How do you use this car loan calculator?
Enter the deal the way it appears on the bill of sale, and the calculator works out the payment, the tax and the full cost of borrowing.
- Enter the vehicle price before tax. Use the negotiated selling price, including any fees already built into it.
- Enter the down payment, the cash paid up front. It lowers the amount financed but not the sales tax.
- Enter the interest rate (APR) from the loan offer, and choose the term in months and the payment frequency: monthly, semi-monthly, bi-weekly or weekly.
- Choose the province or territory where the vehicle will be registered, and whether the car comes from a dealer or a private seller.
- Open “Trade-in and dealer fees” to add a trade-in, what is still owed on it, and taxable fees such as freight, PDI or administration charges that are not already in the price.
- Open “Sales tax options” to pay the tax in cash instead of financing it, to mark a zero-emission vehicle in B.C., or to use a different sales tax rate for a private sale outside Ontario and B.C. or a special provincial vehicle rate.
- Read the payment first, then the tables: every term, every frequency, every province, different interest rates and the year-by-year schedule. The CSV download lists every single payment.
Inputs stay in the browser. Nothing entered is sent to a server or added to the page address.
Worked example: a car from an Ontario dealer with a trade-in
Take a hypothetical $40,000 car bought from a dealer in Ontario, with a $8,000 trade-in that is fully paid off, $3,000 down, a 6.99% rate and a 72-month term paid monthly. All figures are for illustration only.
| Step | Amount | How it is worked out |
|---|---|---|
| Taxable amount | $32,000 | The trade-in comes off the price before tax |
| Ontario HST at 13% | $4,160 | Added to the loan |
| Amount financed | $33,160 | What the lender pays the dealer |
| Monthly payment | $565.19 | Fixed for the 72 payments |
| First payment split | $193.16 interest, $372.03 principal | Interest is charged on the balance |
| Total interest | $7,533 | The cost of borrowing |
| Total of payments | $40,693 | Everything paid to the lender |
Switching the same loan to bi-weekly payments gives $260.53 every two weeks and total interest of $7,482, a saving of only $51 over six years. The payment frequency changes the budget rhythm far more than the cost.
The trade-in did two jobs here: it reduced the loan by $8,000, and it reduced the HST by $1,040. Selling the old car privately instead would have to bring in at least that much more than the trade-in offer to come out ahead.
How much sales tax is added to a car loan in each province?
Sales tax on a dealer purchase is the province’s general rate: GST alone, HST, GST plus PST (retail sales tax in Manitoba), or GST plus QST in Quebec. The table runs the worked example above through every province and territory. The rates come from the Canada Revenue Agency’s GST/HST rate table and the provincial finance ministries.
| Province or territory | Sales tax rate | Tax on the example | Amount financed | Monthly payment |
|---|---|---|---|---|
| Alberta, Northwest Territories, Nunavut, Yukon | 5% | $1,600 | $30,600 | $521.55 |
| Saskatchewan | 11% | $3,520 | $32,520 | $554.28 |
| British Columbia (under $55,000), Manitoba | 12% | $3,840 | $32,840 | $559.73 |
| Ontario | 13% | $4,160 | $33,160 | $565.19 |
| Nova Scotia | 14% | $4,480 | $33,480 | $570.64 |
| Quebec | 14.975% | $4,792 | $33,792 | $575.96 |
| New Brunswick, Newfoundland and Labrador, Prince Edward Island | 15% | $4,800 | $33,800 | $576.09 |
Between the lowest and highest rates, the same deal carries $3,200 more tax and a payment $54.54 higher every month, because financed tax also attracts interest. Many bank car loan calculators ask only for a loan amount and leave sales tax out, which can understate the payment by this much or more.
The general rates are not the whole story for every vehicle. British Columbia charges more PST on dearer passenger vehicles and, at its two highest PST rates, GST on the PST as well (next section), and the federal luxury tax applies to some high-priced vehicles. When another special rate applies, the “Use a different sales tax rate” option replaces the general rate.
How much PST do you pay on a car in British Columbia?
B.C. sets the PST on a passenger vehicle by its purchase price, meaning the total price before a trade-in or down payment. Bought from a dealer, the rate is 7% under $55,000 and rises in bands; the rate of the band applies to the whole taxable amount, not just the part above the threshold. GST at 5% is added on top: on the price alone in the 7% to 10% bands, and on the price plus the PST in the 15% and 20% bands. The calculator applies these bands and the extra GST automatically when British Columbia is selected.
