Auto Loans British Columbia

An average of about 15,000 new vehicles are purchased in British Columbia every month; add to this the plentiful supply of used cars, and you have an extremely active, multi-billion dollar market. So it’s no surprise that auto loans are both popular and plentiful; anyone looking to buy a vehicle, used or new, can benefit from easy access to affordable car loans.

How to Compare Car Loans in British Columbia

With so many options, picking the best option to finance your vehicle purchase can be tricky. We’re here to help. Smarter Loans has compiled a list of reputable B.C. lenders that offer auto loans online. These companies all have competitive terms, easy application processes, and can get you approved in minutes – allowing you to access auto financing with minimal fuss, even if you have bad credit.

Simply review the table below to compare your financing options. You can read the page below for more on car loans in British Columbia. And once you’ve decided which B.C. vehicle loan is best for you, click on “Apply Now” to proceed. Or, pre-apply for an auto loan with Smarter Loans; we will connect you to the auto loan best suited to your specific needs.

Quick Links

  1. How Does Car Financing Work in British Columbia
  2. How To Get Approved for a Car Loan in British Columbia
  3. Car Loans for Electric Vehicles
  4. Current Auto Loan Interest Rates in British Columbia
  5. Important Considerations When Borrowing Money for a Car
  6. Useful Resources for British Columbia Car Buyers
  7. British Columbia Car Loans FAQs

How Does Car Financing Work in British Columbia

Chart showing vehicle registrations in B.C. over time, by vehicle type.

British Columbia has no shortage of car loans, car dealerships, and used car options. But all this choice doesn’t mean buying a car is easy; there are always challenges to overcome, some financial, some logistical. The first you’ll face is financing. After your home, your car is likely the most expensive thing you will ever purchase, and very few have enough cash to completely cover the cost of a new vehicle. In fact, only 14% of vehicle purchases in Canada are with cash. This inevitably leads to considering the various car loans on offer, and these fall into several broad categories:

Car Loans from Dealerships

Chart showing B.C.'s most popular cars.

One very popular route is to finance a car through a loan arranged with the car dealer. The majority of car dealers will do this on your behalf. In fact, if buying a car directly from a manufacturer, the dealership will often have its very own financing division that provides loans to its customers at preferential rates.

Car Loans from a Bank or Credit Union

Graphic showing top 10 banks in Canada.

If the manufacturer can’t finance a loan, they can usually still help you get one from a credit union, bank or alternative lender. They may also work with other auto financing companies that offer specialized loans for the dealer’s clients.

Car Loans from Alternative Lenders

And finally, you may choose to get a car loan by yourself – shopping around to find the best lender. This route means you can compare the full details of a variety of car loans. You may in the end get cash from a new or used car dealer, your bank or credit union, or from an alternative lender, such as an online lender or specialty lender.

No Matter the Source, All Car Loans Work in the Same Way

Graph showing number of passenger vehicles in B.C. by area.

However you choose to finance your car, it will almost certainly work in the same way. An application form must be filled out, and assessed by the lender. If approved, the loan will be secured against the vehicle in question, so if there are ever any issues with your loan, the vehicle may be seized. An initial lump sum will be provided to cover the cost of the car, and then regular repayments must be made, over the life of the loan, until you completely pay off your loan.

How To Get Approved for a Car Loan in British Columbia

Chart showing preferences for new vs. used cars across provinces.

To get approved for a car loan in British Columbia, you must submit a loan application to your chosen lender. You can do this yourself, or have your local dealer do it for you. Either way, you will need to prepare some paperwork, including:

  • I.D. showing you are at least 19 years old
  • Proof of address
  • Proof of income (such as pay stubs)

Most auto loan providers will also want to perform a credit check to determine if you qualify for an auto loan with them. Once approved, then they will determine the interest rate you pay using your credit score. If you are not approved, you will have to pursue other finance options.

Car Loan Eligibility in British Columbia

There are plenty of myths about car loans in Canada; many people believe that you won’t be approved for a car loan if:

  1. You are self-employed
  2. You don’t have credit
  3. You have bad credit

But the facts are:

  1. If you’re self-employed, you just need to provide evidence of income
  2. A lack of credit history can make it hard to be approved for some car loans, but not all; there are plenty of providers that rely on proof of income over credit score
  3. The Financial Consumer Agency of Canada reports that one quarter of all auto financing options are subprime, meaning that even those with bad credit are getting approved for car loans

How To Get a Car Loan with Bad Credit in British Columbia

Chart showing credit scores in B.C. cities.

Getting a car loan in British Columbia isn’t necessarily hard, but if you have a low credit score, there are some dealers, banks and other lenders that may not be able to help you with financing. This is because vehicle financing works in the same way as many other types of loans – lenders use a person’s credit score to assess whether they want to do business with them, and some lenders (like banks) have stricter criteria than others. If you do not meet these criteria, you won’t be approved for a loan from them.

