A fair comparison evaluates two complete strategies, not loan interest against investment gains alone. Both use the same vehicle price, time horizon and monthly budget.
The cash strategy pays the price upfront and invests avoided loan payments at each month end. The financing strategy invests retained capital upfront and makes monthly loan payments. The platform’s decimal-safe engine calculates both terminal wealth amounts.
A financing rate is not an approval or an offer. Returns are hypothetical and may be negative. Investment fees, taxation, purchase taxes, dealer charges and insurance costs are excluded from the example; actual applicable costs must be added consistently to both strategies.
TFSA or RRSP contribution room is never assumed. RRSP tax effects depend on individual circumstances and future withdrawals. Car-loan interest is not automatically deductible. This is educational information, not an investment recommendation.
Equal-budget illustration
Hypothetical example, not an offer: CAD 25,000 price, zero down payment, 7% nominal annual APR, 60 months, hypothetical 3% annual return. Payment: $495.03. Total interest: $4,701.82. Cash-strategy terminal wealth: $31,629.38; financing: $28,384.57. Financing minus cash: -$3,244.81. Before taxation and investment fees; returns are not guaranteed.
Sources and method
Financial Consumer Agency of Canada — financing a car. Source consulted on 2026-11-10. Numerical examples come from the platform’s deterministic engine, not a credit offer or the external source. Equal-budget methodology v2; risk method v1.