Auto Loan Calculator
Calculate your monthly car payment, total interest, and true cost of ownership — including provincial sales tax, loan term comparison, and extra payment savings.
Loan Details
New car avg: 6–9% · Manufacturer 0% promos available
HST 13%
Auto Loans in Canada: What You Need to Know
An auto loan is one of the most common forms of consumer debt in Canada. Understanding how the loan is structured — and how taxes, interest rates, and term length affect your total cost — can save you thousands of dollars.
How Sales Tax Works on Vehicle Purchases
In Canada, sales tax is applied to the full vehicle purchase price before financing. In HST provinces (Ontario, Atlantic Canada), you pay a single harmonized tax. In other provinces, GST and PST are applied separately. Quebec applies GST + QST. Alberta, Yukon, Northwest Territories, and Nunavut only charge GST. This tax is typically financed as part of your loan unless paid upfront.
Shorter vs Longer Loan Terms
A longer loan term (72 or 84 months) lowers your monthly payment but dramatically increases the total interest paid. It also increases the risk of being "underwater" — owing more than the car is worth — since vehicles depreciate quickly. Most financial advisors recommend keeping auto loans to 60 months or less.
The True Cost of 0% Financing
Manufacturer 0% financing offers on new vehicles can be attractive, but they typically require forgoing a cash purchase rebate (often $2,000–$5,000). In many cases, taking the rebate and financing through a credit union or bank at a low rate results in a lower total cost than 0% with no rebate.
Trade-In Tips
In most Canadian provinces, trade-in value reduces the taxable purchase price of your new vehicle. For example, in Ontario, if you buy a $40,000 car and trade in a vehicle worth $10,000, you pay HST on $30,000 — saving $1,300 in tax versus a private sale. Always negotiate your trade-in and new car price separately to get the best deal on each.
How to Pay Off Your Loan Faster
Even a modest extra payment of $50–$100 per month can shave months off your loan and save hundreds in interest. Making bi-weekly payments instead of monthly effectively makes one extra monthly payment per year. Always confirm with your lender that extra payments are applied directly to principal.