Car Loan Calculator (Canada)

The Interest Act of Canada (s. 6) requires that mortgage interest be calculated 'half-yearly or yearly, not in advance.' This is why every Canadian mortgage is semi-annually compounded. Auto loans, personal loans, credit cards, and lines of credit are not covered by this section — they use the convention the lender quotes, which in Canada is universally monthly compounding. The annual rate sticker on a car loan IS the nominal annual rate compounded monthly; no conversion needed.

Lower monthly payment, but more interest and a much higher chance of being 'underwater' (owing more than the car is worth) when you want to trade or sell. Cars depreciate fast — typically 30–40% in the first three years. With a long-term loan, the principal balance falls slowly enough that the loan balance can exceed market value for years. Run the numbers at 60 months vs 84 months to see the trade-off; if the 60-month payment isn't affordable, you may be looking at a more expensive vehicle than your budget actually supports.

Enter rate = 0%. The math reduces to principal ÷ months. The trade-off is usually that 0% financing comes with no manufacturer cash-back, while a paid-cash purchase (or higher-rate financing) often unlocks $1,000–$5,000 in rebates. Compare the total cost: 0% loan total = price; cash + rebate total = price − rebate (and any opportunity cost on the cash you used). Sometimes 0% wins, sometimes the rebate + a modest credit-union rate wins.

Sales tax (GST/HST/PST) on the purchase price — typically 5–15% depending on province; rolled into the principal at closing if not paid up-front. Documentation fees ($300–$700 dealer-specific). Extended warranties or service plans (usually overpriced; calculator excludes them). Insurance. Trade-in tax credits (most provinces let you reduce the taxable amount by the trade-in value — Ontario, BC, Alberta do; Quebec has different rules). Use the dealer's bill of sale for the binding pre-tax + tax breakdown; this calculator handles only the loan itself.