keep reading to find your perfect match.
Car loans come in all shapes and sizes. It can be overwhelming to look at all the options. Each situation is different, and car loans are definitely not a one-size-fits-all type of deal. That is why it is essential to do some research and find the best solution.
A good interest rate for a car in 2021 is 4%. The average interest rate for those who have decent credit is 4%-6%.
If your credit score is on the lower end of the spectrum, which is about 600, you will be looking at a higher interest rate. But here is the good news! Buying a car on loan can be really good for your credit, provided that you make your payments in time, of course.
You may pay more in the long run; however, it is a win-win since you are getting a new car and increasing your credit score!
Check out our piece on insurance costs in Ontario to help with your budget while looking for a car.
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TD Auto Finance Canada
TD Auto Finance Canada is an excellent choice for any car owner.
As a first-time car owner, you have great options to help you take this exciting first step. TD offers flexible terms for payments, such as bi-weekly or monthly payments, and early payments to pay off your car faster without a penalty. Make sure to budget appropriately, and keep in mind other expenses, such as insurance, gas, and parking fees.
If you are looking to buy your next car, you have the option of trading in your old vehicle. The net equity on your old car will be applied to the cost of the new car, giving you a smaller loan amount. You may even have a break in your taxes, as you will only pay taxes on the remaining cost.
TD Canada has an extensive dealership network and offers special rates for select manufacturers.
For your ease, there are several ways that you can apply for a loan. One of the most effective ways is to apply through a dealership once you have picked your new ride. In both Ottawa and Toronto alone, you will find ten dealerships that work with TD.
Additionally, you can download the TD Wheels app, where you can browse and compare makes and models, connect to dealerships, and choose the right financing plan for you.
To be approved for TD Auto Finance Canada, you will need a credit score of a minimal 600.
This is a good option for those who have a great credit score and are able to pay off their loan within eight years. TD does not offer a Payment Break for the rainy days in your future.
RBC Car Loan
The RBC offers many different choices for car loans. They even provide a handy Car Loan Calculator. It allows you to fill in the specifics of your vehicle. Such as the type of vehicle and the age of the car you are looking to purchase.
It also allows you to customize your loan, like the interest rate, the repayment period, and how often you would like to make payments, and of course, the amount you would like to borrow. This makes it easy to see if the car you are looking at will fit into your budget.
RBC offers flexible payment options, and you have the ability to choose your own terms; whether you want to take a year or two or spread the payments over eight years, you have a say in how the loan is repaid.
Depending on your prospective car's make, model, and age, RBC Car Loan offers competitive interest rates ranging between 3.99% and 9.99%. These are some of the lowest interest rates in Canada!
RBC accepts applications for car loans with a good (600) credit score or better. It is important to note that skipped loan payments will accumulate interest with the RBC Car Loan.
RBC also has an Auto Finance Program for newcomers. If you have recently immigrated and currently have zero credit, it is a good idea to go with RBC.
Scotiabank Car Loan
Scotiabank Car Loan is rated the #1 choice in Canada for financing. Let's discuss why that is!
Scotiabank partners with over 4,000 dealerships nationwide. This great benefit allows you to pick your dream car with loans up to $200,000!
They offer a unique feature called "Payment Breaks" where, once a year, you can postpone a payment. This is great for rainy days when an unexpected expense presents itself.
Much like the previous car loans we have discussed, Scotiabank allows you to increase your payment amount and pay off your loan early without any penalties.
An added benefit if you choose Scotiabank is that you can manage your loan online. Changing or skipping your payment can be done through your personal account anywhere and at anytime!
All of these great features make Scotiabank one of the top Canadian car loans. If you are looking to apply for a loan online, you may want to look at the following options.
Car Loans Canada
Car Loans Canada is a resource that connects you with hundreds of financial institutions to find you the best rate for your situation. The offer rates between 3.99% and 29.95%, depending on your income and credit score.
When applying to Car Loans Canada, it is important to note the requirements for approval. Your income should not be below $2,000 a month, while your credit rating should be above 300.
Car Loans Canada allows you to apply hassle-free online. There is no need to talk to different banks or other financial institutions. The application process only takes 5 minutes and you will receive a call from an agent as soon as possible.
Car Loans is the oldest platform in Canada that allows you to connect with different lenders. They have a fantastic reputation, and as many as a thousand applicants are approved every month.
The platform is not available in Quebec or the territories. If you have bad credit, you will notice that the rates are quite high.
Car Loans 411
Car Loans 411 is another platform that allows you to compare different lenders with just a few minutes online. Car Loans 411 pre-approves your application so that you do not run into any surprises once you have picked your car.
This particular platform works hard to find you the best lender, even if you have bad or no credit (300). They are great for those struggling to build their credit score or those who just arrived in Canada.
Car Loans 411 offers rates between 1.90%-19.99%, depending on your income and credit score. Keep in mind that each application is assessed individually.
The platform is rated with 4.3 stars on Google Reviews. Many customers are satisfied with their above-and-beyond attitude and their speedy approval process.
At Car Loans 411 you are required to make at least $1,600 a month. If you do not meet this requirement, you are better off looking at another platform.
Loan Connect offers same-day pre-approval with a five-minute application process. This platform is another great option if you wish to shop around for different lenders before going to a dealership.
They partner with financial institutions to offer a fixed rate between 9.90% and 46.96%. Unlike the other two platforms who will accept a score of 300, you will need a credit rate of 550 or higher to be approved.
They offer loans between $500 and $50,000 and there is no minimum income requirement to apply.
Many reviews state that the service provided by Loan Connect is quick and efficient. They offer excellent customer service and are happy to answer any questions or concerns.
They do have limited providers and the options are not great for those who have bad credit.
Are You Ready to Buy Your New Ride?
Getting a new car is exciting for any driver, whether this is your first car or an experienced driver with many years of driving under your belt. You can choose to upgrade, downgrade, or perhaps old faithful has finally given up.
At Insurdinary, we are ready to offer you any advice, such as who provides the top Canadian car loans and the rest of your most significant financial decisions. Don't forget to get a quote for insurance for your new ride!