An auto loan is one of the largest monthly expenses most Canadians carry. Getting approved is only half the equation — staying comfortable with your payment is what keeps you financially secure long term.
The 10-15% Rule
Financial advisors often suggest keeping total vehicle costs — loan payment, insurance, fuel, and maintenance — within 10-15% of your gross monthly income. For example, if you earn $4,000 per month, aim for $400-$600 total for everything car-related.
Factor In All Vehicle Costs
Your monthly loan payment is just one piece:
- Insurance — Rates vary by province, vehicle, and driving record.
- Fuel — Estimate based on your commute and vehicle efficiency.
- Maintenance and repairs — Budget for oil changes, tires, and unexpected fixes.
- Registration and fees — Annual costs vary by province.
Use a Realistic Loan Term
Longer loan terms lower monthly payments but increase total interest paid. A 60-month term is common for auto loans in Canada. Avoid stretching to 84 or 96 months unless you've carefully calculated the total cost.
Get Approved for What Fits
The Approval Centre helps you understand your approval amount and monthly payment before you commit. Our licensed professionals provide honest guidance — we want you in a vehicle you can afford, not one that strains your budget.
Start your application and get a clear picture of your options.