0% Financing on Cars in Canada | April 2024 Offers (2024)

When shopping for a new car, you’ll come across advertisem*nts with extremely low-interest rates – even 0% car financing deals. Finding a low or 0% interest car deal can be a great way to save, especially considering that, according to AutoTrader’s Price Index, the average price for a new car in Canada has increased by as much as 19% by the end of 2023 compared to 2022.

How do these offers work, and are they too good to be true? Before signing on the dotted line and driving off the lot, it’s best to learn more about 0% financing. Plus, find out who currently offers 0% financing in Canada.

Who is offering zero percent financing on cars in Canada?

In Canada, dealerships and loan brokers can help you with 0% financing promotional deals. However, you should know that despite the splashy advertisem*nts, 0% financing deals are hard to find these days unless you meet specific criteria.

To find the lowest rates available on the market, whether that’s 0% financing or slightly higher, one option is to apply to a loan search platform like Loans Canada. Loan search platforms partner with many dealerships to help you find the best offer for your next vehicle purchase.

Latest 0% financing deals on cars in Canada

Check out the table below to see who offers low rate or 0% financing on cars in Canada, this month. We also list the lowest financing deals currently available from popular car brands.

Offers last verified on Apr. 2, 2024 and expire on Apr. 30, 2024 (where an expiration date is disclosed). Mitsubishi offers expire on Jul. 2, 2024. Offers are on approved credit, vary by region and may have other conditions.

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0% financing in one province, such as Ontario, may not be available in other provinces

The types of financing offers advertised by dealerships will depend on where you live. So the low or 0% financing car deals at Ontario dealerships could be different from the deals offered at dealerships in Alberta or BC. Plus, the deals you qualify for will depend on factors like your credit score, income and whether you have a down payment.

When you’re ready to shop for your next car, check with your local dealerships to find out what financing offers are available at that time.

What car companies are offering 0% financing in Canada?

Currently, there are three car brands offering 0% financing – Ford, GMC and Chevrolet, all of which are offering 0% financing on select models. This research is based on a review of financing offers for April 2024 from 24 car brands in Canada.

Where can you get 0% financing on trucks?

The car brands that are currently offering 0% financing offers are Chevrolet (0% for the 2024 Silverado 1500, on select trims), GMC (0% for the 2023 Sierra 1500, on Pro and Elevation models) and Ford (0% for the 2023 F-150 Lightning, on select models).

What does 0% financing mean on a car loan?

A 0% financing offer allows you to borrow money to buy a vehicle without having to pay interest and financing fees, which combined is known as the annual percentage rate (APR). Dealerships mostly offer this type of financing as a way to sell more cars. It is usually reserved for customers with excellent credit scores (usually above 700).

Banks or other lending institutions do not typically offer 0% financing on cars in Canada because these institutions have nothing to gain by offering this type of financing. On the other hand, a dealership will be more willing to offer 0% car financing deals since it gets you driving off the lot in one of their vehicles and this helps move inventory.

0% financing sounds too good to be true. What’s the catch?

At first glance, 0% financing on a car is exactly as it appears: You purchase a new car at the agreed-on price and then make monthly payments on the debt, with no interest for a set number of months. However, keep these points in mind:

• 0% interest may only be offered for part of the loan term
• To be approved, you’ll need a spectacular credit score (above 700)
• Negotiating the car price can be difficult
• 0% car financing deals are only available for certain makes and models
• You may not get as much money for your trade-in vehicle
• The loan structure will likely be set in stone

Pros and cons of car deals with 0% finance

Pros

• 0% interest. Paying no interest on your car loan can save you hundreds or thousands of dollars in the long run (depending on your loan amount).
• One-stop shop for financing. Dealerships offer 0% financing in Canada on car loans so you can drive off the lot in your new vehicle with a single transaction.
• Faster repayment. You’ll usually be able to pay 0% financing car loans off faster than you would with a traditional car loan (because terms are often shorter and there’s no interest).
• Lets you upgrade your car choice. You may be able to afford a more expensive vehicle or luxury upgrades such as a sunroof or alloy wheels with a 0% car loan.

Cons

• Only available from dealerships. 0% car loans are typically only offered by dealerships, which means you can’t get them from the bank or another lender.
• More limitations. You may only be able to get financing for certain kinds of vehicles with 0% car loans, such as those that the dealership is trying to move off the lot.
• More difficult to qualify. You can only qualify for a 0% car finance offer if you have good to excellent credit and a high income.
• Higher monthly payments. 0% financing often comes with shorter terms to reduce the risk that you’ll default (which means higher monthly payments).
• Risk that you’ll pay more. You could end up paying a higher price for your vehicle to make up for the lower interest rate (so your dealer still cuts a higher profit).
• May be a limited offer. You may only get 0% financing for a portion of your loan amount or as an introductory offer for a limited amount of time.

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If you don’t qualify for 0% financing in Canada or would like to consider alternatives, you can explore your options here.

Plans to get a new vehicle

In the recent Finder: Consumer Sentiment Survey Q2, 15% of respondents plan to take out a car loan in the next three months.

