New Car Financing in Ontario with a 600-700 Credit Score
Navigating the world of auto finance in Ontario with a credit score between 600 and 700 puts you in a unique position. You're on the cusp-out of the subprime bracket but not quite in the top-tier prime category. This calculator is specifically designed for your situation, factoring in the 13% Harmonized Sales Tax (HST) and the typical interest rates available for financing a new car with a fair credit profile.
A score in this range signals to lenders that you are actively managing your credit, but may have had some past challenges. The good news is that for a new vehicle, lenders are often more competitive, which can lead to better rates than you might expect. Use this tool to get a clear, data-driven estimate of your monthly payments and total costs.
How This Calculator Works for Your Scenario
This tool is calibrated for the realities of the Ontario market for buyers with a 600-700 credit score.
- Vehicle Price: Enter the sticker price of the new car. Our calculator automatically adds the 13% Ontario HST to this amount to determine the total price to be financed. For example, a $40,000 vehicle becomes $45,200 after tax.
- Down Payment: The amount of cash you're putting down. A larger down payment reduces the loan amount and can significantly improve your interest rate. If a down payment is a challenge, options are still available. For more information, read our guide: Your Down Payment Just Called In Sick. Get Your Car.
- Trade-in Value: The value of your current vehicle, which acts like a down payment.
- Interest Rate (APR): For a 600-700 credit score on a new car in Ontario, rates typically range from 7.99% to 14.99%. We suggest starting with a rate in the middle, like 9.99%, and adjusting to see the impact.
- Loan Term: The length of the loan in months (e.g., 72, 84). Longer terms lower monthly payments but increase the total interest paid.
Approval Odds & What Lenders Look For
With a credit score of 600-700, your approval odds for a new car loan are quite high. The focus for lenders shifts from a simple 'yes' or 'no' to determining the specific interest rate and terms they can offer. They will primarily assess:
- Income Stability: Verifiable and consistent income is crucial.
- Debt-to-Income Ratio: Your existing debt payments (rent/mortgage, credit cards, etc.) compared to your gross monthly income. Lenders want to see that you can comfortably afford the new payment.
- Credit History Details: They will look at why your score is in this range. A score recovering from a past issue like bankruptcy is viewed differently than a score with ongoing late payments. For a deeper dive into this, see The Truth About the Minimum Credit Score for Ontario Car Loans.
Example Scenarios: New Car in Ontario (600-700 Credit)
Let's analyze a common scenario: a new vehicle with an MSRP of $40,000. After 13% HST, the total price is $45,200. Assuming a 9.99% APR, here are some potential payment breakdowns:
| Down Payment | Loan Amount | Term (Months) | Estimated Monthly Payment |
|---|---|---|---|
| $0 | $45,200 | 72 | $825 |
| $2,500 | $42,700 | 72 | $779 |
| $5,000 | $40,200 | 72 | $734 |
| $5,000 | $40,200 | 84 | $656 |
Building Credit with Your New Car Loan
A car loan is one of the most effective tools for rebuilding your credit profile. Every on-time payment is reported to the credit bureaus (Equifax and TransUnion), which can steadily increase your score. This positions you for even better rates on future financing for cars, mortgages, or other credit products. Even if your credit history includes a major event like a bankruptcy, a car loan can be a powerful step forward. For those in this specific situation, our resource can provide more clarity: Essential Worker, Ontario. Bankruptcy? Your Car Just Got Promoted.
Frequently Asked Questions
What interest rate can I expect for a new car loan in Ontario with a 650 credit score?
With a 650 credit score, you are in the middle of the fair credit range. For a new vehicle in Ontario, you can generally expect interest rates between 8.5% and 13.5%. The final rate will depend on the specific lender, your income, the loan term, and the size of your down payment.
How is the 13% HST calculated on a new car purchase in Ontario?
The 13% HST is calculated on the final negotiated price of the vehicle. If a car's sticker price is $42,000 and you negotiate it down to $40,000, the HST will be 13% of $40,000, which is $5,200. This tax is added to the vehicle price before your down payment or trade-in is applied. The total amount to be financed would start at $45,200.
Will a larger down payment help my approval with a 600-700 credit score?
Yes, significantly. While your approval odds are already good, a larger down payment (10-20% of the vehicle price) reduces the lender's risk. This often results in them offering you a lower interest rate, which saves you a substantial amount of money over the life of the loan.
Can I get a new car loan with a 620 score if I have a recent bankruptcy?
Yes, it is possible. Many lenders in Ontario specialize in financing for individuals who are rebuilding their credit after bankruptcy. With a 620 score, you've already started that rebuilding process. Lenders will focus on your income stability and your payment history since the bankruptcy was discharged. To learn more about this process, our guide on Car Loan After Bankruptcy & 400 Credit Score 2026 Guide offers valuable insights.
Is it better to finance a new or used car with a 600-700 credit score?
Financing a new car often results in lower interest rates compared to a used car, even with the same credit score. Lenders see new cars as lower risk because they have a full warranty and no prior history. While the total loan amount will be higher for a new car, the more favorable financing terms can sometimes make the monthly payment difference smaller than you'd think.
