New Car Loan Rates in Canada
New car loan rates in Canada start as low as 5.99% for excellent credit. Here's what to expect by score and how to get the best new car rate.
New car loan rates in Canada are the lowest you can get, thanks to manufacturer-subsidized financing. If you have good credit, you can qualify for rates as low as 5.99% — sometimes even 0% on select models during promotions.
Current New Car Loan Rate Ranges
| Credit Score | New Car Rate |
|---|---|
| 750+ | 5.99%–8.99% |
| 650–749 | 8.99%–12.99% |
| 550–649 | 14%–20% |
| Below 550 | 20%–29% |
Manufacturer Promotional Rates
Car manufacturers sometimes offer promotional rates through their captive finance companies (e.g., Toyota Financial Services, Honda Financial):
- 0% financing — Available on select models, usually requires excellent credit (700+)
- 1.99%–3.99% — Common promotional rates on slower-selling models
- 4.99%–5.99% — Standard promotional rates
These promotional rates are often only available for shorter terms (24–48 months). Longer terms (72–84 months) typically carry standard rates.
Manufacturer vs Bank Financing
| Manufacturer Financing | Bank Financing | |
|---|---|---|
| Rates | Lowest (sometimes 0%) | Moderate |
| Term flexibility | Limited (often 48mo max for promos) | Flexible |
| Cash rebates | May forfeit rebate for low rate | Can combine rebate with bank rate |
| Approval | Stricter credit requirements | More flexible |
Sometimes you have to choose between a cash rebate and a promotional rate. Do the math — a $2,000 rebate with a 6% bank loan can be cheaper than 0% financing with no rebate.
How to Get the Best New Car Rate
- Check your credit first — You need 700+ for the best promotional rates. Use our Credit Score & Rate Tool to see where you stand.
- Compare manufacturer and bank offers — Don't assume the dealer's rate is the best
- Negotiate the price first, then the rate — Don't let a low rate mask an inflated price
- Consider the rebate vs rate trade-off — Calculate which saves more
- Get pre-qualified — Know your rate before you walk into the dealership
New vs Used: Which Is Better?
A new car has a lower rate but a higher price. A used car has a higher rate but a lower price. See our used car loan rates comparison for the full breakdown.
The key trade-off: new cars lose 20–30% of their value in the first year, while used cars have already taken that hit.
The Bottom Line
New car rates are the lowest available, but the higher purchase price and faster depreciation can make a used car the better financial choice. Get pre-qualified to see your actual rate, and use our Car Payment Calculator to compare new vs used payments.
Affordrive is a Canadian vehicle-shopping and financing-information platform designed to help consumers understand their options before connecting with a dealership.
Affordrive does not guarantee financing approval. Financing decisions, rates, terms and vehicle availability are determined by the applicable lender and dealership.
Information on this page is for educational purposes and should not be considered financial advice. Read how we write and update our guides and how Affordrive makes money.