Truck Loan Calculator (Canada)

How the payment is worked out

The amount financed is the truck price plus any tax and fees you roll in, minus your deposit and trade-in. With no balloon, each monthly payment is P × r ÷ (1 − (1 + r)−n), where P is the amount financed, r the monthly rate and n the number of months.

A balloon (also called a residual or final payment) is a lump sum left owing at the end. Because you don’t repay that part until the last month, it lowers every monthly payment, but you pay interest on it for the whole term, so total interest goes up.

How to get truck financing in Canada, step by step

1. Hold the right licence. Class AZ in Ontario, or Class 1 with an air brake endorsement in most other provinces. New tractor-trailer drivers must complete Mandatory Entry-Level Training (MELT) in Ontario, Alberta, Saskatchewan, Manitoba and British Columbia, among others.
2. Register as a carrier. Get a CRA Business Number and a National Safety Code (NSC) number from your province; in Ontario the CVOR certificate acts as your NSC registration. Add IRP plates and an IFTA licence if you’ll cross provincial or US borders, or lease on to a carrier that runs under its own authority.
3. Choose the finance type: a conditional sales contract (loan), a lease with a buyout or a lease with a residual.
4. Get quotes from banks, equipment lenders, BDC or dealer finance, then submit the documents below. Lenders pull your Equifax or TransUnion credit report.
5. Insure the truck with the lender as loss payee, pay the down payment and sign. The lender registers its lien under the provincial PPSA (the RDPRM in Quebec).

Documents you need for Canadian truck financing

You

• Two pieces of government ID, one with a photo
• Commercial driver’s licence (AZ, Class 1 or equivalent) with the air brake endorsement
• Recent driver’s abstract and, if you’re new, proof of driving experience (most lenders like two years)
• Proof of address
• Credit check consent; a personal guarantee if you’re incorporated

Your business

• CRA Business Number and GST/HST account number
• Articles of incorporation or master business licence / registration
• NSC number, CVOR certificate or abstract (Ontario) and safety rating
• IRP cab card and IFTA licence if you run inter-provincially or into the US
• Lease-on agreement or contract with the carrier you’ll haul for, or customer contracts

Income

• Last two years of personal T1 General returns with Notices of Assessment (sole proprietors)
• Last two years of T2 corporate returns and financial statements (incorporated businesses)
• 3–6 months of business bank statements
• Settlement statements from your carrier, if you’re leased on
• A void cheque or pre-authorised debit form for the payments

The truck

• Bill of sale or purchase order with the VIN, year, make, model, kilometres and price
• Ownership and a lien search for a private or used purchase; the Used Vehicle Information Package in Ontario
• Safety Standards Certificate or provincial inspection for a used truck
• Insurance binder with the lender named as loss payee
• Proof of down payment and trade-in ownership

Rates, down payments and tax

Good-credit borrowers buying a newer truck usually see single-digit rates; newer businesses and weaker credit pay more and may need 10–30% down. GST/HST on the truck can be claimed back as an input tax credit by a registered business. For income tax, a tractor or truck over 11,788 kg used to haul freight is usually Capital Cost Allowance Class 16 (40%).