Take a $35,000 car bought in Ontario. With 13% HST it costs $39,550. Put $3,000 down, borrow at 7.49% over six years, and the payment is $631.78 a month. Interest comes to $8,937.92, so the whole thing costs $45,487.92. Try your own numbers above.
What goes into the loan
The amount borrowed is the price plus sales tax, less your down payment and any trade-in. The calculator applies the tax for your province. Some buyers roll fees, warranties and registration into the loan too, which makes it bigger. If that’s your plan, add those items to the price.
How the payment is worked out
Three things set the payment: the amount, the rate and the number of payments. Stretch the term and the payment shrinks, but the interest grows. On the example, dropping from six years to four pushes the monthly payment up and takes thousands of dollars off the interest. Change the term and watch it happen.
Monthly or bi-weekly
Bi-weekly means a payment every two weeks, 26 times a year. You pay slightly sooner, so the interest ends up a little lower. Pick the frequency your lender offers, and the calculator adjusts the payment to match, so you can compare both ways before signing anything.
Down payment and trade-in
Put more down and you borrow less, pay less interest and have a smaller chance of owing more than the car is worth. A trade-in does the same job. In Ontario, sales tax is often charged on the price after the trade-in, though dealers differ, so ask how yours handles it.
Watch the interest rate
Your credit score, the age of the car and the lender all shape the rate. Get a quote from your bank or credit union before you walk into a dealership. On this loan, one percentage point changes the total by about $1,200 over six years.
Leasing or buying
Leases carry lower payments. Nothing is yours when the term ends, though. Buying costs more each month and you keep the vehicle. Drive a lot of kilometres or hold onto cars for years? Buying usually comes out cheaper overall.
New or used
A new car loses value fastest in its first years. With a small down payment, you can owe more than it’s worth. Used cars cost less, but the rate is often higher and the term shorter. Run both cases to compare totals, then set aside money for repairs on an older vehicle.
Extended terms are a trap
A seven or eight year loan keeps the payment low. You pay far more interest, though, and you’re still in debt when the car is worth little. Finish paying before the big repairs start. If the payment only works over a very long term, the car probably costs too much for your budget.
Toronto and Ontario drivers
Plenty of Toronto residents get by without a car, thanks to the TTC and GO Transit. If you do buy, expect higher parking, insurance and fuel costs than elsewhere in Ontario. Insurance alone can add several hundred dollars a month, so count it before agreeing to any payment.
Where to go next
Insurance, fuel, parking and maintenance all come on top of the payment. The monthly budget calculator shows the full picture. Other borrowing can be compared with the personal loan calculator, and the interest calculator shows what interest does over time.
Frequently asked questions
How is a car loan payment calculated?
From the amount borrowed, the interest rate and the number of payments.
Is sales tax included in a car loan?
Often yes. The calculator adds your province's tax to the price.
Does a longer loan cost more?
Yes. The payment is lower but total interest is higher.
Is a bi-weekly payment cheaper?
Slightly, because you pay a little sooner.
How much down payment should I make?
A bigger one lowers interest and the risk of owing more than the car is worth.
Are dealer fees included?
No. Add them to the price if you finance them.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.