More than a third of Canadians (35%) who plan to buy a vehicle in the next three months expect to make the purchase at a new car dealership.

How to get 0% financing on new cars in Canada

To get 0% car financing in Canada, you’ll need to do your homework. Follow these steps to get started:

1. Check your credit score. Your first step in qualifying for a 0% car loan is to make sure your credit score is in excellent shape. You can do this by requesting a copy of your score from a major credit bureau such as Equifax or TransUnion.
2. Shop around. Decide which vehicle you want to buy in advance and then shop around with a number of dealerships to compare prices. This makes sure you find a dealership that’s offering a reasonable price for the vehicle you’re interested in.
3. Call the dealership. Call the dealership you choose to find out if it currently offers 0% financing on any models. If not, you can make your way down the list of dealerships you’ve compared until you find one that offers 0% car financing.
4. Gather your documentation. When it’s time to visit the dealership, you’ll want to bring along information about your credit score and monthly income. If your credit score is low, you likely won’t qualify for 0% financing and may need to explore other options.
5. Negotiate the deal. Work with your dealer to get the best deal possible on your loan. And keep in mind that there are always other options if your dealer won’t budge on certain conditions.

Red flags to watch out for with 0% car finance deals

There are a few red flags you need to watch for when shopping around for 0% financing in Canada:

• False promises. You should steer clear of lenders that offer 0% financing without checking your credit score or financial details.
• Higher vehicle prices. Avoid lenders that offer 0% car financing deals but have much higher vehicle prices than other dealerships in your local area.
• Introductory offers. Keep an eye out for deals that offer 0% financing for only a short introductory period but then start charging interest mid-way through your term.
• Bad customer reviews. Double-check online reviews for the lender you want to go with before you sign a loan contract to make sure there are no major issues.

How to get a good deal without a 0% interest car loan

There are a number of things you can do to get a better offer on your next vehicle, even if you don’t qualify for 0% financing deals, including:

• Get pre-approved. It makes sense to get pre-approved for a car loan to find out how much you have to spend before you start shopping. However, the pre-approval offered by car loan lenders in Canada is not the same as mortgage pre-approval. Instead of asking for income and debt — and then confirming these details to confirm the exact amount you are able to borrow — most car loan lenders will offer pre-approval as a way to get you into their customer database. You will not be able to use the amount or terms as a bargaining chip while shopping for a vehicle until you go through the formal process of applying for a car loan using a hard credit check.
• Compare prices. Compare different lenders to find out what rates and loan amount you can qualify for. Once you know how much you have to spend, shop around to find any low or 0% interest car deals on offer for the vehicle you want.
• Shop for a used vehicle. Check out online offers for used vehicles or ask to see the inventory of used cars with your dealer. Just be aware that it can be more difficult to get financing if the vehicle is older or has high mileage. Learn more about buying a used car.
• Look for sales or special offers. Wait for sales such as employee-pricing events or cash-rebate offers to save the most money on your car. This will let you drive off the lot with the best deal possible.
• Improve your credit score. Work on improving your credit to make sure you can qualify for the lowest interest rates available. Start by finding out what credit score you need to get approved for a car loan.

Can I get 0% financing if I have bad credit?

Car dealers with 0% financing won’t offer this financing deal to borrowers with bad credit, as the dealer will consider the loan to be too risky.

The best way to get around this is to improve your credit score so that lenders see you as a reliable customer. If you need to purchase a vehicle using a car loan before you can improve your credit score then be prepared to pay higher interest rates.

Bottom line

Getting 0% car financing deals can save you money on interest rates and let you pay your car loan off faster. The main downside of these loans is that they come with strict eligibility requirements and are usually only offered by car dealerships. But even if you can’t qualify for 0% financing in Canada, you can still lock in a low interest rate by carefully comparing your options and getting prequalified with a variety of lenders.

Frequently asked questions about 0% financing

• Offers of 0% financing are much less common in Canada because of the shortage of new and used cars. Brands that have recently offered 0% financing or slightly higher rates include Mitsubishi, Ram, Chevrolet and GMC.

• That depends on your lender. A down payment can help you pay your loan back much faster, and it also shows your lender that you have savings. You can also make sure your car doesn't depreciate beyond what it's worth by making a large down payment.

• Almost never. If you're offered a 0% car loan for a used car, you should read the fine print to see if there are any extra costs or fees to make up for the lack of interest being charged. It's also possible that your dealer is overcharging you for the vehicle to make up for the 0% interest rate.

• It's possible to get approved for 0% financing on new cars in Canada if you have a strong credit score and meet other eligibility criteria. In the current environment, however, it's rare for dealerships to offer 0% financing deals.

• You'll usually need a credit score of at least 700 even to be considered for 0% financing in Canada. This number may be even higher depending on which lender you apply with.

• It's difficult to get 0% financing on cars in Ontario today because of the ongoing shortage of new and used cars. If you're looking for 0% financing deals, your best bet is to apply to a car loan broker or visit your local dealerships to discuss your options.

• APR is an acronym for Annual Percentage Rate, which is the standard way of calculating interest plus fees on a car loan. APR refers to the cost of a loan, including both interest and fees, that would accrue over the course of a year (365 days).