Bad credit car loans cost far more than the bank average. Canada’s chartered banks charged an average of 6.66% (July 2026, Bank of Canada) on the auto loans they advanced, a figure that blends every credit tier, while Finder Canada puts subprime auto loans at 12.9% to 29.99% (September 17, 2026). No lender may legally charge more than 35% APR, fees included (Criminal Code, s. 347).
You can get a car loan with bad credit in BC, Alberta or Ontario, usually through a dealership that sends your file to a non-prime lender. This guide covers those three provinces: who lends, what each credit tier pays, what to bring and which contract terms leave you owing more than the car is worth.
The short answer
- 6.66%
The average chartered-bank rate on auto loans advanced in July 2026, all credit tiers combined (Bank of Canada).
- 12.9%
The low end of Finder Canada’s 12.9% to 29.99% range for subprime auto loans, meaning scores below 660 (page updated September 17, 2026).
- $2,707
The extra interest on a $25,000 car loan at 5% when the term stretches from 36 to 84 months, in FCAC’s own example.
- 35%
The legal APR ceiling on any car loan in Canada since January 1, 2025, with fees counted as interest (Criminal Code, s. 347).
| Provider | APR as published | Term | Provinces | How to apply | Last verified |
|---|---|---|---|---|---|
| EdenParkThrough a dealer | Not published | Not published | BC, AB, ON | Through a participating dealerWholly owned subsidiary of Fairstone Financial Inc. (Fairstone Bank of Canada); reports payments to the credit bureaus. | Oct 15, 2026 |
| LendCareThrough a dealer | Not published | Not published | BC, AB, ON | At the dealer's point of sale (dealer uses LendCare's FrontLine portal)Finances vehicles with no age restriction and up to 250,000 km; wholly owned subsidiary of goeasy Ltd. | Oct 15, 2026 |
| Prefera FinanceThrough a dealer | Up to 28.00% | Not published | BC, AB, ON | Through a participating dealer (Dealertrack / Compass Direct Portal)Mainly recreational and powersports financing; its 15-year terms apply to those loans, not cars. | Oct 15, 2026 |
| Rifco National Auto FinanceThrough a dealer | From 12.90% | Not published | BC, AB, ON | Through a participating dealerDescribes itself as 'Full spectrum non-prime lending' for dealers across Canada. | Oct 15, 2026 |
| Santander Consumer BankThrough a dealer | Not published | Up to 96 months | BC, AB, ON | Choose a vehicle at a dealer that uses Santander; the dealer submits the applicationRequires minimum income of $1,800/month and finances vehicles up to 10 model years old and 180,000 km. | Oct 15, 2026 |
| Scotia Dealer AdvantageThrough a dealer | Not published | Up to 96 months | BC, AB, ON | Only through partner dealers; no direct applicationScotiabank's dealer arm for near and non-prime loans, including buyers with no credit history. | Oct 15, 2026 |
| iA Auto FinanceThrough a dealer | From 8.99% | Not published | BC, AB, ON | Through a participating dealer; no direct consumer applicationRate Reducing Loan cuts the rate by 10% of the current rate every 12 months if all payments are on time and loan terms are met. | Oct 15, 2026 |
| FairstoneApply directly | 29.99% to 34.99%Personal loan rates; no auto-specific rate published | 6 to 60 months | BC, AB, ON | Directly, online or at a branch; quote stage has no credit impact per FairstonePrivate-sale car loans for vehicles 10 model years old or newer, 6 to 60 months. Its page states both $50,000 and $20,000 as the maximum. Its dealer financing arm is EdenPark. | Oct 15, 2026 |
| easyfinancialApply directly | 29.99% to 35.00%Personal loan rates; no auto-specific rate published | 9 to 84 months | BC, AB, ON | Online or at an easyfinancial branch (unsecured personal loan usable for a vehicle)Home page offers a 2% lower rate with a co-applicant; auto financing through dealers is handled by sister company LendCare. | Oct 15, 2026 |
| ClutchOnline car retailer | From 7.99% | 24 to 96 months | ON | Online, when buying a Clutch vehicle; soft check to pre-qualify, lenders may then pull a hard checkSells its own inventory with a 10-day or 750 km money-back guarantee; buying is Ontario only (BC is sell or trade-in). | Oct 15, 2026 |
