MARKET ANALYSIS · OCTOBER 2026
Year End Auto Financing in Ontario: What Used Car Dealers Need to Know for Fall 2026
Something changes in a lender’s office around mid October. The quarter still has weeks left, but portfolios start closing for the year. Here is what the September 2026 data says about financing used vehicles through the end of the year in Southern Ontario.
Based on the September 2026 market data above, here is why Southern Ontario used car dealerships benefit from working with a dedicated auto finance source.
Most used car buyers finance, they do not pay cash
Equifax Canada’s Q2 2026 Market Pulse shows total Canadian auto loan balances climbed to $179.1 billion, up 4.9 percent year over year. People are financing their used car purchases across Ontario, not writing cheques for them. The average size of each newly opened auto loan is now $36,979, up $2,266 year over year. For most Ontario used car buyers, the deal lives or dies on the financing approval, not on the price tag. A used car dealership that cannot place the financing cannot close the sale, no matter how well the vehicle is priced or presented.
Approvals need an expert, not a form
The number of auto loans newly opened in Canada fell 9.2 percent in Q2 2026. Fewer loans are being written, each one larger. Getting a file approved in that environment is not a matter of filling in a form and hoping. It requires knowing how each Canadian auto lender wants the file structured before submission: the right down payment, the right term, the right co signer setup, the right trade value treatment. Ontario Underwriters does this every day across prime, near prime and subprime tiers, which means Southern Ontario dealers send cleaner submissions and get cleaner answers.
One file, many lenders
A used car dealership that sends every file to one source is exposed when that source tightens. Ontario Underwriters already has active relationships with a wide panel of Canadian auto lenders. One file submitted to Ontario Underwriters can reach several lenders at the same time, without the dealership having to build and maintain each lender relationship on its own. In Fall 2026, when lender appetite is contracting, having more channels for the same borrower profile is the difference between a funded deal and a lost customer.
A current read on lender appetite as it changes
Rates are stable, but lender appetite is not. Between October and December, credit teams get more conservative, funding slows from two days to four or five, and conditions get stricter. None of it is announced. A dedicated auto finance source already knows which Canadian auto lenders are tightening and which are still writing. Dealers who work with Ontario Underwriters get that read on the market without having to call every lender rep themselves.
A clear path for the harder files
Canadian Black Book’s August commentary noted dealers are seeing more recent credit blemishes among buyers. Equifax noted average loan sizes are up more than $2,000 year over year, which is partly rolled negative equity. These files are harder to structure, harder to place, and more likely to be declined on a first look. Structuring the deal honestly before submission, matching it to the right lender, and flagging the negative equity up front raises the approval chance on files that would otherwise walk out the door.
A tightening market rewards faster, cleaner approvals
September 2026 data shows dealer lots down from about 169,000 to about 160,000 units. Retail list prices moved up roughly $1,600 in a month. The market is tightening into Fall 2026. Southern Ontario dealers who can turn a prospect into a funded deal faster, with fewer declined submissions, will capture a larger share of a smaller pool of buyers.
Something changes in a Canadian auto lender’s office somewhere around mid October. The quarter still has weeks left, but the people who run portfolios start thinking about how the year will close. By early December, that thinking shows up in dealer inboxes as slower funding, tighter conditions, and declines on files that would have cleared in August.
This article walks Ontario used car dealers through what the September 2026 numbers say about the market, why October is a different environment for approvals than December, and what dealers in Toronto, Mississauga, Hamilton, London, Kitchener, Windsor and across Southern Ontario can do in the next few weeks to clear files while the Fall 2026 window is still open. We covered the broader direction of the used car market in Used Car Prices in Canada Are Falling. The Headline Number Was Hiding It.
The Southern Ontario used car market in September
Canadian Black Book’s weekly Market Insights report for the week ending September 5 showed the overall used wholesale market down 0.05 percent. That is a smaller drop than the prior week’s 0.20 percent decline and smaller than the 2017 to 2019 same week average of 0.24 percent. For the first time since early May, the car segment turned positive at plus 0.01 percent. Truck and SUV segments were down 0.09 percent.
