Auto Loan Calc
Free car loan calculator with amortization, prepayments & scenario comparison
Quick Start
- Enter your costs in the Itemized Costs section — each line from your dealer quote.
- Check "Taxable" for items subject to HST/GST. Uncheck for government fees like Tire Recycling or Air Tax.
- Set your adjustments — trade-in value, discount, and down payment.
- Enter your loan terms — interest rate and number of months.
- The Loan Summary and Amortization Schedule update automatically.
Key Definitions
- Total Selling Price
- The sum of all line items from your dealer quote, before any adjustments.
- Adjusted Price
- Total Selling Price minus your Trade-In value and Discount. This is the base amount before tax.
- Taxable Base
- Adjusted Price minus any Non-Taxable Fees (e.g. Tire Recycling, Air Tax). This is the amount HST/GST is calculated on.
- Trade-In Value
- The amount your dealer is giving you for your current vehicle. In Canada, this reduces the taxable amount before tax is applied.
- Discount
- Any manufacturer or dealer rebate. Like trade-in, this reduces the taxable base.
- Non-Taxable Fees
- Government-mandated fees (Tire Recycling, Air Tax, EHC) that are not subject to sales tax.
- Prepayment
- An extra lump-sum payment applied directly to your loan principal. In this calculator, prepayments keep your monthly payment the same but shorten your loan term — saving you interest.
- Amortization Schedule
- A month-by-month breakdown showing how each payment is split between principal and interest, and your remaining balance.
Scenarios & Comparison
- Save different quotes (e.g. "Mitsubishi Quote", "Steele Quote") to compare later.
- Load a saved scenario to see its full amortization schedule.
- Compare up to 4 saved scenarios side-by-side on key financial metrics.
Prepayments
Click Prepay on any row in the schedule to add a lump-sum payment. The schedule recalculates immediately, showing how many months you save and how much less interest you pay. Prepayments are applied at the end of that month — your regular monthly payment stays the same, but the loan ends sooner.
Compare Scenarios
Itemized Costs
| Description | Amount ($) | Taxable | Remove |
|---|
Adjustments
Loan Terms
Loan Summary
Amortization Schedule
| # | Payment | Principal | Interest | Balance | Prepay |
|---|
Understanding Car Loans in Canada
How Canadian Auto Loans Work
When you finance a vehicle purchase in Canada, you're taking out a secured loan where the vehicle itself serves as collateral. Unlike mortgages, Canadian auto loans use simple monthly interest — your interest rate is divided by 12 to get a monthly rate, and interest is calculated on your remaining balance each month. This is different from Canadian mortgages, which use semi-annual compounding.
Your monthly payment is split between principal (the amount you borrowed) and interest (the cost of borrowing). Early in the loan, most of your payment goes toward interest. As the balance decreases, more of each payment goes toward paying down the principal. This is called amortization.
How Sales Tax Works on Vehicle Purchases in Canada
One of the most important aspects of buying a car in Canada is how sales tax (HST/GST/PST) is calculated. In most provinces, your trade-in value and any manufacturer rebates reduce the taxable amount before tax is applied. This means you pay less tax than the sticker price would suggest.
For example, if a vehicle costs $40,000 and your trade-in is worth $10,000, you only pay tax on $30,000 — not the full $40,000. This can save you hundreds or thousands of dollars depending on your province's tax rate.
Additionally, certain government-mandated fees like Tire Recycling Levies, Air Conditioning Taxes, and Environmental Handling Charges are not subject to sales tax. Our calculator lets you mark each line item as taxable or non-taxable to match your dealer's pricing sheet exactly.
Provincial Tax Rates for Vehicle Purchases
| Province | Tax Rate | Tax Type |
|---|---|---|
| Nova Scotia | 15% | HST |
| New Brunswick | 15% | HST |
| Newfoundland and Labrador | 15% | HST |
| Prince Edward Island | 15% | HST |
| Ontario | 13% | HST |
| Quebec | 14.975% | 5% GST + 9.975% QST |
| British Columbia | 12% | 5% GST + 7% PST |
| Manitoba | 12% | 5% GST + 7% PST |
| Saskatchewan | 11% | 5% GST + 6% PST |
| Alberta | 5% | GST only |
What Affects Your Car Loan Interest Rate?
