What is the average car loan interest rate in Canada?

The Bank of Canada reported an average of 6.57% in April 2026, holding in the mid 6% range through early 2026. New vehicle loans for borrowers with good credit typically run 6.9% to 7.5%, while used vehicle loans generally fall between 8% and 10%.

Do I pay tax where I buy the car or where I register it?

Where you register it. A buyer registering in Ontario pays 13% RST even if they bought the car privately in Alberta where no tax was charged. Buying in a low tax province produces no saving unless you also register there.

Do I pay tax on a private car sale?

In most provinces, yes. Alberta charges nothing on private sales. Ontario charges 13% RST at registration the same rate as a dealer purchase. British Columbia charges 12% PST with no GST for vehicles under $125,000. Manitoba charges 7% RST. The tax is usually calculated on the higher of your purchase price or the vehicle's wholesale book value.

How much tax do I pay on a used car in Ontario?

13%, whether you buy from a dealer or privately. From a dealer it's HST collected at purchase; privately it's Retail Sales Tax paid at ServiceOntario when you register. It's calculated on the higher of your purchase price or the Canadian Red Book wholesale value shown in the Used Vehicle Information Package.

How does BC's car tax work?

British Columbia uses a tiered PST that rises with vehicle price 7% under $55,000, stepping up through 8%, 9% and 10%, and reaching 15% and 20% on the most expensive vehicles, plus 5% GST throughout. Private sales are charged a flat 12% PST with no GST for vehicles under $125,000.

Does a trade in reduce my sales tax?

In Ontario, yes HST applies to the difference between the new vehicle price and your trade in value. On a $50,000 vehicle with a $20,000 trade in, that's tax on $30,000 rather than $50,000, saving $2,600. Treatment varies by province, so check your own.

Is an 84 month car loan a bad idea?

Usually. Longer terms carry higher interest rates as well as more months of interest, so the total cost rises substantially even though the monthly payment falls. They also extend the period during which you owe more than the vehicle is worth. If a 60 month payment feels unaffordable, that's usually information about the vehicle's price.

What is negative equity on a car loan?

Owing more than the vehicle is worth. It happens because cars depreciate faster than long loans pay down principal. If you sell, trade in, or write the car off during that period, you owe the shortfall in cash or roll it into your next loan, which compounds the problem.

What is the luxury tax on cars in Canada?

A federal Select Luxury Items Tax applies to vehicles priced at $100,000 or more, in effect since 1 September 2022. It's charged on the amount above $100,000 rather than the full price, and generally applies to new vehicles rather than private used sales. It stacks with provincial sales tax.

What credit score do I need for a car loan?

Financing is available across the credit spectrum, but the rate varies enormously. Scores above 720 typically see 3.99% to 6.99%, while scores below 620 can face 10.99% to 29.99% or higher. On a $20,000 loan over five years that's roughly $4,300 in interest versus $13,900 or more.

Is this calculator free?

Yes. No account, no email, no limits and we don't sell loans or refer you to lenders.

Auto Loan Calculator Canada

Most car loan calculators give you a monthly payment and stop there leaving out the sales tax, which ranges from 5% to 20% depending on where you register and how you buy.

This one includes it. Enter the vehicle price, your province, and whether you're buying from a dealer or privately, and you'll get the actual out the door cost.

Auto Loan Calculator Canada

Vehicle Sticker Price ($)

Trade-in Value ($)

Cash Down ($)

Province (Sales Tax)

Interest Rate (%)

Loan Term

Estimated Monthly Car Payment

$612

/ month

Or $282 bi-weekly · Total Financed: $30,900

Sales Tax

$3,900

Trade-in tax credit applied

Total Interest

$5,803

Over 60 months

Total Auto Cost

$44,703

Price + Tax + Interest

Auto Loan Balance PaydownRemaining Balance

Calculated following Canadian provincial sales tax laws where vehicle trade-in value reduces the net taxable price.

What You'll Actually Pay

Three numbers matter when financing a vehicle: the monthly payment, the sales tax (which ranges from $2,250 in AB to $6,750 in Atlantic provinces on a $45k car), and the total cost (vehicle + tax + interest).

Example: $35,000 Vehicle in Ontario (13% HST, $5,000 Down, 72 mos @ 7%)

Amount Financed: $34,550

Monthly Payment: ~$589

Total Interest: ~$7,858

Total Cost: ~$47,408

Credit Tiers & Typical Auto APRs

Credit Tier	Score	Typical APR
Super Prime	720+	3.99% to 6.99%
Prime	670 to 719	5.99% to 9.99%
Near Prime	620 to 669	8.99% to 14.99%
Subprime	Below 620	10.99% to 29.99%+

Sales Tax by Province (Dealer Purchases)

Province	Tax Rate	Tax on $45,000 Car
Alberta / Territories	5% GST	$2,250
Saskatchewan	11% (GST+PST)	$4,950
Manitoba / BC	12% (GST+RST/PST)	$5,400
Ontario	13% HST	$5,850
Quebec	14.975% (GST+QST)	$6,739
Atlantic (NB, NL, PEI)	15% HST	$6,750

You Pay Tax Where You Register, Not Where You Buy

Important Registration Rule: Vehicle sales tax is charged by the province where you register your vehicle. Buying privately in Alberta generates zero tax saving if you register the vehicle in Ontario (13% RST paid at ServiceOntario) or BC (12% PST paid at ICBC).

Why Use the CalcVault Auto Loan Calculator

Integrates Provincial Sales TaxIncludes GST, HST, PST, and QST across all 13 provinces and territories.

Dealer vs Private DistinctionModels separate tax rules for private sales vs dealership purchases.

Trade In Tax CreditCalculates net tax savings when trading in a vehicle.

100% IndependentZero dealer commissions, no lead generation, completely free.

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Auto Loan FAQs

Sources and Disclaimer

Sources: Bank of Canada (auto loan interest rates), Statistics Canada, provincial authorities (ServiceOntario, ICBC, BC Ministry of Finance), CRA (Select Luxury Items Tax).

Disclaimer: CalcVault is not a lender or car dealership. This tool provides estimates for planning purposes only.