Car Loan Agreement Template (Canada)

Updated on August 9, 2026

A car loan agreement in Canada is a secured loan where the borrower owns the vehicle from the start, and the lender's security interest is registered under the relevant province's Personal Property Security Act (PPSA) rather than through a US-style title lien or a UK-style hire-purchase ownership structure.

Consumer lending disclosure in Canada is provincial, not federal — each province has its own consumer protection or cost-of-borrowing legislation setting out what a lender must disclose. What is federal, and applies everywhere, is the Criminal Code's cap on the criminal rate of interest: as of January 1, 2025, no lender may charge or even advertise credit above 35% annual percentage rate. This template is built around those two layers rather than a single national disclosure regime.

1 of 19 blanks filled

Tap any highlighted blank in the document below and type straight into it.Free — no sign-up, no watermark

Choose your version

Borrower type and purpose

Car Loan Agreement

This is a consumer loan for personal, family or household use. Provincial consumer protection and cost-of-borrowing disclosure rules apply.

This Car Loan Agreement is dated and is entered into between , of ("Lender"), and , of ("Borrower"), located in .

1. Vehicle

Make:
Model:
Year:
VIN:

2. Credit disclosure

Principal amount:
Interest rate (APR):
Cost of borrowing:
Total amount payable:

3. Security

As security for repayment, Borrower grants Lender a security interest in the Vehicle. Lender will register this security interest under the Personal Property Security Act (or, in Quebec, the applicable hypothec regime) of .

4. Repayment

Borrower shall repay the principal amount and interest in instalments of each, beginning on .

5. Interest rate compliance

The interest rate stated in this Agreement does not exceed the maximum criminal rate of interest permitted under the Criminal Code of Canada.

6. Default

An Event of Default occurs if Borrower fails to make a payment when due, breaches a material term of this Agreement, or provides false information in connection with the loan. Before exercising any remedy, Lender shall give Borrower written notice of the default and days to remedy it.

Lender

Date:

Borrower

Date:

Disclose the loan terms provincial law requires

Most provinces require a lender to disclose the principal amount, interest rate, cost of borrowing (total interest and fees over the loan term), the annual percentage rate, and the repayment schedule before the borrower signs. The specific disclosure statute is provincial — for example, Ontario's Consumer Protection Act, 2002 sets out cost-of-borrowing disclosure rules for consumer loans — so the applicable rules depend on where the borrower is located. This template puts the disclosure figures in one place so they're easy to complete correctly regardless of province.

Register the security interest under the right provincial PPSA

Canada has no single national lien registry. Each common-law province runs its own Personal Property Security Act registry — Ontario's PPSR, British Columbia's Personal Property Registry, Alberta's Personal Property Registry, and equivalents elsewhere — while Quebec uses its own civil-law hypothec regime registered through the RDPRM. A lender financing a vehicle needs to register its security interest in the correct provincial (or Quebec) registry based on where the vehicle or the debtor is located, not assume one filing covers the whole country. This template states the registration step explicitly rather than a generic 'perfect the security interest' phrase.

Never exceed the federal criminal interest rate cap

Section 347 of the Criminal Code makes it a criminal offence to enter into an agreement to receive interest at a criminal rate — and, since amendments in force from January 1, 2025, that cap is 35% annual percentage rate, down from the previous 60% effective annual rate. The amendments also extended the offence to advertising credit above that rate, not just charging it. This is a federal, national cap that applies regardless of province — unlike the disclosure rules, which are provincial.

Confirm the borrower's status

Provincial consumer protection statutes generally apply to a loan made to an individual borrowing primarily for personal, family, or household purposes — not to a loan made to a corporation, or to an individual borrowing primarily for business purposes. This template makes the borrower's status an explicit field, since a business car loan to a company doesn't carry the same provincial consumer disclosure duties.

Clause-by-clause guide

Consumer/business statement: States whether this is a consumer loan carrying provincial disclosure duties, or a business loan that doesn't.
Credit disclosure: Sets out the principal, interest rate, cost of borrowing, APR and repayment schedule together.
Vehicle and security: Describes the vehicle and states the specific provincial PPSA (or Quebec RDPRM) registration to be made.
Repayment: Sets the instalment schedule.
Interest rate compliance: States that the interest rate does not exceed the federal criminal rate of interest cap.
Default: Sets out what constitutes default and the notice the lender must give before acting on it.

Canadian compliance checklist

This covers a consumer loan to an individual for personal use; a business borrower changes the position, and disclosure rules vary by province.

Confirm the interest rate is below the federal criminal rate cap
As of January 1, 2025, the Criminal Code caps the criminal rate of interest at 35% annual percentage rate, and it is also now an offence to advertise credit above that rate.
McCarthy Tétrault — Amendments to criminal rate of interest provisions
Check your province's cost-of-borrowing disclosure rules
Provincial consumer protection or cost-of-borrowing legislation sets out specific disclosure requirements for consumer loans, and these vary by province.
Register the security interest in the correct provincial registry
Each common-law province runs its own PPSA registry, and Quebec uses the RDPRM under its civil-law hypothec regime; register based on the location of the vehicle or debtor, not a single national filing.

How to complete the agreement

Confirm the borrower's status. Establish whether the borrower is an individual borrowing for personal use, or a business.
Enter the credit disclosure. Add the principal, interest rate, cost of borrowing, APR and repayment schedule.
Describe the vehicle. Record make, model, year and VIN.
Register the security interest. Confirm the specific provincial PPSA (or Quebec RDPRM) registration to be made.
Set the repayment schedule. Add the number and amount of instalments.

Frequently asked questions

Is there one national consumer credit law in Canada like there is in the US, UK or Australia?

No. Consumer lending disclosure is provincial in Canada — each province has its own consumer protection or cost-of-borrowing legislation. What is federal and applies everywhere is the Criminal Code's cap on the criminal rate of interest.

What is the maximum interest rate a lender can charge?

As of January 1, 2025, the federal Criminal Code caps the criminal rate of interest at 35% annual percentage rate for any credit agreement, regardless of province — and lenders can't even advertise a rate above that.

Where do I register a lien on a financed vehicle?

In the PPSA registry of the relevant common-law province (Ontario, British Columbia, Alberta, and others each run their own), or in Quebec's RDPRM if the vehicle or debtor is in Quebec. There's no single national vehicle-lien registry.

Does this apply if the borrower is a company?

Provincial consumer protection disclosure rules generally apply to individuals borrowing for personal, family or household purposes, not to companies or business borrowing — a business car loan to a company sits outside those specific protections.

Do disclosure requirements differ between provinces?

Yes. Each province has its own cost-of-borrowing or consumer protection statute, so the specific disclosure content and format can vary depending on where the borrower is located.

Related templates

Motor vehicle bill of sale Template (Canada)

Disclaimer

This template and guide are for general information only. They are not legal or financial advice, and no lawyer or provincial regulator has reviewed or approved them. Consumer credit disclosure is provincial and detailed; confirm the specific requirements for your province, and the current federal interest-rate cap, before relying on this document.