| Canada DrivesLoan marketplace | Not published | Not published | BC, AB, ON | Online pre-approval, then referral to a partner dealer, which runs a credit inquiryNo longer sells cars itself since its 2023 creditor protection filing; it still buys cars from consumers. | Oct 15, 2026 |
| CarsFastLoan marketplace | Not published | Not published | BC, AB, ON | One online application; matched with lenders and a network of about 350 dealershipsStates it assists 'all types of credit including consumer proposals'. | Oct 15, 2026 |
| LoanConnectLoan marketplace | 8.99% to 35.00%Personal loan rates; no auto-specific rate published | 3 to 120 months | BC, AB, ON | Online application searching a network of Canadian lendersPersonal-loan search platform; loans of $500-$50,000 over 3-120 months. | Oct 15, 2026 |
| Loans CanadaLoan marketplace | 9.99% to 35.00%Personal loan rates; no auto-specific rate published | 12 to 96 months | BC, AB, ON | Free online quote; referred to third-party lenders/partner dealershipsSays it is 'a loan search platform and comparison website, not a lender'. | Oct 15, 2026 |
“From” rates go to the strongest applicants; your rate depends on your credit, income, the vehicle and the term. No provider pays NotchUp for its position in this table, which is sorted by type of provider and then alphabetically. Rates are hidden once a row is more than 30 days past its check. Nothing above 35% APR, Canada’s criminal rate, is ever shown. How NotchUp makes money.
| Provider | APR as published | Term | Provinces | How to apply | Last verified |
|---|---|---|---|---|---|
| ATB FinancialBank | 7.20% to 14.20%Personal loan rates; no auto-specific rate published | 12 to 60 months | AB | Apply online or call 1-800-332-8383ATB is an Alberta provincial Crown corporation; personal loan can be repaid in full at any time with no penalty. | Oct 15, 2026 |
| CIBC Personal Car LoanBank | Not published | 12 to 96 months | BC, AB, ON | At a partner dealership; you don't need to be a CIBC clientFinances up to 100% of a new or used vehicle up to 10 years old. | Oct 15, 2026 |
| RBC Royal BankBank | Not published | Not published | BC, AB, ON | Ask for RBC financing at one of 4,500+ enrolled dealerships, or apply for an RBC personal loanNewcomer program: up to 96 months and $75,000 with no credit history needed for vehicles under 10 years old. | Oct 15, 2026 |
| ScotiabankBank | Not published | Up to 96 months | BC, AB, ON | Ask for Scotiabank financing at one of 4,000+ dealershipsFinances new vehicles or ones up to 7 years old. | Oct 15, 2026 |
| TD Auto FinanceBank | Not published | Up to 96 months | BC, AB, ON | Ask for a TD Auto Loan at an authorized dealershipPage cites J.D. Power 2024-2026 studies: highest score in the retail non-captive non-prime segment; says those with past credit problems 'may qualify'. | Oct 15, 2026 |
| Coast Capital Auto FinanceCredit union | Not published | 24 to 84 months | BC, AB, ON | Apply online directly; private sales financedVehicles must be 10 years old or newer with no more than 185,000 km. | Oct 15, 2026 |
| DUCA Credit UnionCredit union | Not publishedPublished rate table carries no effective date | 12 to 60 months | ON | Apply directly with DUCARates page states rates are subject to change without notice; no dedicated car loan page. | Oct 15, 2026 |
| Meridian Credit Union (DriveON)Credit union | Not published | Not published | ON | Ask for Meridian DriveON financing at a participating Ontario dealershipApplications are usually completed within 30 minutes at the dealership. | Oct 15, 2026 |
| Servus Credit UnionCredit union | Not published | Not published | AB | Apply online or call 1.877.378.8728Vehicle loan page covers cars, motorcycles and RVs. | Oct 15, 2026 |
“From” rates go to the strongest applicants; your rate depends on your credit, income, the vehicle and the term. No provider pays NotchUp for its position in this table, which is sorted by type of provider and then alphabetically. Rates are hidden once a row is more than 30 days past its check. Nothing above 35% APR, Canada’s criminal rate, is ever shown. How NotchUp makes money.