So if your credit score is below the national average of 650, and veering into bad credit territory, you’ll probably have to consider a bad credit loan. Luckily, there are a multitude of lenders that offer these products; even with absolutely no credit report at all, you will still be able to get a car loan. Just bear in mind that the most competitive interest rates are usually reserved for those with the highest credit scores, so you may end up with a higher monthly payment overall.

Other Routes to Car Loan Approval

If you have bad credit, no credit, or are simply looking for ways to reduce your monthly payment, you may want to to consider methods to make yourself a more attractive borrower and lower your costs, such as:

  • Part exchanging an old car to lower the loan amount
  • Getting a co-signer for the loan
  • Saving up a deposit to lower the loan amount
  • Providing some other form of collateral

Car Loans for Electric Vehicles

Chart showing number of new ZEV registrations by province in 2023.

Getting loans in British Columbia for electric vehicles is really no different than getting loans for any other type of vehicle. Nearly one in five of all new vehicles registered in B.C. is an electric vehicle – the highest percentage of any province. As with all other B.C. auto loans, you can compare lenders and find the best annual percentage rate and terms for your needs and the vehicle’s purchase price.

Current Auto Loan Interest Rates in British Columbia

Graph showing average car payments over time.

The interest rate you pay on your car loan will depend on your credit score, the details of the car you’re buying, and other financial factors. You can typically expect to pay less interest if buying a new car. Rates can vary quite widely; the general range is between 3% and 10%, although some special offers from manufacturers boast 0% for an initial period, and some borrowers will end up paying as much as 30%.

You won’t know what interest rate you’ll get until you start the loan application process, but to put things into some context: the average APR on new auto loans is now 8.19%, meaning the average brand-new car costs around $1,091 per month to finance over an eight-year term. The better your credit score, the more likely it is you’ll qualify for the lowest rates.

Important Considerations When Borrowing Money for a Car

When you apply for a car loan, keep the following factors in mind:

Total Cost

The average price for a new vehicle in Canada is $66,979, and a used vehicle $38,451. But in British Columbia these numbers are quite a bit higher than the national average; for example, the average used car price in B.C. is $43,946. This may be because electric vehicles are more popular in B.C., and tend to be more expensive, or it may be because there is more demand in the B.C. market. Whatever the cause, it means that locals may have to borrow more than expected to secure their purchase, and this should be considered right from the get-go, as it will impact your budget. Canadian consumers have an average balance of $26,987 in auto loans.


The annual percentage rate, or APR, also must be considered. This is especially true of older cars. While used vehicles are cheaper than new ones in terms of sticker price, loans on used vehicles have higher interest rates. So take into account the cost of interest when considering different loans in British Columbia. Don’t forget that interest compounds: the longer the loan term is, the more you’ll pay in interest.

Chart showing average car price in Canada by body style.

Day-To-Day Finances

Monthly payments for a car loan will affect your ability to make other regular payments, like rent and utility bills, and will stretch your daily finances. You must factor in this additional expense before you take out a car loan. Do whatever you can to lower the loan amount and save on monthly payments; consider a trade in, a down payment, or other mitigating factors to ensure you can pay off your loan.

Chart showing cost of owning a car by expense type.

Car Insurance

Basic insurance is mandatory for all motorists in B.C., and this can be one of the most expensive aspects of owning a vehicle. Most people choose to pay for their insurance monthly, to spread out the cost, but you must ensure that you factor this amount into your calculations when considering how much you can afford to pay monthly for the car you want.

Chart showing average insurance premiums by province.

Loan Term

Nearly half of new car loans are taken for amortization periods exceeding 60 months. Long amortization helps fuel car sales in Canada, but as mentioned above, the longer your loan term, the more you will pay in interest over the life of the loan. You must balance the loan payments, total interest cost, and longevity of the vehicle when considering the loan term.

Chart showing distribution of auto loan terms.


Chart showing average monthly lease payment in Canada.

Just over 12% of new vehicles in Canada in 2023 were accessed via lease – a once popular alternative to buying that has seen a decline as interest rates have risen. A lease program only requires you to pay a small down payment for a portion of the vehicle’s value – or to trade in an existing vehicle as a down payment towards the new vehicle lease. You then make monthly payments as with a car loan. The downside to a lease is that you won’t actually own the vehicle you lease.

Leasing can be a viable option for those unwilling to commit to a new purchase, those seeking fast approvals, those unsure of their needs, or those who only need a car for a short time. Just keep an eye on the lease term to ensure it aligns with your intended use of the car and your required car payments.

Your Rights as a British Columbia Resident

Chart showing new vehicle registrations in B.C. by fuel type.

Purchasing a vehicle from a licensed dealer in British Columbia means you are protected by the Motor Dealer Act. A dealer is obliged to disclose the full history of the vehicle and its condition, including:

  • Age
  • Make
  • Model
  • Mileage
  • The cost of a vehicle

Should they fail to do so, you can complain to the Vehicle Sales Authority of B.C. You may want to read up on your rights as a B.C. purchaser for general information purposes, as knowing the law can help keep you safe in many ways.

