Personal Finance

Car Loan Interest Rates

  • Last Updated:
  • Jun 28th, 2016 11:13 pm
[OP]
Deal Addict
User avatar
Nov 9, 2005
1172 posts
868 upvotes
Toronto

Car Loan Interest Rates

Hi all,

I'm looking into purchasing a car in the GTA with financing and I'm open to going to a dealer or RBC to secure the loan.

Has anyone purchased a car recently and what type of rate did you get? I'm just curious what competitive rates I should see quotes for with my excellent credit score.

Thanks,
Newpunk
6 replies
Moderator
User avatar
Mar 23, 2004
43280 posts
9202 upvotes
Markham
^ it really depends on the car you are getting. Higher-end/premium cars obviously have high rates, and a more standard car can be as low as 0%. Never borrow from the bank unless you have to (can go from 10-27%).
[OP]
Deal Addict
User avatar
Nov 9, 2005
1172 posts
868 upvotes
Toronto
I should say I'm looking at < $20,000 used car.

I was told that with good credit you can secure lower rates from your bank, as low as prime rate + 0.5%. So I'd be looking at as low as 3.2% with RBC. Many used car dealerships have 6-7% financing advertised, but I'm sure lower are available.

No way the bank would quote me 10%+ for a car or personal loan as my line of credit is already lower than that.

Has anyone had experience with any dealerships or banks recently that can give me a more accurate idea of what good rates are actually available?
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
Newpunk wrote: I should say I'm looking at < $20,000 used car.

I was told that with good credit you can secure lower rates from your bank, as low as prime rate + 0.5%. So I'd be looking at as low as 3.2% with RBC. Many used car dealerships have 6-7% financing advertised, but I'm sure lower are available.

No way the bank would quote me 10%+ for a car or personal loan as my line of credit is already lower than that.

Has anyone had experience with any dealerships or banks recently that can give me a more accurate idea of what good rates are actually available?
Car loans via the Big 5 are P+4% to P+12%.

If you have a line of credit, why wouldn't you just use that? Car loan rates never come close to preapproved PLC or secured PLC. Best option is HELOC.

Whichever poster said they would never take a car loan at 10% is mistaken. If you can get a big enough discount for paying cash at the dealership, a car loan from a bank can work out to be a better deal.
Deal Fanatic
Nov 22, 2015
5781 posts
5284 upvotes
angel_wing0 wrote: ^ it really depends on the car you are getting. Higher-end/premium cars obviously have high rates, and a more standard car can be as low as 0%. Never borrow from the bank unless you have to (can go from 10-27%).
Not true for car loans. Dealerships typically mark up the MSRP for financed vehicles. If you can get say 5000 off for paying cash for example, getting a loan from the bank might end up being the better option even if it's at 10%
[OP]
Deal Addict
User avatar
Nov 9, 2005
1172 posts
868 upvotes
Toronto
superfresh89 wrote: Car loans via the Big 5 are P+4% to P+12%.

If you have a line of credit, why wouldn't you just use that? Car loan rates never come close to preapproved PLC or secured PLC. Best option is HELOC.

Whichever poster said they would never take a car loan at 10% is mistaken. If you can get a big enough discount for paying cash at the dealership, a car loan from a bank can work out to be a better deal.
I have 6.69% interest rate on my line of credit now which is already a little less than P+4%, so I assumed that I would be eligible for a lower rate on a personal loan with fixed equal monthly payments for X months.

In any case, I see dealers offering as low as 4.9% financing on certain used vehicles so I know there are lower options. I'm just curious if anyone has gotten a better quote that may help me negotiate with my bank and the dealership (i.e. my friend with equal credit got x% rate with your competitor bank/credit union/dealership).
Newbie
Jun 21, 2016
34 posts
16 upvotes
I purchased a new model VW and got 4.99 from BMO

I should add, not sure why it didn't go through VW finance, but the advertised rate on the website was that rate for the model and term, so I accepted.

Top