Car Loans in Ontario

If you are looking to buy a new or used car, truck or even a trailer, an auto loan is a great financing option to consider. The approval process for a car loan in Ontario is quick and simple. You can receive your auto financing in just a few business days upon completing the online application.

Smarter Loans have compiled a list of reputable lenders in Ontario that offer auto loans online.

Simply review the table below, compare your car financing options by factoring in the interest rates, product offerings, repayment terms and customer testimonials in your final decision.

Once you’ve made up your mind on which Ontario car loan lender is right for you, click on “Apply Now” next to lender’s listing and you will proceed to their online auto loan application form. You also have the choice to pre-apply for an auto loan with Smarter Loans. We will connect you to the best Ontario auto loan lender that fits with what you’re looking for. They will reach out to you shortly to discuss the next steps of your vehicle loan application.

Ontario Car Loans FAQs


How does car financing work in Ontario?

Buying a new car carries a few difficulties in Ontario. It’s expensive enough as is, then you have to buy the most expensive car insurance in Canada. However, for many Ontarians, a car is a regular and necessary part of everyday life. This makes purchasing a car on your own a difficult thing to approach. The thing is that after a home, a car is usually the second most expensive thing a Canadian family will purchase. Fortunately, there are a few options for financing a car in Ontario.

One way to finance a car is through a loan arranged with your car dealer. The majority of Ontario car dealers can arrange a loan on your behalf. When buying a new car, the manufacturer will often have a financing division that can provide loans to customers. If the manufacturer can’t give you 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.

The other way to get a car loan is by finding your own lender. You can go to a bank, credit union, or alternative lender yourself. Or, you can also find fast auto loans online.


How to get approved for a car loan in Ontario?

To get approved for a car loan in Ontario, you must submit a loan application to an auto lender. You can do this yourself or have your dealership do it for you. Either way, you will need to prepare for some paperwork.

Any auto loan lender in Ontario will want to see your credit score. They will use your credit score to determine if you qualify for an auto loan. Then, if you’re qualified, they will determine your rates with the help of your credit score.

So, to get approved, you just need to:

  • Qualify for an Ontario auto loan with an adequate credit score.
  • Submit basic information about yourself.
  • Have a monthly income of at least $1,200.
  • Wait for their response.

How do you get a car loan with bad credit in Ontario?

Getting a car loan in Ontario isn’t necessarily hard. However, if you have a low credit score & income, you will have a more difficult time. Vehicle financing in Ontario works the same way it does elsewhere. Regardless of who your lender is, they will offer you loans according to their assessment. Your credit score will be one of their top consideration.

Even if you don’t qualify for an auto loan from a bank, there is always another way. The key is finding the right help. The right help can come from your dealership, while other auto loan providers can also do a good job.


What are the current auto loan rates in Ontario?

Ontario car loan interest rates will vary based on your credit score and the age of the car you’re purchasing. You can typically expect much better rates if you’re buying a new car.

Unfortunately, it’s hard to put an exact figure on the rate you’ll get on an Ontario auto loan. Their interest rates can vary from 3% to almost 30%. Furthermore, the longer the loan’s term is, the higher the total interest will be.

As a point of reference, if your credit score is fair or better, you can get a rate of 0-1% on a new car, and a rate of almost 7% on a used car. If you have bad credit, your auto loan rate will be at least 10% in most cases. If the car is used, that will also push your rates up. Just keep in mind that lenders usually won’t finance a vehicle over 7 years old.


Can I get a loan for a used car in Ontario?

Yes, you can get a loan for a used car in Ontario. However, used car financing will always cost you more in interest. Used car interest rates start around 5% but can climb as high as 30% in extreme cases.

Different lenders have different cutoff points, but many won’t finance a car that’s too old.


Things to keep in mind when applying for an auto loan in Ontario

When you apply for an auto loan in Ontario, keep the following factors in mind:

Total Cost

The APR on your car loan should be factored into the total cost of your car. This is especially true of older cars. While the lower cost of a used car usually makes up for the higher interest rates, you should add the cost of your interest payments to the total cost of the car.

Day-to-day Finances

Borrowing money for a car will affect your regular spending. Monthly payments for a car loan will affect your ability to make other regular payments like rent and utility bills. You must factor in this additional expense before you take out a car loan.

Car Insurance

Of course, you can’t forget the cost of insuring a vehicle as well. Insurance costs are very high in Ontario, so you need to make sure you can handle both your monthly payments on your loan and your insurance costs. Once your car loan is paid off, you will find it easier to handle the cost of insurance.


Ontario Car Loans Facts

Car Loan Rates

According to Statistics Canada, the average interest rate on an auto loan in Canada (new vehicle) was 4.38% as of September 2019.

Loan Term Lengths

More than half of new car loans are taken for amortization periods exceeding 84 months. Long amortization rates help fuel car sales in Canada. Because of this, the average Canadian is five times more likely to get a long-term car loan than the average American.

Leasing

If you want to lease a vehicle in Ontario, you will likely have a better monthly rate. You will only have to pay for a portion of the vehicle’s value. The downside is that you won’t actually own the vehicle.

Strong Rights As An Ontarian

You are always protected when purchasing a vehicle from an OMVIC-registered dealer in Ontario. According to the Motor Vehicle Dealers Act, a dealer is obliged to include the total cost of a vehicle. They must also disclose the full history of the vehicle and its condition, including:

  • Age
  • Make
  • Model
  • Mileage

Should they fail to do so, you can resort to the Motor Vehicle Dealers Compensation Fund. You are entitled to a full refund within 90 days if the dealer withholds any of this information.

Almost Anyone in Ontario Can Get One

There are plenty of myths floating around that say you can’t get an Ontario car loan if:

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

The facts are:

  1. If you’re self-employed, you just need to provide evidence of income.
  2. A lack of credit history isn’t a big challenge. If you can provide proof of income, you should be fine. Car purchases are the second largest purchase you’ll make in your life after your home. However, car purchases often happen first. Dealers and lenders understand this. In fact, using a car loan responsibly is a great way to get a good start for your credit score!
  3. The Financial Consumer Agency of Canada reports that one-quarter of all auto financing options are subprime.

 

Useful resources and tools for Ontario car buyers:

 

Smarter Loans is your one-stop source for locating the leading auto loan lenders in Ontario for your financing needs.

Review our list of auto loan companies to compare current car loan rates in Ontario.

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