Each row shows the provider’s published rate and the date we checked it. No provider pays for its position, and most dealer-channel lenders publish no rate at all.
What car loan rate can you expect with bad credit?
With a score below 660, published figures start around 9.9% and Loans Canada’s estimate for scores below 560 runs from about 19% up to the 35% legal maximum. We checked both sources on October 15, 2026; they disagree on the fair tier by several points, which shows how much lenders vary.
| Credit tier (score) | Finder Canada example rate | Loans Canada estimate |
|---|---|---|
| Excellent (760 and up) | 5.39% | About 5% to 8% |
| Very good (725 to 759) | 5.99% | About 7% to 12% (660 to 759) |
| Good (660 to 724) | 6.20% | |
| Fair (560 to 659) | 9.90% | About 12% to 19% |
| Poor (below 560) | 14.99% | From about 19% to the 35% legal maximum |
Finder’s figures are a worked example for a $48,000 new vehicle over a 5-year term (updated October 2, 2026); Loans Canada calls its bands estimates only (updated July 10, 2026). On the lender side, iA Auto Finance advertises “non-prime rates from as low as 8.99%” and publishes no term or ceiling (checked October 15, 2026).
The average new auto loan reached $36,979 in the second quarter of 2026 (Equifax Canada, August 24, 2026). Our monthly car loan rate tracker follows the bank average against published non-prime rates.
Where do you get a bad credit car loan?
Most people with damaged credit get financed at the dealership, which sends the application to one or more non-prime lenders and arranges the loan. The two other routes are lenders you apply to yourself and online car retailers or marketplaces that match you with financing.
Dealer-arranged non-prime lenders
Lenders such as iA Auto Finance and Santander Consumer build their business around dealer submissions. iA’s auto loan page sits on its dealer services site, and Santander Consumer launched in Canada with a single submission platform for all credit tiers, adding that dealer reserve “is also a possibility” to reward dealerships (Canadian Auto Dealer, September 15, 2021). Our reading: subprime credit runs through dealers because the dealer handles the car, the paperwork and the lender, and can be paid for placing the loan. FCAC says “a dealer doesn’t have to offer you the lowest interest rate,” so ask for every offer in writing.
Direct lenders
Banks, credit unions and some finance companies let you apply yourself, so you walk into the dealership with a number to hold against its offer. If you are in or have finished a consumer proposal, our guide to car loans during a consumer proposal covers what lenders ask for.
Online retailers and marketplaces
Online car retailers sell you the vehicle and arrange the loan, while marketplaces take one application and pass it to dealers or lenders. Clutch sells its own cars and arranges financing through lenders, but buying is available only in Ontario among these three provinces (Clutch FAQ, checked October 15, 2026). Canada Drives stopped selling cars in 2023 (Automotive News) and is now a pre-approval service: “We’ll match you with a local dealership” (checked October 15, 2026). CarsFast is a lead marketplace whose privacy policy allows sharing your application with lenders, dealerships and “purchasers of personal information.” Our comparison of Canada Drives, CarsFast and Clutch covers each one, and in every case the APR and term matter more than the website.
What documents do you need for a car loan?
Bring a driver’s licence from your province, proof of address and proof of income; RBC lists these for a car loan application (December 6, 2023).
- A valid driver’s licence from the province where you live.
