Introduction

Buying a used car in Ontario can be overwhelming. 

Between negotiating prices, understanding financing, and avoiding high-interest loans, many buyers end up paying thousands more than necessary. 

The good news is that if you know your options and follow a smart strategy, you can secure low-interest car loans in Ontario and even save money compared to buying from a dealership.

In this guide, we’ll cover:

1 - 3 main ways to finance a used car in Canada

2 - How to get affordable car loans ?

3 - Tips to reduce your APR

4 - Why private sales combined with financing networks often cost less than dealership financing ?

5 - How our partner dealership network can help you access cars and financing options near you

6 - FAQS

7 - Next Steps

1. 3 Main Ways to Finance a Used Car in Ontario

When it comes to financing a used car in Canada, buyers have three primary options:

1 - Dealership Financing – through licensed dealers

2 - Bank Loans – personal loans for car purchases

3 - Financing Companies – flexible options for private sales

Each option has pros and cons.

1.1 Dealership Financing

Dealerships often offer the lowest APR for qualified buyers, thanks to strong relationships with banks and lenders.

Pros:

Promotional low-interest rates (sometimes as low as 6.99%)

Quick approval and convenience

All-in-one purchase, financing, and registration

Cons:

Higher purchase price than private sales

Possible documentation or dealer fees

Limited negotiation flexibility

Even though APR may be lower, paying $2,000–$3,000 more for the car can offset savings.

1.2 Bank Loans

Banks provide personal loans for car financing, either secured or unsecured.

Pros:

Trusted financial institutions

Fixed monthly payments

Cons:

Higher interest rates on unsecured loans 

(13–17% when we consulted one of the largest banks in Canada)

May only finance newer cars

Less flexibility for private purchases

1.3 Financing Company

Specialized lenders can provide unsecured personal loans for cars, including for private sales.

Pros:

Flexible approval criteria

Pre-approval helps with negotiation

Can finance cars not sold at dealerships

Cons:

Rates may be higher than promotional dealer deals

Terms vary; credibility is essential

Tip: Our partner financing network (13 years operating in Canada) can help you get a personal loan for any used car…

2. Why Dealership Financing Often Offers the Lowest APR

Dealerships have volume deals with banks and lenders, promotional programs, and bundled offers, which sometimes result in the lowest interest rates. You can use these bargaining tips at the dealership to get the best price.

Example Scenario:

1 - Dealership,

2017 Honda Civic EX - $19,500 + Taxes 

Your monthly rate -  $19,500 x 13% tax = $22,035,

$22,035 x 6.99% x 84 months = $333/month,

2 - Private Sale + Financing,

The car owner will list the same car for upto $3000 lower because they don’t have a big office or lots of staffs to pay for,

Also there could be 10s or even 100s of similar cars for sale in Facebook Marketplace, Kijiji and Car Blitz,

So you can pitch 10-20 different owners $16,500 or even $15,500 and 1-3 of the car owners may agree,

For now lets say you negotiated and fixed the price at $16,500,

So $16,500 x 13% tax = $18,645

Our partner financing network starts interest at 9.99% (depending on approval and credit score),

$18,645 x 9.99% x 84 months = $309/month,

So this way you can save $24/month,

So in 84 months,

You will be able to save upto $2016 in this example scenario even though the interest rate is 9.99%,

Also the dealership might only have a few similar cars,

But in Facebook Marketplace, Kijiji and Car Blitz,

There could be 100s of similar cars at even better price and features,

Meaning you can save upto $2016 in financing and you can get maximum options as well…

3.1 Negotiating Private Sales

Check multiple listings (Kijiji, AutoTrader, Facebook Marketplace, Car Blitz)

Make offers $1,000–$2,000 below asking price

Use finance pre-approval to strengthen your offer

Be willing to walk away — better deals are out there

3.2 Pre-Approval Benefits

Pre-approval helps you:

Know exactly how much you can borrow

Negotiate confidently

Avoid over-borrowing

Our partner licensed financing network have over 13 years history in Canada and interest rate starts at 9.99%,

Click Here To See If You Will Qualify For Personal Loan To Finance Your Used Car Purchase (Any Car You Can Finance)

3.3 Closing the Sale

Complete a Bill of Sale

Transfer ownership via ServiceOntario

Arrange insurance before driving

Make safe payment arrangements

4. Tips to Get Low-Interest Car Loans

Improve your credit score by paying down existing debt

Make a larger down payment

Opt for shorter loan terms (48–60 months)

Use a co-signer if needed

These strategies work for both private sales and dealership financing.

5. Common Mistakes to Avoid

Ignoring hidden fees (dealer documentation, taxes)

Not reading financing fine print

6. How Our Partner Dealership Network Helps

Our partner dealership network provides:

Access to a variety of cars near you

Financing options through trusted lending partners with interest as low as 6.99% (depending on approval and credit score)

You can select the type of car and price range and you will get access to similar cars sold by our partner dealership networks near you…

(It’s like a search engine for dealership cars)

See Cars Available Near You Sold By Our Partner Dealership Networks Near You

7. Frequently Asked Questions (FAQ)

Q: Can I finance a private-sale used car in Ontario?

A: Yes, using partner financing networks or banks.

Q: How low can APR realistically go?

A: Promotional dealer rates can be as low as 6.99%. Partner financing usually ranges from 9.99% or more 

Q: Should I get pre-approved?

A: Yes — it sets your borrowing limit and helps with negotiation.

Q: What if my credit isn’t perfect?

A: Use a co-signer, make a larger down payment and our partner financing network is really flexible

8. Next Steps

Apply for pre-approval with our financing partner…

Search for private-sale or partner dealership cars

Negotiate confidently with your pre-approved amount

Close safely with proper paperwork and insurance

Check Your Financing Options and Pre-Approval in Ontario

We truly hope you got a lot of value in this content. Thanj you so much for taking the time to read this post and have a wonderful day ahead