Your interest rate is the single biggest factor in how much you'll pay over the life of your loan. Here's what determines the rate you'll be offered:
- Credit score: The most important factor. Borrowers with excellent credit (750+) typically qualify for the lowest advertised rates, while those with lower scores may pay significantly more.
- New vs. used: New vehicles generally get lower rates than used ones, as they represent less risk to the lender.
- Loan term: Shorter terms (36-48 months) often have lower rates than longer terms (72-84 months).
- Down payment: A larger down payment reduces the lender's risk and may help you secure a better rate.
- Lender type: Banks, credit unions, and dealer financing all offer different rates. It's worth shopping around.
How Prepayments Save You Money
Making extra payments toward your car loan principal is one of the most effective ways to save on interest. Here's why:
When you make a prepayment, that money goes directly toward reducing your principal balance. Since interest is calculated on your remaining balance each month, a lower balance means less interest charged going forward. Because your regular monthly payment stays the same, more of each payment goes toward principal — creating a compounding effect that pays off your loan faster.
Example: On a $35,000 loan at 5.99% for 60 months, your monthly payment is $677.52. Total interest paid over the term: $5,651. If you make a single $2,000 prepayment after month 12, you'll save approximately $700 in interest and pay off the loan about 4 months early.
Use the prepayment feature in our calculator to see exactly how much you can save by making extra payments at any point during your loan.
Tips for Getting a Better Car Loan
- Get pre-approved before visiting the dealership. This gives you a baseline rate to compare against dealer financing offers.
- Make a larger down payment — at least 10-20% of the vehicle price. This reduces your loan amount and may qualify you for a better rate.
- Choose the shortest term you can afford. While a 72-month loan has lower monthly payments, you'll pay significantly more in total interest than a 48-month loan.
- Consider a trade-in to reduce both your loan amount and your taxable base, saving on both the loan and the tax.
- Make prepayments whenever possible. Even small extra payments ($100-200) can shave months off your loan and hundreds off your total interest.
- Compare multiple dealer quotes using our scenario comparison feature. Different dealers may have different fees, discounts, or financing offers.
Frequently Asked Questions
What is a good interest rate for a car loan in Canada?
As of 2026, good rates for new vehicles range from 4.99% to 7.99% for borrowers with strong credit. Used vehicle rates are typically 1-3 percentage points higher. Rates vary based on your credit profile, the lender, and current economic conditions.
Should I choose a longer or shorter loan term?
Shorter terms (36-48 months) cost less in total interest and often have lower rates. Longer terms (60-84 months) have lower monthly payments but you'll pay significantly more over the life of the loan. Choose the shortest term where the monthly payment fits your budget.
Does a trade-in really save me money on tax?
Yes. In most Canadian provinces, the trade-in value is deducted from the vehicle price before sales tax is calculated. For example, on a $40,000 vehicle with a $10,000 trade-in at 13% HST, you save $1,300 in tax compared to buying without a trade-in.
Can I make prepayments on my car loan?
Most Canadian auto loans allow prepayments without penalty, but you should confirm with your lender. Some loans may have restrictions on the amount or frequency of prepayments. Always check your loan agreement.
What fees on a car purchase are not taxable?
Government-mandated fees like Tire Recycling Levies, Air Conditioning Tax ($100 federal), and Environmental Handling Charges are typically not subject to sales tax. Dealer admin fees, freight/PDI, and optional extras are usually taxable. Check your dealer's pricing sheet for specifics.
How much should I put down on a car?
Financial experts recommend at least 20% down. A larger down payment reduces your loan amount, lowers your monthly payment, reduces total interest paid, and may help you qualify for a better interest rate. It also prevents you from being "upside down" (owing more than the car is worth).
What's the difference between HST, GST, and PST?
GST (Goods and Services Tax) is a 5% federal tax applied across Canada. PST (Provincial Sales Tax) varies by province and is applied separately from GST. HST (Harmonized Sales Tax) combines both into a single rate in participating provinces (Ontario, Nova Scotia, New Brunswick, Newfoundland and Labrador, and PEI).