How to use this Canadian car loan calculator
- Vehicle price: the agreed price before tax.
- Down payment and trade-in value: both reduce what you borrow. If you still owe money on your trade-in, subtract the payout from its value.
- Province or territory: sets the GST/HST and provincial sales tax.
- Interest rate and term: from 36 to 96 months.
You'll see your monthly and bi-weekly payments, a breakdown of the sales tax, the amount financed and the total interest for each payment schedule.
How the calculation works
Worked example
The same car with a $10,000 trade-in instead of a down payment is taxed on $30,000, so the HST drops to $3,900. That's why trading in can save more than the trade-in value alone.
Sales tax by province
| Province or territory | Tax on a vehicle |
|---|---|
| Ontario | 13% HST |
| Nova Scotia | 14% HST (since April 1, 2025) |
| New Brunswick, Newfoundland and Labrador, Prince Edward Island | 15% HST |
| British Columbia | 5% GST + 7% PST (8% to 20% from $55,000) |
| Saskatchewan | 5% GST + 6% PST |
| Manitoba | 5% GST + 7% RST |
| Quebec | 5% GST + 9.975% QST (on the pre-GST price) |
| Alberta, Northwest Territories, Nunavut, Yukon | 5% GST |
British Columbia charges a higher PST rate on passenger vehicles as the price rises. The rate is set by the full price before any trade-in, then applied to the price minus the trade-in: a $60,000 vehicle with a $25,000 trade-in is in the 10% tier, so PST is 10% of $35,000, or $3,500. Zero-emission vehicles use a $75,000 threshold for the higher rates, and private sales start at 12%. In Saskatchewan, untick the PST credit box if your trade-in doesn't qualify. Rules for used vehicles bought privately are different in several provinces, so check with your provincial government if you're not buying from a dealer.
Choosing a loan term
Longer terms make the payment smaller but cost more in total. On the $40,200 example above, every extra year adds interest and keeps you in debt longer while the car loses value. Pick the shortest term whose payment fits comfortably in your budget, and compare the dealer's financing with a pre-approval from your bank or credit union.
Tips for a better car loan
- Get pre-approved. A rate from your own bank or credit union gives you something to compare.
- Negotiate the price first. Agree on the vehicle price before discussing the payment.
- Ask about promotional rates. Some manufacturers offer low or 0% financing; compare the total cost with any cash discount you'd give up.
- Read the add-ons. Extended warranties and protection products can add to the amount financed and the interest.
- Check for prepayment terms. Paying extra early saves interest if your loan allows it.
Financing or leasing?
With a loan, you own the vehicle once it's paid off and can keep it, sell it or trade it in. With a lease, you pay for the vehicle's expected loss in value during the lease, plus interest and fees, and return it at the end unless you buy it out. Leases often have lower payments, but they come with kilometre limits and charges for wear beyond normal use, and you don't build equity.
Financing usually costs less over the long run if you keep vehicles for many years. Leasing can suit drivers who prefer a new vehicle every few years and drive predictable distances. Compare the total cost of each over the same period before deciding.
Paying off your car loan early
Paying extra on a car loan reduces the interest you pay and shortens the loan. Before you do, check your agreement for prepayment rules and ask the lender to apply extra amounts to the principal. Bi-weekly payments that match your pay schedule can make it easier to stay on track without missing a payment.
Comparing dealer and bank financing
Dealers can arrange financing through several lenders, and manufacturers sometimes offer promotional rates on new vehicles. A pre-approval from your own bank or credit union gives you a rate to compare. Run both offers through the calculator with the same price and term, and compare the payment and the total interest. Also check whether a low promotional rate means giving up a cash discount you'd otherwise get.
Budgeting for the full cost of a vehicle
The loan payment is only part of what a car costs each month. Insurance, fuel or charging, maintenance, tires, parking and licence renewals all add up, and insurance in particular varies a lot by province, vehicle and driver. Before committing to a payment, add these costs to the monthly figure from the calculator and make sure the total fits your budget.
What this calculator doesn't include
The results don't include licensing and registration, dealer fees, tire or environmental levies, extended warranties or insurance, and they assume a fixed rate and on-time payments. Sales tax rules can vary for used vehicles, private sales, leases and some vehicle types. Confirm the final numbers on your purchase and financing agreements.