Calculation Summary
| Item | Amount |
|---|---|
| Monthly Car Loan Payment (Includes Sales Tax Amount) | |
| Total Loan Payments | |
| Total Interest Paid | |
| Number of Payments | |
| Car Sales Tax | |
| Payment Frequency | |
| Estimated Payment (per period) | |
| Loan Amount Financed |
Loans & Debt:
Car Loan Calculator Canada
Car Loan Calculator for Canada
Estimate your Canadian car loan payments with sales tax included. Add an optional trade-in and down payment, choose your interest rate, loan term, and payment frequency (weekly, bi-weekly, or monthly), and get a clear breakdown of principal vs interest vs tax.
Notes: This tool estimates sales tax by province. In B.C., PST tier is based on full price, while PST is applied to price after trade-in.
How this Car Loan Calculator works
This calculator estimates your payments using a standard fixed-rate loan amortization formula. It calculates sales tax based on your province, subtracts any trade-in and down payment from the total, and then computes payments over your selected loan term and frequency.
- Sales tax is estimated using your province rules (B.C. uses tiered PST with trade-in affecting the tax base).
- Amount financed = (Car price + Sales tax) - Trade-in - Down payment.
- Payments are calculated using the periodic interest rate for your chosen frequency.
- The chart shows a split of principal (net vehicle cost), interest, and tax.
About This Car Loan Calculator
Car financing in Canada can vary by lender, dealer, credit profile, and province. This calculator gives a clear estimate of what your payment schedule and totals might look like, especially when sales tax is rolled into the financing. Use it to compare different terms, rates, and payment frequencies before you commit.
Car Financing Guide for Canada
Car Financing Options in Canada
Canadian buyers have multiple paths to finance a vehicle purchase. Traditional routes include borrowing from banks, credit unions, or arranging loans through dealerships. Alternative methods involve leveraging home equity through HELOCs or cash-out mortgage refinancing, or using personal credit lines.
Dealership Financing
Quick and straightforward, with potential promotional rates. However, interest rates may be elevated due to dealer markups.
New vehicle financing typically comes from manufacturers, while used car loans involve third-party lenders.
Bank or Credit Union Loans
Direct borrowing usually offers more competitive rates and predictable terms, though approval processes take longer.
Many borrowers still apply through dealerships, which handle the submission to financial institutions.
Home Equity Line of Credit (HELOC)
Provides lower interest rates by using your property as collateral. Offers flexibility in accessing funds, but your home secures the debt.
Personal Loan or Line of Credit
Unsecured borrowing option with versatile usage. Generally carries higher rates than HELOCs and sometimes exceeds car loan rates.
Cash-Out Refinance
Replace your existing mortgage with a larger one to extract equity at a fixed rate. This route may include prepayment penalties and closing expenses.
Car Loan vs. Car Lease
Leasing presents an alternative to purchasing. While you make regular monthly lease payments, ownership never transfers to you. Leases typically feature smaller monthly obligations than loans, but you accumulate no equity and face distance restrictions. When your lease expires, you can either return the vehicle or buy it outright. Loans cost more monthly but build ownership, while leases offer flexibility with lower upfront commitment.
Car Sales Tax by Province
Vehicle purchases in Canada require paying sales tax where the car is registered. Most provinces allow this tax to be rolled into your loan. You'll pay either 5% GST alone, GST combined with PST, or a unified HST rate.
Private sales are exempt from GST. British Columbia uniquely applies tiered PST based on vehicle value.
| Province / Territory | Dealer Sale Taxes | Private Sale Taxes | Notes |
|---|---|---|---|
| Alberta | GST (5%) | No tax (0%) | Private transactions exempt from tax |
| British Columbia | GST (5%) + PST (7–20%) | PST (7–20%) | PST varies by vehicle price |
| Saskatchewan | GST (5%) + PST (6%) | PST (6%) | PST charged on both sale types |
| Manitoba | GST (5%) + RST (7%) | RST (7%) | Tax collected at registration |
| Ontario | HST (13%) | RST (13%) | Private sales taxed at 13% of wholesale value |
| Quebec | GST (5%) + QST (9.975%) | QST (9.975%) | QST calculated on GST-inclusive amount |
| New Brunswick | HST (15%) | HST (15%) | Uniform rate for all sales |
| Nova Scotia | HST (14%) | HST (14%) | Same rate regardless of seller |
| Prince Edward Island | HST (15%) | HST (15%) | Collected during registration |
| Newfoundland & Labrador | HST (15%) | HST (15%) | Paid at registration |
| Yukon | GST (5%) | No tax (0%) | No territorial levy |
| Northwest Territories | GST (5%) | No tax (0%) | No territorial levy |
| Nunavut | GST (5%) | No tax (0%) | No territorial levy |
B.C. Car Sales Tax (PST) by Purchase Price
British Columbia stands alone in applying graduated PST rates based on vehicle cost. The provincial tax starts at 7% for vehicles under $55,000 and climbs to 20% for $150,000 or more.
| Car Price | B.C. PST Rate |
|---|---|
| Under $55,000 | 7% |
| $55,000 – $55,999.99 | 8% |
| $56,000 – $56,999.99 | 9% |
| $57,000 – $124,999.99 | 10% |
| $125,000 – $149,999.99 | 15% |
| $150,000+ | 20% |
Federal Luxury Car Tax (National)
Since September 1, 2022, the Select Luxury Items Tax Act imposes an additional federal levy on specific high-value goods, including vehicles. This tax targets only new passenger vehicles exceeding $100,000 (certain exemptions apply). Used vehicles are not subject to this tax.
