On this page (12 questions)
- Can you get a car loan with low or rebuilding credit in Ontario?
- What credit score is considered low or non-prime in Ontario?
- Can you get a car loan with a 500 credit score?
- Does applying for a car loan hurt your credit?
- What interest rate comes with a non-prime car loan?
- How much income do you need to finance a car in Ontario?
- Do you need a down payment for a non-prime car loan?
- Bank, dealership, or financing concierge: what is the difference?
- What protections do Ontario car buyers have?
- Will a car loan rebuild your credit?
- Can you refinance a non-prime car loan later?
- How does Simply Drive work for people rebuilding credit?
Many people search for "bad credit car loans." Simply Drive uses the term non-prime instead, because credit is a situation, not a label for a person. This guide answers the real questions Ontarians ask when their credit score is lower than they would like and they still need a reliable vehicle.
This is general education, not financial or legal advice. Any rate or payment mentioned is on approved credit and subject to lender approval.
Can you get a car loan with low or rebuilding credit in Ontario?
Yes, financing a vehicle with a lower or rebuilding credit score is possible in Ontario, because some lenders specialize in exactly this. These non-prime lenders look at the full application rather than the credit score on its own. Steady income, time at a job, a down payment, and a sensibly priced vehicle all carry weight.
What is accurate to say is that the options are narrower and the cost of borrowing is usually higher than the lowest advertised bank rates. What cannot be said honestly is that approval is guaranteed. Approval always depends on a lender's review of the specific situation.
Definition: Non-prime Non-prime describes lending to people whose credit sits below the prime range that major banks reserve for their best rates. It is a lending category, not a judgment about a person. Simply Drive uses "non-prime" and "rebuilding credit" rather than "subprime" or "bad credit."
What credit score is considered low or non-prime in Ontario?
In Canada, scores from 300 to 559 are generally considered poor, and there is no separate Ontario scale. Credit scores run from 300 to 900 nationwide, and lenders read the bands roughly as set out below.
The numbers come from Equifax. According to Equifax, a score of 660 and up is generally seen as acceptable or lower risk, while scores below that may make it harder to qualify for the best terms. TransUnion uses its own model, so the same person can have slightly different scores at each bureau.
Source: credit score bands per Equifax Canada. Where you land is only one of several things a lender weighs.
Can you get a car loan with a 500 credit score?
A car loan with a credit score around 500 is often possible through non-prime lenders, because a score in that range, while in the poor band, is not a hard cutoff on its own. These lenders weigh income, employment stability, and the down payment alongside the score, so a steady job and a sensible vehicle can carry an application that the score alone would not.
The realistic trade-off is in the cost and the terms. A score near 500 usually means a higher rate and a closer look at affordability than a higher score would. It does not mean the door is closed, and it does not mean approval is guaranteed either. The outcome depends on the lender's review of the whole picture, on approved credit and subject to lender approval.
Does applying for a car loan hurt your credit?
A single car loan application causes a small, temporary dip from the hard inquiry it creates, while applying to many lenders separately over a long stretch can add up. The hard inquiry is the record of a lender checking a credit file as part of a decision, and it is a minor factor compared with payment history.
This is one quiet advantage of applying through a concierge. Instead of a person submitting applications at several lenders over weeks, one application is submitted across a network of lenders, which keeps the credit-file footprint contained. Checking your own score, by contrast, is a soft inquiry and does not affect the score at all, so monitoring where you stand is free of that downside.
Definition: Hard inquiry vs soft inquiry A hard inquiry happens when a lender checks your credit as part of an application, and it can cause a small, short-lived dip. A soft inquiry, such as checking your own score, has no effect on the score. Knowing the difference takes the fear out of monitoring your own credit.
What interest rate comes with a non-prime car loan?
Non-prime car loan rates are higher than prime bank rates, and the exact figure depends on the lender's review of the whole application, so no rate can be promised in advance. Lenders set a rate to reflect the risk they take on, which is why a lower credit profile usually carries a higher rate.
For market context, industry figures compiled from Statistics Canada data put the average new-car loan rate near 6.5 percent in late 2025, with used and non-prime rates running higher. The figure for a specific person depends on credit tier, loan term, vehicle age and price, and down payment, on approved credit and subject to lender approval.
Definition: APR vs interest rate The interest rate is the cost charged on the money borrowed. The APR, or annual percentage rate, is the broader figure that folds in the interest rate plus mandatory lender fees, so it reflects the true cost of borrowing. The Financial Consumer Agency of Canada points to APR as the better number for comparing offers, and Canadian lenders are required to disclose it in the loan agreement.
How much income do you need to finance a car in Ontario?
Most non-prime lenders want to see steady, verifiable income and a job history of at least a few months, rather than a single fixed dollar figure. As a working baseline, Simply Drive looks for at least 2,000 dollars a month in income, the ability to get insurance, and a valid Ontario G or G2 licence.
