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Auto Loan Refinancing

One application. 1 lender from our 50+ network. Funded in 24 to 48 hours.

1 lender in our network refinance an existing car loan. Borrow $7,500 to $200,000 from 6.93% APR, with funding as fast as 2 days. Every lender is subject to the 35% federal rate cap. Most lenders ask for $1,500 monthly income. Rates reviewed September 2026.

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Amount: AnyCredit: Any Province: Any Sort: Recommended
★★★★★ 4.6 (7)
Amount
$7,500 - $200,000
Rate
From 6.93% APR
Terms
96 months
Funding
2 days
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Best for Buyers with poor credit financing a higher-value vehicle over the longest available term · Auto refinance

Refinancing works on one condition, and negative equity is what breaks it

The arithmetic is straightforward: if the new rate is materially below the current one across the remaining term, refinancing saves money.

What stops it is owing more than the vehicle is worth. A lender refinancing a car lends against the vehicle, and if the payoff exceeds the value, there is nothing to lend against.

How to check before applying: get the exact payoff figure from your current lender in writing, and get a realistic wholesale value for the vehicle, not a retail listing price. If the payoff is higher, you are in negative equity and refinancing is generally not available until the gap closes.

Long terms are what create this. An eighty-four or ninety-six month loan on a depreciating asset leaves you underwater for years.

When it makes sense

  • Your credit improved. The most common good reason. A file that has recovered since the original purchase can access materially better pricing
  • The original loan was dealer-arranged at a marked-up rate. Dealer financing can carry a rate above what the lender approved, with the difference retained. Refinancing removes that
  • Rates moved in your favour since purchase
  • The payment is unmanageable and extending the term is the alternative to defaulting. Legitimate, but see below

The term reset trap

Refinancing into a longer term lowers the payment and raises the total cost, and it restarts the clock on negative equity.

A car three years into a five-year loan, refinanced onto a new five-year term, is now eight years of payments on a vehicle that is already three years old. The payment falls. The total paid rises considerably, and you are underwater again.

If the goal is a lower payment rather than a lower cost, be clear with yourself that those are different objectives.

How the process runs

  1. Get the payoff figure in writing, valid to a specific date
  2. Get a realistic wholesale valuation
  3. Apply with the vehicle identification number and the payoff figure
  4. The new lender pays out the old loan directly and registers its own interest
  5. Confirm the old lien is discharged, which is your responsibility to verify rather than assume

Watch for a prepayment penalty on the existing loan. Most Canadian auto loans allow prepayment, but confirm rather than assume.

Common questions

Can I refinance a car loan in Canada?

Yes, where the vehicle is worth more than the payoff. Negative equity is the most common obstacle.

Will refinancing lower my payment?

Extending the term lowers the payment and raises the total cost. A lower rate over the same term lowers both.

Can I refinance with bad credit?

Refinancing usually only helps if your credit improved since the original loan. If it has worsened, a new offer is unlikely to beat the existing one.

What is negative equity?

Owing more than the vehicle is worth. Long terms on depreciating assets create it, and it blocks refinancing until the gap closes.

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