In AB, what should I know about minimum down payment for car loans?

In Alberta, there is no specific provincial or federal legislation that dictates a universal minimum down payment for car loans. Instead, this crucial figure is entirely at the discretion of individual lenders, who assess a multitude of factors to determine their risk exposure. These factors typically include your credit score, the vehicle's make, model, and age, the proposed loan term, your income stability, and your overall debt-to-income ratio. In the current 2025 Canadian market, characterized by potentially tighter lending conditions and a focus on responsible credit, many financial institutions are increasingly preferring higher down payments to mitigate risk and ensure the borrower's long-term affordability.

For consumers, providing a larger down payment offers significant advantages. It directly reduces the principal amount borrowed, which translates into lower overall interest paid over the life of the loan and more manageable monthly payments. A higher down payment also improves your Loan-to-Value (LTV) ratio, making your application more appealing to lenders and often qualifying you for more competitive interest rates and favourable loan terms. This strategy not only builds equity faster and provides a buffer against immediate vehicle depreciation but also significantly enhances your chances of loan approval, particularly if your credit history has some imperfections.