How to read this table: find the band the purchase price falls in; that rate applies to the whole taxable amount. Passenger vehicles include trucks and vans of ¾-ton or less. Zero-emission vehicles use higher thresholds, described below.
| Purchase price from | PST rate |
|---|---|
| $0 | 7% |
| $55,000 | 8% |
| $56,000 | 9% |
| $57,000 | 10% |
| $125,000 | 15% |
| $150,000 | 20% |
Source: General Information for GST/HST Registrants (RC4022) — Trade-ins; General Information for GST/HST Registrants (RC4022) — Trade-ins (who the rule applies to); General Information for GST/HST Registrants (RC4022) — Trade-in worked example; General Information for GST/HST Registrants (RC4022) — Trade-in worked example (result); Buy or sell a used vehicle in Ontario — Tax on used vehicles; Buy or sell a used vehicle in Ontario — Who pays; Bulletin PST 308, PST on Vehicles — definition of purchase price; Bulletin PST 308 — definition of passenger vehicle; Bulletin PST 308 — Table 1, PST rates for motor vehicles (columns - private sale passenger, private sale non-passenger, from a GST registrant passenger, from a GST registrant non-passenger); Bulletin PST 308 — Table 2, PST rates for ZEVs acquired after February 22, 2022; Bulletin PST 308 — end date of the ZEV rates; Bulletin PST 308 — private sales; Bulletin PST 308 — trade-ins on purchases in B.C.; Bulletin PST 308 — paying PST on a private sale. In effect from June 18, 2026; checked September 30, 2026.
Zero-emission vehicles (fully electric, plug-in hybrid and hydrogen) bought from a dealer use separate bands until February 22, 2027: 7% under $75,000, then 8%, 9% and 10% from $75,000, $76,000 and $77,000, with the same 15% and 20% bands at the top. A private sale is taxed at 12% below $125,000, on the greater of the price and the average wholesale value, and ICBC collects it at registration.
The jump is large for a car just over the first threshold. Take a hypothetical $60,000 passenger vehicle from a B.C. dealer with $5,000 down at 6.99% over 72 months:
| Gas or hybrid vehicle | Zero-emission vehicle | |
|---|---|---|
| PST band | 10% | 7% |
| Sales tax with 5% GST | $9,000 | $7,200 |
| Amount financed | $64,000 | $62,200 |
| Monthly payment | $1,090.83 | $1,060.15 |
| Total interest | $14,540 | $14,131 |
The same price carries $1,800 more tax as a gas or hybrid vehicle, plus $409 more interest because the tax is financed. Calculators that apply B.C.’s general 7% PST to every car understate the tax on a gas or hybrid passenger vehicle bought from a dealer for $55,000 or more.
Why is the tax more than 20% on a B.C. car priced at $125,000 or more?
GST is normally charged on the price alone, with the PST worked out separately. B.C.’s Bulletin PST 116 for motor vehicle dealers sets out an exception: when the 15% or 20% PST rate applies to a vehicle on which GST is payable, the PST is part of the amount the GST is charged on. A dealer sale carries GST, so the rule applies there; a private sale carries no GST, so only the PST is due.
Take a hypothetical $130,000 passenger vehicle from a B.C. dealer with $5,000 down at 6.99% over 72 months:
| Step | Amount | How it is worked out |
|---|---|---|
| PST at 15% | $19,500 | $130,000 is in the $125,000 band |
| GST on the price | $6,500 | The usual 5% |
| GST on the PST | $975 | The PST is part of the amount GST is charged on |
| Total sales tax | $26,975 | 20.75% of the price |
| Amount financed | $151,975 | Tax is added to the loan |
| Monthly payment | $2,590.29 | Fixed for the 72 payments |
Leaving out the GST on the PST would understate the tax by $975 and the payment by $16.62 a month. In the 20% band the extra GST works out to 1% of the taxable amount, for 26% in total. The bulletin’s own example uses the same $130,000 price and also adds the federal luxury tax, which this calculator does not include. One cent under $125,000 the PST is 10% and GST is charged on the price alone.
Does a trade-in lower the sales tax on a car?
For GST and HST, yes, when a personal vehicle is traded in at a dealer. The Canada Revenue Agency’s guide for GST/HST registrants explains that when a dealer accepts a used vehicle from someone who does not charge GST/HST (usually an individual, not a business), tax is charged on the net amount: the price minus the trade-in allowance. CRA’s own worked example uses a new car at $25,000 with a $10,000 trade-in: GST is charged on $15,000, which is $750.
CRA adds that this is similar to how most provincial sales taxes treat trade-ins. “Most” is not “all”, so the calculator applies the trade-in to the whole tax by default and lets the deduction be switched off. The value of the tax reduction on a hypothetical $8,000 trade-in, at each general rate:
| Sales tax rate | Tax saved by an $8,000 trade-in |
|---|---|
| 5% (GST only) | $400 |
| 11% | $880 |
| 12% | $960 |
| 13% | $1,040 |
| 14% | $1,120 |
| 14.975% | $1,198 |
| 15% | $1,200 |
A trade-in from a business that charges GST/HST on it works differently: CRA treats it as two separate sales, and the tax on the new vehicle is not reduced. That case is not modelled.
How is tax charged on a private used-car sale in Ontario?
A private seller does not charge sales tax. In Ontario the buyer pays 13% retail sales tax (RST) at ServiceOntario when registering as the new owner, according to the Government of Ontario. The tax is based on the purchase price or the vehicle’s wholesale value in the Canadian Red Book, whichever is greater, and a gift to a close family member can be exempt.
