What a new car loan costs you
- Sales tax on the full purchase price in most provinces.
- Immediate depreciation, often the largest single year of value loss.
- New fees: documentation, registration, lien registration, and sometimes delivery.
- A new credit application, which can reset your file just as it was improving.
What refinancing costs you
- No sales tax, because nothing is being sold.
- No depreciation hit, because the vehicle does not change hands.
- Usually no lender fee, or a small administration fee disclosed up front.
- One credit inquiry on application, and only if you proceed.
When a new loan does make sense
If the vehicle no longer fits your life, needs repairs beyond its value, or you have genuine negative equity that cannot be refinanced, replacing it may be the right call. Run the refinance numbers first so you know the difference.
How the refinancing process works
Refinancing is not a sale and it is not a new purchase. Your current lender is paid out in full, a new loan is registered against the vehicle you already own, and your payments restart on the new terms.
- Apply online with your VIN, the vehicle details and a rough idea of your current loan balance.
- Your finance manager requests a payout statement from your current lender.
- Documents arrive by DocuSign. Review the rate, term and payment, then sign from home.
- The old loan is paid out, the new loan begins, and your payment drops to the new amount.
Save thousands
Save thousands by refinancing your vehicle anywhere in Canada.
Free to apply, no obligation, and no credit check to pre-qualify.
Frequently asked questions
Almost always, because there is no tax, no trade-in loss and no new vehicle depreciation.
Yes. That is a cash-out or equity refinance, and it is priced like an auto loan secured against the vehicle.
It sets a new term, which you choose. Pick the shortest term you can comfortably afford.