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

In Quebec, there is no specific provincial law or federal regulation that mandates a universal minimum down payment percentage for car loans. Instead, the requirement for a down payment is primarily determined by individual lenders-banks, credit unions, and captive finance companies-as part of their comprehensive risk assessment. While 0% down payment options exist, particularly for well-qualified buyers and new vehicles, lenders typically prefer and often require a down payment, commonly ranging from 5% to 20% or more, depending on factors like the borrower's credit score, the vehicle's age and value, the loan term, and the lender's overall risk appetite.

A higher down payment significantly benefits the consumer by reducing the principal amount financed, which in turn lowers monthly payments and the total interest paid over the life of the loan. It also decreases the loan-to-value (LTV) ratio, making the loan less risky for the lender and potentially qualifying the borrower for more favourable interest rates, especially in a 2025 market environment characterized by potentially higher borrowing costs. Furthermore, a substantial down payment helps mitigate the risk of negative equity, where the car's value depreciates faster than the loan balance, and can improve approval chances for those with less-than-perfect credit. While Quebec's consumer protection laws, overseen by the Office de la protection du consommateur (OPC), ensure transparency in lending, the down payment amount remains a commercial decision between the borrower and lender, influenced by market dynamics and individual financial profiles.