Ontario Car Loan Calculator

Important note

The sticker price is only part of what an Ontario buyer pays. At a dealer, 13% HST applies to new and used cars alike. Buy privately instead and ServiceOntario collects the 13% when you register the car — on the higher of your purchase price or the vehicle’s Red Book wholesale value (listed in the Used Vehicle Information Package), so a bargain private deal can still be taxed on the higher figure. Also budget for the $100 federal air-conditioning excise tax on new cars with A/C, the $12.50 OMVIC transaction fee dealers pass through on every sale or lease, small environmental fees on tires and filters (roughly $25–$30 on a new car), and freight/PDI charges that can run to roughly $2,000 on a new vehicle. Under Ontario’s all-in pricing rule, a dealer’s advertised price must already include every fee except HST and licensing — a quote that grows at the desk is a red flag.

How this calculator works

Five steps. First, the taxable amount: vehicle price minus trade-in, never below zero. Second, sales tax: taxable amount x your HST rate (13% pre-filled for Ontario). Third, the amount financed: taxable + HST - cash down payment, again floored at zero. Fourth, the monthly payment from the standard loan formula: payment = P x r(1+r)^n / ((1+r)^n - 1), where P is the amount financed, r is the annual rate / 12, and n is the term in months. Fifth, total interest: (monthly payment x n) - amount financed.

Two model choices worth knowing: the trade-in reduces the taxable amount before HST is applied — you pay HST on the difference, not the sticker price, as Ontario dealers do it. The down payment instead reduces the amount financed after tax — which is why more down lowers payment and interest but never the HST bill.

Not in the model: dealer admin fees, licensing, extended warranties, insurance — add those to the vehicle price field for a rough all-in figure. The formula compounds monthly; a lender's disclosure may differ slightly, so treat the payment as an estimate for comparing scenarios, not a quote.

Worked example: $40,000 car, $10,000 trade-in, 7% for 5 years (2026)

A $40,000 vehicle, $10,000 trade-in, $5,000 down, 13% HST, 7% rate, 5-year term: taxable = $40,000 - $10,000 = $30,000; HST = $30,000 x 13% = $3,900; financed = $28,900. With r = 7% / 12 and n = 60, the payment is $572.25/month and total interest = $572.25 x 60 - $28,900 = $5,435.28 — $34,335.28 all in.

The trade-in's value shows up twice: without it, taxable would be $40,000, HST $5,200, financed $40,200, and the payment $796.01 — so the $10,000 trade-in saves $1,300 in HST and $223.76 a month, worth more than face amount through the tax effect. Term choice matters too: the same $28,900 over 7 years costs $436.18/month but $7,738.99 in total interest — $2,303.71 more than the 5-year term.

Practical tips

• Get pre-approved by your bank before visiting the dealership, then ask the finance office to beat that rate.
• Negotiate the vehicle price first and financing second. The price is the input you control most, and every $1,000 off the price saves about $188 in interest at 7% over 5 years.
• Keep the term as short as your budget allows. Each extra year lowers the payment but adds hundreds in interest — and leaves you owing more than the car is worth for longer.