Know The Terms

Before signing any documents, understand the following terms because financing has a language of its own.

Additional Products or Services

Products or services that the dealer may offer in a sale, financing, or lease. Examples include extended service contracts, credit insurance, and guaranteed auto protection (GAP). These products and services are optional. Get the costs and terms of any additional products and services in your contract, and sign only for the specific products you want.

Amount Financed

The dollar amount of the car loan provided to you.

Annual Percentage Rate (APR)

The cost of auto loan expressed as a yearly rate. You may be able to negotiate this figure.
Factors that influence your APR: Your credit history, current finance rates, dealers's compensation, competition, market conditions, and special offers are among the factors that affect your APR. Try to negotiate the lowest APR just as you negotiate the price of the vehicle.


The bank, finance company or credit union that buys the contract from the dealer.

Auto Loan Insurance

Optional insurance that pays the scheduled unpaid balance if you die or the scheduled monthly payments if you become disabled. The cost of optional auto loan insurance must be disclosed in writing. If you decide you want it, you must agree to it and sign for it.

Credit Report

Document that includes information on where you live, how you pay your bills, and whether you have been sued, or have filed for bankruptcy. Nationwide consumer reporting agencies sell the information in your report to creditors, insurers, employers, and other businesses that use it to evaluate your applications for credit, insurance, employment, or renting a home.

Credit Score

A number that reflects the credit risk you present based on information in your credit file. The better your history of credit, the higher your score. Your credit score may be used to help decide the rate and other terms you are offered.

Down Payment

The initial amount you pay to reduce the amount you finance.

Guaranteed Auto Protection (GAP)

Optional protection that pays the difference between the amount you owe on your vehicle and the amount you would get from your insurance company if the vehicle is stolen or destroyed before you have paid off your auto loan obligation.

Monthly Payment Amount

The dollar amount due each month on the car loan.


If you do not make timely payments on a vehicle, your creditor may have the right to repossess it without going to court or warning you.

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Auto Loan Benefits

  • Fastest way to improve your credit..
  • Get your dream vehicle.
  • improve your reputation with banks and lenders.
  • Re-establish good credit.
  • Access to better interest rates with future loans

Consumer Protection Act

This Act requires that before you are obligated to purchase or lease a vehicle, the following information must be provided to you in writing: Annual Percentage Rate, Total Cost of Financing,Total Loan Cost, Implicit Finance Charge.

Motor Vehicle Protection Act

Any dealer must disclose to customers in a written document all the information about the vehicle's history and condition.
For example, they must tell you if the vehicle was a rental or registered out of province, or has had previous body damage over $3,000. If you are not provided with this information when you are asked to sign a loan or lease, you have rights under the Consumer Protection Act and the Motor Vehicle Dealers Act, 2002. These rights may assist you in not proceeding with the transaction or limiting the amounts you may be required to pay.
The Ontario Motor Vehicle Industry Council can assist you in better understanding your rights.