Use our free **auto loan payment calculator canada** to quickly estimate your monthly car payment, total interest, and total cost of the loan. This tool helps Canadian buyers budget effectively and compare different financing options.
Auto Loan Payment Calculator Canada
Auto Loan Payment Calculator Canada Formula
Monthly Payment (M) = P [ i(1 + i)ⁿ / ((1 + i)ⁿ – 1) ]
Where:
i = Monthly Interest Rate (Annual Rate / 1200)
n = Total Number of Payments (Term in Years × 12) Formula Source 1: Bank of Canada Formula Source 2: Financial Consumer Agency of Canada (FCAC)
Variables Explained
- Vehicle Price: The full purchase price of the vehicle before taxes, down payment, or trade-in credit.
- Down Payment: The upfront cash amount you contribute towards the purchase.
- Trade-in Value: The value of your current vehicle that will be applied as credit towards the new purchase.
- Annual Interest Rate (%): The stated interest rate (APR) for the loan, typically compounded monthly or semi-annually in Canada (our calculator uses monthly compounding for simplicity).
- Loan Term (Years): The length of the repayment period, usually in years (e.g., 5 years = 60 months).
Related Calculators for Canadian Buyers
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- Car Lease vs. Buy Analysis Tool
- Amortization Schedule Generator
- Fuel Cost Savings Calculator
What is auto loan payment calculator canada?
An auto loan payment calculator is an essential financial tool for anyone planning to purchase a vehicle in Canada. It uses key inputs like the vehicle’s price, down payment, trade-in value, annual interest rate, and the loan term to accurately estimate the required monthly payment. This helps potential car owners determine what kind of vehicle fits their budget before committing to a purchase.
Understanding your monthly obligation is crucial, as is seeing the total interest you will pay over the life of the loan. In the Canadian market, loan terms can range significantly, and the calculator allows you to easily compare how changing the term (e.g., from 5 years to 7 years) impacts both your monthly cash flow and your overall total cost.
How to Calculate Auto Loan Payment (Example)
- Determine the Principal Loan Amount (P): Start with the Vehicle Price ($35,000) and subtract the Down Payment ($5,000) and Trade-in Value ($2,000). $35,000 – $5,000 – $2,000 = $28,000. So, P = $28,000.
- Calculate the Monthly Interest Rate (i): Divide the Annual Rate (6.5%) by 1200 (to convert to monthly decimal rate). $6.5 / 1200 = 0.0054167.
- Calculate the Total Number of Payments (n): Multiply the Loan Term in years (5 years) by 12. 5 * 12 = 60 payments.
- Apply the PMT Formula: Plug P, i, and n into the formula: $28,000 * [ 0.0054167 * (1 + 0.0054167)⁶⁰ / ((1 + 0.0054167)⁶⁰ – 1) ]$.
- Determine Total Interest: Multiply the monthly payment by the total number of payments (M * n), then subtract the Principal (P).
Frequently Asked Questions (FAQ)
Is the interest rate in the calculator the same as my APR?
Yes, the Annual Interest Rate you enter is generally the Annual Percentage Rate (APR). Note that in Canada, the way interest is compounded (monthly vs. semi-annually) can slightly affect the final effective rate, but the calculator uses the most common and simplest method for estimation.
What is a typical car loan term in Canada?
While 5 years (60 months) was once standard, 7-year (84 months) and even 8-year (96 months) terms have become increasingly common, particularly for new vehicles.
Does this calculator include sales tax (GST/PST/HST)?
No, this calculator does not automatically add provincial sales taxes (HST, GST, PST, or QST). You must include the total, tax-inclusive price of the vehicle in the “Vehicle Price” field for the most accurate payment estimate.
How much of a down payment should I make on a car in Canada?
A down payment of 10% to 20% of the vehicle price is typically recommended. A larger down payment reduces your principal, lowering your monthly payment and decreasing the total interest paid.