The retail side is firming at the same time. Canadian dealer lots held about 160,000 used vehicles in early September, down from roughly 169,000 in mid August. The 14 day moving average listing price moved up to about $38,500 from about $36,900 over the same stretch. Lots are thinner. Average prices are higher.
August to September: a one-month comparison of the Canadian used wholesale market
| Metric | August 11, 2026 | September 8, 2026 |
| Weekly wholesale change | −0.19% | −0.05% |
| Car segment weekly change | −0.10% | +0.01% |
| Truck/SUV weekly change | −0.26% | −0.09% |
| Units on Canadian dealer lots | about 169,000 | about 160,000 |
| 14 day retail listing average | about $36,900 | about $38,500 |
Canadian Black Book summed up the auction floor this way: “Buyers remained selective, paying stronger prices for desirable, clean condition inventory while showing less interest in mainstream vehicles and several EV segments.”
The broader rate environment is holding too. The Bank of Canada held its policy rate at 2.25 percent on September 2, 2026, the sixth consecutive hold. Consumer prime stays at 4.45 percent. The 10 year Government of Canada bond yield rose to 3.66 percent, which matters for lender funding costs but has not yet moved consumer auto loan rates.
What Canadian auto lenders are actually doing
Equifax Canada’s Q2 2026 Market Pulse Consumer Credit Trends Report, released August 24, 2026, gives Southern Ontario used car dealers the clearest view of how Canadian auto lenders are behaving right now. The number of auto loans newly opened in Q2 2026, meaning fresh loan contracts written for both new and used vehicles, fell 9.2 percent compared with Q2 2025. At the same time, the average size of each newly opened auto loan grew from $34,713 to $36,979 year over year, a jump of $2,266. Total Canadian auto loan balances climbed to $179.1 billion, up 4.9 percent year over year.
Fewer loans written. Each one larger. That is the shape of a Canadian lender pool that is selecting more carefully, approving the stronger files, and letting the edge cases walk away.
Canadian auto lenders are writing fewer, larger loans
Year-over-year change, Q2 2026 vs Q2 2025
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| Average loan size |
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| Total auto loan balances |
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Source: Equifax Canada Q2 2026 Market Pulse Consumer Credit Trends Report
The 90-plus-day auto delinquency rate actually improved slightly, from 1.11 percent to 1.10 percent, and the used vehicle segment drove the improvement. That good news is itself part of the reason Canadian auto lenders will keep selecting carefully. The way to protect a delinquency number is to be strict about which files are added to the book.
Canadian Black Book’s August commentary noted the same pattern from the dealer side: “Rising consumer credit stress, dealers are seeing more recent credit blemishes among buyers.” Ontario used car dealers across Toronto, Mississauga, Brampton, Hamilton and Markham are seeing more applications from borrowers with recent credit events, exactly when lenders are tightening their appetite for those files.
Why October approvals are not the same as December approvals
Rates are stable through year end in the base case. The next Bank of Canada decision is October 28, 2026, with the final 2026 call on December 9, 2026. The policy rate environment is set.
What is not set is lender appetite. Appetite moves on calendar pressure, not on policy rates. Three things change inside most Canadian lender offices between October and December.
Credit teams get more conservative on borderline files
The applications that get a second look in October get a quick decline in December. Fewer loan officers want to be the one who approved the file that goes delinquent in the first quarter of 2027.
Funding slows
Documentation turnaround that takes two days in October can take four or five days in December. The holidays account for part of it. Portfolio sign offs account for the rest. For Southern Ontario used car dealers trying to deliver before year end, that funding delay can cost real deals.
Conditions get stricter
More proof of income requests. Co signer requirements on files that would have cleared solo. Larger down payment requirements on units lenders view as higher risk. None of this is announced in a bulletin. It shows up one file at a time.
