Understanding Vehicle Financing in Canada
Buying a vehicle is one of the largest purchases many Canadians make, and financing is how most people make that purchase affordable. Here's how it works.
When you finance a vehicle, you borrow money to purchase it and repay that amount over time through regular monthly payments. The lender pays the dealership for the vehicle, and you repay the lender over the agreed term.
A Typical Financing Agreement Includes:
Purchase Price
The agreed price of the vehicle
Down Payment
Amount paid upfront to reduce the loan
Loan Amount
Purchase price minus your down payment
Interest Rate
The cost of borrowing, expressed annually
Loan Term
Length of time to repay the loan
Monthly Payment
Your regular scheduled payment amount
Factors That Can Affect Financing
Lenders and dealerships consider a variety of factors when reviewing a financing application. These may include:
Less-Than-Perfect Credit?
Having less-than-perfect credit does not automatically mean financing is unavailable. Many dealerships and lenders work with a variety of financial situations. The best way to understand your options is to complete an application and speak with participating dealerships.
Ready to Explore Your Options?
Complete a short application and connect with participating dealerships across Canada. No obligation, no cost.