Annual Percentage Rate (APR)

The Annual Percentage Rate (APR) is the standardized measure of the cost of borrowing over a year, including interest and certain fees, expressed as a percentage. In Canadian auto financing, APR helps customers compare loan offers from different lenders or dealerships on an apples-to-apples basis. For example, an auto loan might have a 5.99% APR, which reflects the interest rate plus any lender fees spread over the year. Dealership finance managers present the APR in compliance with federal and provincial regulations (like the Cost of Borrowing disclosure requirements) so that consumers understand the full cost of their loan or lease.