Lenders care about stability as much as the amount. Someone who has been at the same job for a year reads differently from someone who started last week, even at the same pay. If the time-on-the-job requirement is not met, a co-signer based in Ontario can sometimes bridge the gap.
Do you need a down payment for a non-prime car loan?
A down payment is not always required, but it usually helps, because it lowers the amount borrowed and reduces the lender's risk. A larger down payment can widen the options and, in some cases, improve the terms offered.
The reason is the loan-to-value ratio. When more of the vehicle's price is covered up front, the loan covers less of the value, which lenders tend to view more favourably. A trade-in with positive equity can play the same role as cash down.
How much helps is less about hitting a magic number and more about lowering risk in a visible way. Even a modest down payment signals commitment and shrinks the financed amount, which trims both the monthly payment and the total interest paid over the term. For someone weighing whether to put money down or keep it as a cushion, seeing the full cost both ways, which Simply Drive lays out before signing, makes the trade-off concrete rather than abstract.
Definition: Loan-to-value (LTV) Loan-to-value is the size of the loan compared with the value of the vehicle. A 5,000 dollar down payment on a 20,000 dollar car means the loan covers 15,000 dollars, or 75 percent of the value. Lower LTV generally reads as lower risk.
Bank, dealership, or financing concierge: what is the difference?
The three differ mainly in how many lenders they reach and how the process is run. A bank lends its own money and sets its own bar. A traditional dealership sells from its own lot. A financing concierge submits one application across many lenders and sources vehicles across many dealers. The table compares them in plain terms.
Simply Drive operates as the concierge in that last column. It submits across our network of lender partners and sources across our dealer-partner network, so a single application reaches many doors at once.
What protections do Ontario car buyers have?
Ontario car buyers who purchase from a registered dealer are covered by a set of protections enforced by OMVIC, the provincial regulator for vehicle sales. According to OMVIC, its mandate is to maintain a fair and informed marketplace and to protect the rights of consumers.
In practice, buying from an OMVIC-registered dealer brings several concrete protections. Dealers must advertise an all-in price, so the advertised number cannot have extra fees piled on top beyond tax, licensing, and options the buyer asked for. Dealers must disclose a vehicle's history and condition. And there is a compensation fund that can help buyers who suffer a financial loss in a trade with a registered dealer. Confirming that whoever you buy from is registered is a simple, worthwhile step.
Definition: All-in price (OMVIC) Under Ontario's rules, a registered dealer's advertised price must include all fees, with the only permitted add-ons being applicable tax, licensing, and options the buyer specifically requested. The price on the ad is meant to be the price you actually pay before tax and plates.
Will a car loan rebuild your credit?
An auto loan can contribute to rebuilding credit when every payment is made in full and on time, because the lender reports that payment history to Equifax and TransUnion. The condition matters: on-time payments help, and missed payments hurt.
Simply Drive is not a credit-repair service and does not promise that a score will rise by any amount. What is fair to say is that a reported loan paid as agreed adds positive history to a file over time. Pairing it with low credit card balances and consistent payments across the board is how that history tends to build.
Can you refinance a non-prime car loan later?
Refinancing at a better rate becomes an option for some people after a stretch of on-time payments, though it is never a certainty for any individual. As a credit profile strengthens, a person may qualify for terms they could not get at the start.
This is best treated as a possible door rather than a scheduled event. Some borrowers refinance once their situation improves; others do not, depending on rates, the vehicle's value, and their own circumstances. There is no fixed timeline that applies to everyone, and any new financing is again on approved credit and subject to lender approval.
How does Simply Drive work for people rebuilding credit?
Simply Drive is an education-first concierge, so the process is built to explain each step and keep every dollar visible, rather than to push a sale. The role is to do the legwork and present clear options.
The flow is straightforward. A person shares their situation, income, and preferences. Simply Drive submits the application across our network of lender partners and reports back on what is available, including the rate, term, and the payment it works out to, on approved credit and subject to lender approval. Vehicles are then sourced across our network of dealer partners to fit the approval and the budget, with the full cost broken out line by line. The recommendation always comes with the reasoning, so the choice stays with the person.
The free assessment is a no-pressure way to see what financing paths may be available, with no contact details required to start.
Related reading
- Auto financing after a consumer proposal
- Car loans during a consumer proposal
- Car loans for newcomers to Canada
- Buying your first car with no credit history
- How Simply Drive works
A calm next step
If a reliable vehicle is the goal while you rebuild, the assessment explains your options without pressure. It is free, it does not promise approval, and there is no obligation to move forward.
Simply Drive is not a bank, credit union, financial advisor, financial planner, or lender. This page is general education and not financial or legal advice. Any rate or payment is on approved credit and subject to lender approval.
Author: Noel Ariyaratnam, Principal, Ariya Automotive Inc. o/a Simply Drive, OMVIC Reg. #5860473. Last updated June 16, 2026.