Take a hypothetical used car bought privately for $18,000 with a Red Book wholesale value of $21,000. The RST is $2,730, not the $2,340 a buyer might expect from the price alone. The calculator takes the wholesale value in the “Wholesale (Red Book) value” field and uses the higher of the two.
British Columbia works the same way for a private sale, at the private-sale PST rate on the greater of the price and the average wholesale value, collected by ICBC at registration; the calculator applies it when British Columbia and “A private seller” are selected.
Private-sale tax rules in the other provinces are not built in. Select “A private seller”, turn on the option to use a different sales tax rate, and enter the rate published by the provincial registry or finance ministry.
How does the car loan maths work?
A car loan is an instalment loan with a fixed payment. The calculator uses the standard loan formula:
- Rate per payment = the annual rate divided by the number of payments a year (12 for monthly, 24 for semi-monthly, 26 for bi-weekly, 52 for weekly).
- Number of payments = the term in months converted to the chosen frequency; a 72-month term is 156 bi-weekly payments.
- Payment = amount financed × rate per payment ÷ (1 − (1 + rate per payment) raised to the power of minus the number of payments).
Each payment first covers the interest on the balance for that period; the rest repays principal. Early payments carry the most interest, and the split shifts towards principal as the balance falls. The last payment is adjusted by a few cents so the balance ends at exactly zero. The test suite checks the schedule against the closed-form formula and reproduces the CRA trade-in example exactly; the methodology page explains how YieldMaple builds and tests its calculators.
Is a longer car loan term worth the lower payment?
A longer term lowers the payment, but every extra year adds interest. Using the worked example ($33,160 at 6.99%):
| Term | Monthly payment | Total interest | Extra interest vs 48 months |
|---|---|---|---|
| 48 months | $793.90 | $4,947 | — |
| 60 months | $656.45 | $6,227 | $1,280 |
| 72 months | $565.19 | $7,533 | $2,586 |
| 84 months | $500.31 | $8,866 | $3,919 |
| 96 months | $451.93 | $10,225 | $5,278 |
Going from 72 to 96 months cuts the payment by $113.26 a month but adds $2,692 of interest. On long terms the balance also falls slowly while the car loses value, so selling or trading in early can leave a balance larger than the car is worth. The calculator flags terms of 84 months or more.
What happens if you roll negative equity into a new car loan?
Negative equity is the gap between what is still owed on the current vehicle and what the dealer allows for it. Suppose the $8,000 trade-in in the worked example still had $11,000 owing. Nothing is left to reduce the price, and the $3,000 shortfall is added to the new loan:
- Amount financed rises from $33,160 to $44,160.
- The 72-month payment rises from $565.19 to $752.67.
- Total interest rises from $7,533 to $10,032.
The tax still falls, because the dealer allows the full $8,000 for the trade-in; what is owed on it does not change the taxable amount. Rolling negative equity forward is how car debt snowballs from one vehicle to the next, which is why the calculator shows it as a warning.
Should you lease or finance a car instead?
Financing and leasing answer different questions. A loan ends with a car that is fully owned; a lease usually has a lower payment, sales tax is charged on each lease payment instead of on the whole price up front, and the car goes back at the end unless it is bought out. Distance limits, wear charges and the buyout price decide which comes out cheaper over the same number of years. The car lease vs buy calculator compares both on the same car, and the comparison of car loan rates in Canada shows what lenders are quoting.
Common car loan mistakes
- Shopping by the payment alone. A dealer can reach almost any payment by stretching the term. Compare total interest and the total of payments, not just the monthly figure.
- Forgetting the sales tax. A calculator without tax understates the loan; in most provinces the tax is added to the amount financed.
- Ignoring the trade-in tax effect. A private sale of the old car has to beat the trade-in offer by more than the tax saving to be worth it.
- Rolling negative equity into every new car. The old balance is paid, with interest, on top of the new one.
- Paying for extras inside the loan without noticing. Add-ons such as extended warranties or protection packages added to the bill of sale are financed and taxed with the car.
- Skipping the pre-approval. A rate from a bank or credit union before visiting the dealer gives a benchmark for the dealer’s financing offer.
- Draining savings for a bigger down payment. A larger down payment saves interest, but an emergency cushion still matters; the emergency fund calculator helps size one. Existing high-interest debt can also cost more than the car loan saves; the debt payoff calculator compares repayment plans.
When should you talk to a professional about a car loan?
The calculator shows the maths of a loan; it cannot tell whether the loan fits a budget or whether an offer is fair. Consider asking the lender for the full cost of borrowing disclosure before signing, and checking the loan agreement for prepayment terms, fees and what happens after a missed payment. For a business vehicle, a trade-in from a business, or a purchase with special tax treatment, check with an accountant or the provincial tax authority.
A credit history affects the rate offered more than almost anything else. To see where it stands before applying, see how to check your credit score in Canada for free. This page is educational and is not financial advice.