- Proof of address: one recent utility bill, bank statement, lease, government ID, tax document or insurance policy.
- Proof of income: recent pay stubs or bank statements, and possibly proof of employment showing your income and job title.
- Your trade-in’s ownership and any payout statement, if you still owe on it.
- The down payment, ready to show as a cheque, bank draft or account balance.
How can you improve your odds of approval?
Ask for less: a cheaper car, a bigger down payment or both. Every dollar you put down is a dollar the lender does not have at risk on a car that loses value from the day you drive it home.
- Pull your credit report before you apply and dispute errors; both bureaus offer a free copy (see our free credit report guide).
- Save a down payment; our down payment guide for car loans shows how much changes the math.
- Choose the shortest term whose payment you can afford, and say the term out loud when you compare offers.
- Ask about rewards for paying on time. iA, for example, says borrowers who meet the loan terms may get a cut of 10% of their current rate once every 12 months.
- Apply with one or two lenders, not ten, and do not sign contracts with more than one dealership at the same time (FCAC).
What are the red flags in a bad credit car loan?
The biggest red flags are add-ons rolled into the loan, terms of 84 to 96 months, and any promise made before a lender has seen your file.
- Add-ons financed into the loan. Extended warranties, rust protection and credit insurance added to the amount financed collect interest for years. Optional credit insurance is excluded from the APR under the cost-of-credit disclosure rules, so the APR will not show it. Ask for each add-on’s price and have the ones you do not want removed.
- 84 to 96 month terms. Canadian car loans typically run 12 to 72 months, with some as long as 84 or even 96 months (NerdWallet Canada, February 4, 2025). A 96-month term on a used car is how people end up owing more than the car is worth. FCAC’s example: a $35,000 loan at 4% over 8 years on a $31,300 car leaves $7,725 of negative equity after one year.
- Approval promises. “Guaranteed approval” and “everyone approved” ads are a warning sign, and the Canadian Anti-Fraud Centre flags guaranteed loans for people with bad credit, especially when a fee is charged for approval.
- Upfront fees. In most provinces it is illegal to ask for a fee before you receive the loan (Canadian Anti-Fraud Centre).
- A payment with no APR. Any ad that quotes a payment or rate must also show the APR and the term; in Ontario that rule is O. Reg. 17/05, s. 61, under the Consumer Protection Act, 2002. Ask for the APR and the total cost of borrowing in writing.
- Signing before you are sure. None of the three provinces gives a cooling-off period on a signed car purchase or loan. OMVIC says “There is no cooling-off period” in Ontario, AMVIC says the same for Alberta, and the VSA says BC has no law requiring a dealer to take a car back (a lease gets one clear day). Get deposit terms in writing before you pay.
How much does a longer term cost on a bad credit car loan?
Stretching a $20,000 loan at 17.99% APR from 60 to 84 months cuts the payment by about $88 a month but adds about $4,835 of interest, by our calculation. The examples show the same loan both ways; 17.99% sits inside Finder’s 12.9% to 29.99% subprime range and Loans Canada’s 12% to 19% fair-credit estimate.
Representative example: 60 months
- Amount financed
- $20,000
- APR
- 17.99%
- Term
- 60 months
- Monthly payment
- $507.76
- Cost of borrowing
- $10,465.60
- Total repaid
- $30,465.60
Assumes equal monthly payments, no fees outside the APR and no early repayment. Illustration only, not an offer.
Representative example: 84 months
- Amount financed
- $20,000
- APR
- 17.99%
- Term
- 84 months
- Monthly payment
- $420.24
- Cost of borrowing
- $15,300.16
- Total repaid
- $35,300.16
Assumes equal monthly payments, no fees outside the APR and no early repayment. Illustration only, not an offer.
What is different in Ontario, Alberta and BC?
Ontario. OMVIC requires dealers to advertise all-in prices that “include all fees and charges the dealer intends to collect”, with only HST and licensing left out and stated as such. Compare that all-in price with the cash price on your bill of sale before you look at the financing. Read more in our Ontario car loan guide.
