Getting a car sounds great! Your moving around will be made easier. As a resident in Canada, you have many options to get a vehicle from a direct lender to a dealership. Most people prefer dealerships or car loan platforms that have strategic lenders they partner with to find the most competitive car loan lenders.
A car loan is not a one-size-fits-all concept, you might need to do some research to get one that suits your finances. Amidst the many options, we have handpicked some of Canada’s best car loan programs. Let’s dive deeper!
3 Terms You Should Understand for Car Loans in Canada
To carefully secure a car loan in Canada, you need to understand these 3 terms that will be included in all car financing options.
1. Principal Amount
This is the main and total amount borrowed from the lender. As regards car loans in Canada, the principal is the cost price of a car with any extra cost like tax or dealer cost. Nonetheless, the down payment or deposit will be deducted.
2. Loan Term
This means the amount of time you’d need to repay the loan on the car. The shorter the term loan, the more monthly payment you’d pay with lesser Interest but the longer the loan term, the higher the monthly amount with more interest. Usually, the shorter loan term with less interest rate is considered the best option but you should decide what will work best for you according to your financial situation. A typical car loan term can be from a year to seven years.
3. Car Loan Interest Rate
It is typically referred to as the gain of your lender. It is the extra amount the lender charges on the money you borrow. You should conduct your due diligence and get a lender that offers a minimal car loan interest rate.
Best Car Loan Offers in Canada
1. CarsFast
It is a platform that helps you search for car loans, you apply online and you get matched with lenders’ offers that meet your needs. You can get a new or used car on the platform. CarsFast partners with 350 dealerships to help individuals with good and bad credit find a car loan.
You can also get fast quotes. However, it comes with higher interest rates for bad credit, and offers are limited to dealerships that partner with the platform only.
2. Clutch
An online dealer with a stock of used cars. They are available in Nova Scotia and Ontario. You can shop for a car online and have it delivered to your door. You can also test the car for some time, the seamless experience on Clutch helps you avoid the stress of dealing directly with a lender. Also, the prices are non-negotiable because the prices are competitive.
They offer a trial period which makes the platform attractive to prospective buyers, you can use the car for 10 days and return it if you are not satisfied, they work with Canada’s largest lenders to get the best rates. The drawback is they do not have new cars available.
3. Loans Canada
It’s an innovative online car search platform that helps you compare multiple options. They provide the best rates and terms on your car loan that are uniquely tailored to your needs. The platform matches you with a lender that works exclusively in your province.
Your application will go wide and you will be able to reach multiple lenders in a limited time. However, they also charge higher interest on bad credit.
4. Car Door
It offers secure financing, you can browse through vehicles and have the car delivered to your door. You can choose from a variety of used cars. Like clutch, you can have a money back guarantee after 14 days. With car door, you can either trade-in or sell your existing vehicle. However, it is only available in Ontario and it has limited selection of cars and lenders.
5. Canada Drives
It is one of the major players in the car loan market in Canada. It accommodates Canadian residents with different credit scores. Since 2010, it has been in the business of helping individuals get car loans, the application is simple and easy.
You can be sure to hear from them almost immediately after application. Keep in mind that their offers are limited to their network and they charge higher credit on bad credit.
6. TD
You can get financing from a large number of dealerships. You can finance different used or new vehicles like trucks, cars, marine vehicles, and power sports vehicles. You will be matched with an experienced lender who allows you to search for vehicles based on your predetermined budget but their rate offers are limited to their dealers.
7. LoanConnect
They work with all kinds of borrowers with different credit scores. They match borrowers with multiple lenders. You can get pre-approved offers within minutes after you apply. However, like most platforms, they charge higher interest rates on bad credit and have limited lenders.
8. BMO
You can get competitive rates and flexible terms. You can pay your car loans for up to 6 years, it might be one of the most suitable car loans in Canada if you are looking for something flexible. You can always choose between a fixed and variable rate. If you choose a fixed rate, it means it will stay stable throughout the loan time. If it is a variable rate, the rate will fluctuate depending on the activities of the Bank of Canada.
It is one of the largest financial institutions in Canada and can offer you a low-interest rate with a strong financial record. The downside is that a bad credit score may not qualify.
Bottom Line
The best loan platform you will choose will heavily depend on your situation and needs. The list of the best car loans in Canada can help you choose one and select the platform that offers what you need. You do not have to stress anymore to become a car owner with car loan programs in Canada.