What credit score do you need for a car loan? In Canada, the honest answer is that approvals happen at almost every score, from the low 500s up. What the score decides is your interest-rate tier, and the gap between tiers is measured in thousands of dollars, not bragging rights. A credit score in Canada is a three-digit risk estimate, roughly 300 to 900, computed by Equifax and TransUnion from your payment history, balances, credit age, and inquiries. At Ontario Car Financing I break the market into three working tiers: prime, near-prime, and subprime. I'm Tim Phillips, and after 15-plus years in Ontario's car business, most of it in the finance office, I can tell you the score question buyers agonize over is the wrong one. The right question is: which tier am I in, and what is that tier going to cost me? At the finance desk, I approved files at 780 and files at 510 in the same afternoon. The 510 got approved too. The difference was the price, and nobody had explained that to either of them. Approval is a number problem, not a moral one. Before you apply anywhere, know your number, know your tier, and run the real cost through the payment calculator. If your score is bruised, the full playbook is in Bad Credit Car Loans in Ontario.
What credit score gets you approved, and at what rate?
Here is the working map Ontario lenders sort files into. Two warnings before you read it. First, these are estimates: score bands and rate ranges are dealer and broker aggregates, lenders overlap, and your income, down payment, and vehicle move you within and between rows. Second, rates are always ranges. Anyone quoting you a single "subprime rate" before seeing your file is guessing or selling.
| Rough score band | Tier | Typical APR range (estimate) | What it usually takes |
|---|---|---|---|
| ~700+ | Prime | ~5% to 9% | Clean file; banks and captive lenders compete for you |
| ~600 to 700 | Near-prime | ~9% to 15% | Some blemishes; steady income matters more |
| ~520 to 600 | Subprime | ~11% to 30%+ | Provable income, stability, often a down payment |
| Below ~520 | Deep subprime | Up to the 35% legal cap | Income-first underwriting, larger down payment, older used vehicle |
Bands and ranges above are labeled estimates from published dealer and broker aggregates. Two verified guardrails frame them: the national average car-loan rate sat around 6.5 percent in late 2025, and since January 1, 2025 the federal criminal interest cap is 35 percent APR, all fees included, with no exemption for car loans. Any consumer car loan priced above that line is not a bad deal, it is an illegal one.
Can you get a car loan with a score below 600?
Yes, routinely. Below roughly 600 you move from score-first underwriting to income-first underwriting. A subprime lender assumes the score is bruised; what they actually verify is whether the payment fits your real life: gross monthly income, how long you've been at your job, your address stability, and what your last six to twelve months of credit conduct look like. Recent behaviour outweighs old damage. A discharged bankruptcy from three years ago with twelve clean months since reads better than a 640 score with two fresh late marks.
Tim's take: the file I saw approved dozens of times was a 540 score, a full-time job with two years of tenure, and $2,000 down on a sensible used car. The file that struggled was a 660 with three maxed cards and a new job every four months. Lenders lend against your life, not just your score. If your score is low but your life is steady, you have more leverage than you think.
What subprime lenders check, document by document, and how to package a rough file properly is covered in the bad-credit approval guide. What to bring with you is in Documents Needed for a Car Loan in Ontario.
Why your tier matters more than your approval
The payment is the distraction; the total cost is the truth. Take a $25,000 used car financed over 60 months. In round terms, a prime borrower near 7 percent pays roughly $4,700 in interest. A subprime borrower near 20 percent pays roughly $14,700. Same car, same term, about $10,000 apart, and the monthly payments are only a couple hundred dollars different, which is exactly why the finance office talks payment and never total cost. Published broker math tells the same story: on a $20,000 five-year loan, a 760-plus borrower may pay about $4,300 in total interest versus $13,900-plus for a borrower in the low 600s, per Hello Motors' 2025 aggregate, an estimate but a fair illustration.
The stakes keep growing because the loans keep growing. Equifax Canada put the average new auto loan at $35,586 in Q2 2025, up $1,567 in a year, with total auto debt up 7.7 percent year over year. Bigger principal multiplies every point of APR. Run your own numbers in the calculator before any desk runs them for you, and see the full worked examples in The Real Math.
How to move your score before you apply
If you are within about 20 points of the next band, a month or two of deliberate work can be worth thousands. In rough order of speed:
- Pull your own reports first. Your Equifax and TransUnion reports are free and pulling them is a soft inquiry that never touches your score. You are looking for errors: paid collections showing open, accounts that aren't yours, wrong late marks.
- Dispute errors immediately. Corrections can land in weeks and jump a file a full tier. Nobody at a dealership is paid to do this for you.
- Pay revolving balances down below about a third of their limits. Utilization is the second-heaviest factor and the fastest one to move.
- Stop applying for credit. Let recent hard inquiries age. Scattered applications across months read as risk.
- Do not close old cards. Credit age helps you; closing your oldest account before a car application is a classic own goal.
Fleece alert: some desks will tell a low-score buyer "your credit is too rough to shop around, take this rate while it's here." That line exists because comparison shopping is where their rate markup dies. Credit scoring models generally treat multiple auto-loan hard pulls inside a short window as one rate-shopping event, so getting two or three real quotes costs you almost nothing and can save you thousands. The rest of that playbook is in How the Game Works.
What if you have no credit score at all?
No file is not the same as a bad file, but lenders treat both as uncertainty. Newcomers to Canada, young first-time buyers, and cash-only households all hit this wall. The fix is the same income-first packaging as subprime: provable income, a reasonable down payment, and sometimes a cosigner to anchor the file. Some lenders have dedicated newcomer programs that accept foreign credit history or shorter Canadian tenure. A first car loan that reports to both bureaus is also one of the fastest ways to build a file from nothing, which is the honest upside buried in all of this: structured right, the loan itself is the rebuild. How scores are built and rebuilt is the subject of the full Credit 101 hub.
One last calibration point so the tiers don't scare you: the average Canadian credit score is around 760, and roughly 85 percent of Canadians score 650 or better, per FICO distribution data. If you're below that, you are not a lost cause, you are simply in a tier, and tiers can be climbed. That's the Ontario Car Financing position on the whole subject: get approved without getting fleeced, then use the loan to make sure the next one is cheaper.