What is Total Cost of Borrowing?

Total cost of borrowing is the full dollar amount a customer pays to finance a vehicle beyond the amount borrowed. It includes all interest charges plus any fees required to obtain the loan over its full term. Canadian consumer protection and cost-of-credit disclosure laws require lenders and dealers to state this figure clearly in the financing contract, alongside the annual percentage rate and the total of all payments. For a car buyer, it answers the practical question: how much extra will this loan cost me in total? Dealers who present the total cost of borrowing openly, rather than focusing only on the monthly payment, build trust and reduce the risk of complaints or compliance issues in provinces with strict cost-of-credit rules.