How It's Calculated
- 10% of the complete vehicle price (with add-ons included), or
- 20% of the portion above $100,000
Example Calculation:
| Item | Calculation | Amount |
|---|---|---|
| Car price | — | $140,000 |
| Federal luxury tax | Lesser of: 10% of $140,000 OR 20% of ($140,000 - $100,000) | $8,000 |
| Taxable amount for GST/HST | Car price + luxury tax | $148,000 |
| GST (5% GST-only province) | 5% × $148,000 | $7,400 |
| Total cost | Car price + luxury tax + GST | $155,400 |
How to Budget for a New Car in Canada?
Calculating your monthly payment represents just the starting point. Before selecting a vehicle or loan terms, assess what you can truly afford and how car ownership fits your financial picture.
- Insurance premiums
- Fuel or electric charging
- Maintenance and repairs
- Parking fees or tolls (where applicable)
Planning Your Car Purchase
- Research insurance costs by location
- Include fuel/charging expenses
- Account for maintenance
- Save for fa down payment to reduce interest
- Consider extra payments if allowed
Beyond Monthly Payments
- Shorter terms = higher monthly payment, lower total interest
- Longer terms = lower monthly payment, higher total interest
Frequently Asked Questions (FAQs)
How does sales tax affect my car loan in Canada?
In Canada, sales tax is typically added to your car purchase and can be financed as part of your loan. The tax rate varies by province, ranging from 5% GST only (Alberta, territories) to 15% HST (Atlantic provinces). British Columbia uses a unique tiered PST system based on vehicle price.
When you finance the tax, it increases your loan amount and the total interest you'll pay over the loan term. This calculator automatically includes the appropriate provincial tax in your payment calculations.
What's the difference between weekly, bi-weekly, and monthly payments?
Payment frequency affects how often you make payments and can impact the total interest paid:
- Monthly: 12 payments per year, easiest to budget alongside monthly bills
- Bi-weekly: 26 payments per year (every two weeks), results in slightly faster payoff
- Weekly: 52 payments per year, can reduce total interest slightly more than bi-weekly
More frequent payments mean you're paying down principal faster, which can save you money on interest over the loan term.
Should I include my trade-in value in the calculator?
Yes, if you're trading in your current vehicle, enter its value. The trade-in reduces your loan amount before sales tax is applied (in most provinces), lowering both your financed amount and monthly payment.
For example, if you're buying a $50,000 car with a $10,000 trade-in, you're only financing $40,000 plus applicable taxes, not the full $50,000.
How much should I put down on a car loan?
A larger down payment reduces your loan amount, monthly payment, and total interest paid. Financial experts typically recommend:
- New cars: 20% down payment
- Used cars: 10-20% down payment
However, the right amount depends on your financial situation. Even a smaller down payment can help reduce your borrowing costs. Use the calculator to see how different down payment amounts affect your monthly payment and total cost.
What interest rate should I expect on a car loan in Canada?
Car loan interest rates in Canada vary based on several factors:
- Credit score: Better credit typically means lower rates (5-8%)
- Vehicle age: New cars often have lower rates than used cars
- Loan term: Shorter terms may offer better rates
- Lender type: Banks, credit unions, and dealerships offer different rates
As of 2025, rates typically range from 5% to 12%+ depending on these factors. Shop around and compare offers from multiple lenders to find the best rate for your situation.
What's better: a shorter or longer loan term?
Shorter terms (24-48 months):
- Higher monthly payments
- Less total interest paid
- Build equity faster
- Own the car sooner
Longer terms (60-84 months):
- Lower monthly payments
- More total interest paid
- Higher risk of owing more than the car's worth
- More budget flexibility month-to-month
Choose based on your budget and financial goals. Use the calculator to compare different term lengths.
What is the federal luxury car tax?
Since September 2022, Canada imposes a federal luxury tax on new vehicles priced over $100,000. The tax is calculated as the lesser of:
- 10% of the full vehicle price, OR
- 20% of the amount over $100,000
This tax is added to the vehicle price before GST/HST is calculated. Used vehicles and certain exemptions (like emergency vehicles) are not subject to this tax. This calculator does not automatically include the luxury tax, so add it to your car price if applicable.
Can I pay off my car loan early in Canada?
Most Canadian car loans allow early repayment, but terms vary by lender. Some lenders charge prepayment penalties, while others allow penalty-free early payoff or extra payments.
Before making extra payments, check your loan agreement for:
- Prepayment penalty amounts or percentages
- Limits on extra payment amounts
- Whether extra payments reduce principal or advance your payment schedule
Even small extra payments can significantly reduce your total interest paid over the loan term.
Is it better to finance through a dealer or bank?
Dealer financing: Quick and convenient, sometimes offers promotional 0% rates, but may include dealer markup on interest rates.
Bank/Credit Union financing: Often more competitive rates, transparent terms, but requires separate application and may take longer to approve.
The best approach is to get pre-approved by your bank or credit union first to know your baseline rate, then compare it with dealer offers. This gives you negotiating power and ensures you get the best deal.