What is a Good Interest Rate for Your Car Loan?

Typical Vehicle Loan Interest Rates

If your credit score is lackluster, you may not expect a good interest rate for a car. Even still, it’s important to know what the average interest rate for car financing in Canada is given your credit score, so that you can avoid overpaying. If you are unsure how car finance rates in Canada best correspond with your credit score, you can consult the chart below. Be sure to keep reading for a breakdown of how to negotiate the best rate for you and information on what the typical vehicle loan interest rate is. If you have any questions about average interest rates for car financing in Canada that aren’t addressed, be sure to reach out to the Mercedes-Benz Burlington finance department.

How to Get the Best Interest Rate on a Car

To get the very best car interest rate in Canada, Burlington drivers should check their credit score in advance, then look at the chart above to determine what the average interest rate for car financing is for that score. Be sure to take notes about typical vehicle loan interest rates and bring that information to the negotiating table.

Is your score lacklustre because of a business loan or another reason that doesn’t necessarily reflect your behaviour as a spender? Can you prove that you can make timely payments or have records of other positive financial behaviour? Be sure to bring proof. At Mercedes-Benz Burlington, we understand that many of our neighbours with less-than-ideal credit scores have good reasons for their financial records. We can take a close look at your financial history and help you strategize as you apply for loans. We also have well-established relationships with national lenders, so working through us can help increase your chances of securing the typical vehicle loan interest rate in Canada or something better.

Another way to negotiate for a lower interest rate is to put up a larger down payment, which demonstrates to the lender that you’re committed to paying your loan. We also recommend identifying any small loans you can pay off before applying. If you can quickly spruce up your score a bit before applying, you’ll save money in the long run.

What is a Good Interest Rate on a Car Loan?

So, what is a good interest rate on a car loan? Any car finance rate in Canada that is better than the average listed above given your credit score is considered good. In 2023, the average car interest rate in Canada was 7.21%. In 2024, the typical vehicle loan interest rate is between 3.5% to 7.5%. Remember, the car finance rate in Canada you get may vary depending on your financial history. Also, bear in mind that car interest rates in Canada for a car can vary from one year to the next, depending on the health of the economy.

Get Flexible Financing in Burlington

Now that you know what a good interest rate for your car loan is given your credit score and what the average interest rate on a car loan is, give Mercedes-Benz Burlington a call at 877-557-3007. We’ll make sure you get a contract that is fair and works for your needs and budget in Hamilton or the surrounding areas.

If you have other questions about car financing, be sure to explore our site for informative reads about trading in a car for credit and how to sell your car to a dealership. We have many car-buying tips to help you navigate every step of your car-buying journey in Milton! Our team looks forward to helping you secure a competitive car interest rate in Canada!