Alberta. A dealer must give you a mechanical fitness assessment before you sign (Vehicle Inspection Regulation, AR 211/2006), and Alberta requires a high-cost credit licence for anyone who offers, arranges or enters into credit at 32% APR or more, dealers included (alberta.ca). If a quote lands between 32% and 35%, ask for the licence number. Read more in our Alberta car loan guide.
British Columbia. The Vehicle Sales Authority told dealers on March 9, 2026 that finance placement fees “must be included” in the APR, and that hiding them in the vehicle price is a deceptive practice. BC also licenses consumer credit above 32% APR through Consumer Protection BC. Read more in our BC car loan guide.
Frequently asked questions
Can I get a car loan with bad credit in Ontario, Alberta or BC?
Yes, non-prime lenders do finance cars for people with bad credit in all three provinces, and most of those loans are arranged through a dealer. Expect a higher rate: Finder Canada puts subprime auto loans at 12.9% to 29.99% (September 17, 2026).
What is the average car loan rate in Canada?
The average chartered-bank rate on new auto loans was 6.66% (July 2026, Bank of Canada), across all credit tiers. It excludes finance companies and credit unions, which is where many bad-credit loans are made.
What is the highest legal interest rate on a car loan?
The highest legal rate is 35% APR, with fees and other charges counted as interest, under section 347 of the Criminal Code since January 1, 2025. Advertising an offer above that rate is also an offence.
How long should a bad credit car loan be?
Keep it as short as your budget allows, and treat anything over 72 months with suspicion. In FCAC’s example, $25,000 at 5% costs $1,974 in interest over 36 months and $4,681 over 84 months.
Does NotchUp lend car loans?
No, NotchUp does not lend car loans, has no referral partners and cannot get anyone approved. We publish provider rates checked on the provider’s own pages, with the date we checked them.
Sources
- Bank of Canada, Valet series V122667805: average chartered-bank rate on auto loans, funds advanced (July 2026)
- Finder Canada, Current car loan interest rates in Canada (updated October 2, 2026)
- Finder Canada, Subprime auto loans in Canada (updated September 17, 2026)
- Loans Canada, Average car loan interest rate in Canada (updated July 10, 2026)
- iA Auto Finance, Auto loans (checked October 15, 2026)
- Canadian Auto Dealer, Santander Consumer launches into Canadian auto lending market (September 15, 2021)
- Canada Drives, Car loan interest rates (checked October 15, 2026)
- Automotive News, Canada Drives to wind down online used-vehicle sales (2023)
- Clutch, FAQ (checked October 15, 2026)
- CarsFast, Privacy policy (updated January 2, 2025)
- Equifax Canada, Q2 2026 consumer credit trends (August 24, 2026)
- Financial Consumer Agency of Canada, Shopping around for a car loan (October 14, 2025)
- Financial Consumer Agency of Canada, Reducing the risks of car financing (October 14, 2025)
- NerdWallet Canada, How car loans work (February 4, 2025)
- RBC, How to get a car loan as a newcomer in Canada (December 6, 2023)
- Consumer Measures Committee, Agreement for the harmonization of cost of credit disclosure laws in Canada
- Justice Laws, Criminal Code, section 347: criminal interest rate
- Canadian Anti-Fraud Centre, Grant and loan scams (January 16, 2026)
- OMVIC, All-in price advertising
- OMVIC, Cancelling an agreement
- Government of Ontario, O. Reg. 17/05 under the Consumer Protection Act, 2002
- AMVIC, Before you sign
- Alberta King’s Printer, Vehicle Inspection Regulation, AR 211/2006
- Government of Alberta, High-cost credit business licence
- Vehicle Sales Authority of BC, Industry bulletin (March 9, 2026)
- Vehicle Sales Authority of BC, Vehicle returns
- Consumer Protection BC, High-cost credit granting