Dealers quote bi-weekly payments that look small. See the full picture: sales tax for your province, fees, trade-in, interest and the real total cost of the car.

What goes into a car payment

  • Price and fees: freight, PDI, admin and dealer fees are usually taxable.
  • Trade-in: in most provinces, the trade-in value is deducted before sales tax is calculated, which saves you tax.
  • Sales tax: 13% HST in Ontario, 14.975% in Quebec, 5% GST in Alberta, and so on.
  • Interest rate and term: longer terms of 84 or 96 months lower the payment but add a lot of interest.

Watch the term

A long term can leave you owing more than the car is worth for years (negative equity). If you can, keep the term at 60 months or less, or make a larger down payment.

FAQ

Should I take 0% financing or a cash rebate?

Compare both: calculate the payment at 0% on the full price, then at a bank rate on the price minus the rebate. Pick the lower total cost.

Is used car sales tax different?

Private used car sales are taxed differently in some provinces, for example Ontario charges 13% RST on the greater of the price or wholesale value.

Any loan, not just cars?

Use the general loan calculator.