Used Car Loan Interest Rates?

  • Last Updated:
  • May 13th, 2020 4:01 am
Jul 31, 2010
14 posts
North York

Used Car Loan Interest Rates?

First time car owner. What would be considered a good rate for someone with good credit here in Ontario? My credit union offered me 4.45% fixed over 5 years. Is that any good?
3 replies
Deal Guru
Sep 1, 2004
12002 posts
As of posting:

Unsecured LOC = Prime+1-2% = 3.45-4.45%

HELOC = Prime+0.5-1% = 2.95-3.45%

These are open loans as you can pay as little as interest only and as much as the whole loan.

Now your 4.45% used car loan is decent. But a 5 year loan on a used car is not ideal unless you are getting something really reliable or cheap to fix. At some point of the loan, you will be out of warranty and may have to start paying for repairs. Having that and loan payments at the same time is not ideal.

Just curious whats your budget and model you are looking for and why you think you need 5 years to pay off an used car?
Deal Addict
Apr 5, 2017
1496 posts
Edmonton, AB
4.45 is decent. I usually see 4.99-6.99 on used cars and that's with very good credit. Post-Covid, approval is going to be a lot tougher than before and rates are going down across the board. I'd like to see lower rates for used cars, that market is, or will be hurting.
Sr. Member
Aug 29, 2008
708 posts
I work as a finance manager, used car rates go from 4.99 (occasionally 4.49 ) to 6.99. Most dealer would sell at 5.99 for every customer so they can make a bit of a kickback with the bank. If someone sells you at 6.99 (or higher) it means they are making more money off you and you should try to lower it (they always can), unless you are in the subprime market which starts at 8.99.

Having said that lines of credit are sometimes cheaper than the cheapest rates offered by banks, so go with whatever Makes more sense to you.