Useful Resources for British Columbia Car Buyers

Chart showing average car loan amount across Canada.

Smarter Loans is your primary source for auto loan providers in British Columbia; let us help you find financing for your next vehicle. Review our list of auto loan companies above to compare current car loan rates, or to try a car loan calculator.

British Columbia Car Loans FAQs

How do auto loans work in British Columbia?

Car financing starts with choosing between BC auto loans from financial institutions, or vehicle financing through a dealership. Understanding the financing options available, including for electric cars, used vehicles and recreational vehicles, allows borrowers to select the best financing solutions for their needs.

To get behind the wheel of your next vehicle with favourable financing terms, you need to understand the loan amount, approval processes, and how the loan affects your financial situation. The loan term and rates of interest are also key features of any car purchase and financing plan. Financing options in British Columbia cater to a range of needs, ensuring borrowers find solutions that match their budget and allow them to purchase their car.

What is a good interest rate on a car loan?

The interest rate on a car loan in British Columbia depends on multiple factors, including the borrower’s financial situation, credit score, income, and the car’s details. Rates as low as 2-3% are possible with good credit. Seeking out financing options with the lowest interest rates can significantly reduce payments and the overall cost of your vehicle. Whether through a dealership, financial institution or auto finance company, ensure that you can secure a payment plan that fits your budget. And remember that you don’t have to go anywhere to access BC auto loans with good rates; many finance options allow you to apply online and be approved quite quickly, even if you have bad credit.

How do I choose the best lender for BC auto loans?

The best lender for a car loan depends on your situation. Different financial institutions provide auto loans with different rates for different people, and varying product types. To complicate things further, many companies offer special financing rates at certain times of the year or for certain people – meaning that when you choose to borrow cash can have a surprisingly big impact.

Start by looking for a lender that offers a loan that is suitable for your needs and situation. For example, if you have bad credit, you will want to focus on BC auto loans that don’t rely on credit score. Then check them for competitive rates and reasonable fees. Keep an eye open for hidden fees, as not only does this increase your cost, it’s a sign of a disreputable lender. Credit unions are often lauded for their customer-friendly terms and competitive rates, making them an attractive option for potential borrowers. And remember that a car loan is not necessarily your only option; a personal loan can provide the money you need, and may be a more flexible option for you.

Which bank or credit union has the best car loan rates in British Columbia?

When searching for the best rates in Canada, it’s crucial to compare car loans from banks and credit unions, and from dealerships and online companies – preferably by using a car loan calculator. Finance rates can vary significantly, so exploring a loan online is essential. Credit unions often provide competitive rates alongside flexible payment options, making them strong contenders. They don’t however often offer BC auto loans for bad credit borrowers.

So for the best deal, consider a lender offering competitive rates with minimal fees. The finance terms, including the loan’s total cost, should align with your budget and monetary situation. And remember that getting a competitive rate is key to the viability of your finance plan; approval may seem all-important, but a loan is no good to you if you can’t repay the cash you borrow – this will only lead to a bad credit score.

Can I get a loan for a used car in British Columbia at a local dealership?

Yes, your dealer or local dealership can usually get you financing for a used car. However, used car financing will cost you more in interest; used car rates start at around 5%, but can climb as high as 30% in extreme cases.

Can I make a lump sum payment towards my car loan?

Yes. Lump sum payments are a great way to lower your monthly payment and pay off your car loan early. Just remember to check whether the lender you are considering has any early payment fees that may impact you.

Many people choose to focus their ‘lump sum’ efforts at the start of their car purchase, usually via a trade in or large down payment. This minimizes the interest paid, but really any extra payment towards your debt will help you in the long term, either by allowing you to close your loan early, or to reduce your monthly repayments.

Can I get BC auto loans online?

Yes. Car loans are readily available online; this is an especially good option if you are buying your first car and don’t know what to expect, as it allows you to do a lot of research before committing to anything. All of your financing options will be clearly detailed on each lender’s website, so you can make an informed financing decision. You can be quickly approved online too, meaning you can

What credit score do you need for a car loan in British Columbia?

Securing a car loan requires understanding how your credit score impacts credit approval. While a good credit report and strong credit history are advantageous, as lenders perform credit checks to determine eligibility, bad credit doesn’t preclude you from financing. Plenty of options exist for those with bad credit, including pre-approval and pre-qualify options. Being pre-approved can provide leverage when car shopping, whether you’re looking at new vehicles or used cars.

Is it better to get a car loan from a bank or dealer in British Columbia?

Deciding whether to get a car loan from a bank or a dealer in Canada involves weighing the benefits of each option. Banks and credit unions can offer competitive rates, but local dealerships can provide more variety, including promotional rates for select vehicles at participating dealerships. The decision is inevitably a personal one; a dealership may have more flexibility in terms of repayment, allowing semi-monthly or bi-weekly payment options. This is especially true of a dealer that’s part of a nationwide network.

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