What a Southern Ontario used car dealer can do in October
A few practical moves while the window is open.
Push aged inventory with harder files first
The 2020 and 2021 units with mileage against them, the ones with story deals around them, the trades with negative equity rolled in. Those are the files that move with less friction in October and get stuck in December.
Flag negative equity deals early
Equifax Canada noted the average auto loan amount is up more than $2,000 year over year. Part of that is rolled negative equity from prior deals. Canadian auto lenders are watching this. The sooner the deal is structured honestly, the better the approval chance.
Know which files to hold for January
Some files are better off waiting. If the deal needs a story, needs several conditions, or depends on a specific lender’s appetite, January often brings a cleaner lane than December. Lender portfolio targets reset at the start of the year.
Frequently asked questions
Why do Canadian auto lenders tighten approvals in the final months of the year?
Canadian auto lenders begin managing year end portfolio metrics in mid October. Credit teams become more conservative on borderline files, funding turnaround slows, and conditions get stricter. The pattern intensifies into December as lenders protect delinquency numbers before year end reporting. None of this is announced. It shows up one file at a time.
What does Equifax Canada say about auto loans in Q2 2026?
Equifax Canada’s Q2 2026 Market Pulse, released August 24, 2026, shows the number of auto loans newly opened fell 9.2 percent compared with Q2 2025. The average size of each newly opened auto loan climbed from $34,713 to $36,979, a jump of $2,266. Total Canadian auto loan balances reached $179.1 billion, up 4.9 percent year over year.
What is the Bank of Canada rate for Fall 2026?
The Bank of Canada held its policy rate at 2.25 percent on September 2, 2026, the sixth consecutive hold. Consumer prime stays at 4.45 percent. The next decision is October 28, 2026, with the final 2026 call on December 9, 2026.
Is it harder to finance a used car in Ontario in Fall 2026?
Yes, approvals are more selective. The number of auto loans newly opened in Canada fell 9.2 percent year over year in Q2 2026, while the average loan size grew by $2,266. Lenders are writing fewer, larger, cleaner loans, which raises the bar on borderline files. Working with a dedicated auto finance source that submits to multiple lenders widens the range of borrowers who can still be approved.
How can a used car dealership protect approval rates through year end?
Push aged inventory with harder files first while the window is open, flag negative equity deals early so they can be structured honestly, and hold story files for January when lender portfolio targets reset. Working with a dedicated auto finance source gives dealers a current read on which lenders are tightening and which are still writing, without having to call every lender rep themselves.
Which Southern Ontario cities does Ontario Underwriters serve?
Ontario Underwriters serves used car dealerships across Southern Ontario, including Toronto, Mississauga, Brampton, Hamilton, London, Kitchener, Windsor, Vaughan, Markham, Oshawa, St. Catharines, Barrie, Guelph and Oakville, along with surrounding Southern Ontario communities.
Financing used vehicles in Southern Ontario
Ontario Underwriters is a dedicated auto finance source for used car dealerships across Southern Ontario, serving Toronto, Mississauga, Brampton, Hamilton, London, Kitchener, Windsor, Vaughan, Markham, Oshawa, St. Catharines, Barrie, Guelph and Oakville.
We work with dealers to finance their customers across a wide range of credit situations, and we work with consumers looking for a straightforward way to finance a vehicle.
Dealer partnerships · Apply for financing · info@on-u.org · (437) 345-4477
Sources: Canadian Black Book weekly Market Insights reports, week ending September 5, 2026 (published September 8, 2026) and week ending August 8, 2026 (published August 11, 2026). Equifax Canada Q2 2026 Market Pulse Consumer Credit Trends Report, released August 24, 2026. Bank of Canada policy rate announcement, September 2, 2026.
Ontario Underwriters
A dedicated auto finance source for used car dealerships across Southern Ontario
125 Norfinch Dr Suite 207, North York, ON M3N 1W8 · info@on-u.org