Buying a Car in Canada: A Step-by-Step Guide

When looking to buy a new car in Canada, the process that is associated with it can be quite confusing and challenging for new immigrants in the country.

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Immigly has come to bridge the gap and provide you with this detailed and comprehensive guide to help new immigrants make the best decision for themselves.

Canada may be a big beautiful country filled with wide-open spaces, but in most cases, offers limited public transportation, particularly outside the larger cities.

This for sure makes owning a car a necessity for several individuals who prefer to call Canada home.

Guide to Purchasing a Car in Canada

While specific provinces may apply slightly different regulations, this post will outline the overall steps for a second-hand or new car purchase — regardless of where you’re buying in Canada.

Step 1: Placing a budget and checking insurance

The first ideal step to buying a car in Canada is to set your budget. This may usually contain identifying one of two numbers.

The maximum amount of cash you’re willing to pay to get a vehicle outright. Usually, outright purchases will end in a lower overall cost, with no financing or interest involved.

The highest amount you’re willing to pay per month as an instalment towards the vehicle, plus any up-front initial payment.

Insurance: Before driving a car in Canada, it is required of you to have insurance for the car, so you ought to investigate your eligibility before purchasing the car.

Your driving history in Canada and your possession of an authentic license (either foreign or Canadian) will factor into your eligibility for auto insurance.

Big and reputable national providers across Canada include Intact Financial, Aviva Canada and Wawanesa.

See: How to Apply for Canadian Drivers License

Step 2: Trying to find the appropriate car

When looking to purchase a car in Canada, there are two known mediums. Which are;

  • Private seller: this is buying a vehicle owned by an individual.
  • Merchant seller: A business, presumably a car dealership. Sales of latest vehicles are going to be almost exclusively through a dealership.

Automatic or Manual: Automatic gearboxes are much more common in vehicles in Canada than manual ones. Note that car models that feature manual gearboxes will often retail for several percentage points but models with automatic gearboxes.

Searching Online: Searching online Is by far one of the efficient and best ways when finding cars put up for sale In Canada. Websites offer a fast and rapid way to assess cars, with images, prices, mileage details and location all easily accessible.

Some of the majorly used car sale indexing websites across Canada for locating both new and used cars are autotrader.ca, auto123.ca, and carpages.ca. For personal sales of used cars, Craigslist and Kijiji are popular options.

Note: Canadian blacklist listings provide a common-accepted industry guideline for determining the approximate average value of used and new cars. This is usually a valuable resource for putting a valuation on potential purchases when buying a car in Canada.

Step 3: Test drive and warranty details

Before buying a car in Canada, it is crucial to take any potential purchase for a test drive.

The sole aim of a test drive is for the buyer to learn more concerning the vehicle’s present condition and performance.

Test drives are offered as a standard by any creditable dealership, which will usually request a copy of your driver’s license beforehand.

It is common practice for an interested customer to bring a lover or loved one with them during a test drive, particularly if the extra individual is more technically experienced.

Immediately before a test drive is a perfect opportunity to examine the outside of a vehicle. Issues to watch out for include body damage, corrosion, defective lights, or bald tires.

Just before and through the test drive, the state of the inside, steering responsiveness, engine performance, electronic dashboard elements, brake efficiency and suspension should all be paid attention to — particularly on used vehicles.

Warranty: If the test drive is satisfactory, the subsequent step is establishing the warranty (if any) on the vehicle.

Most new vehicles in Canada will offer a 3-year basic warranty as a minimum, entitling the customer to comprehensive repairs or a replacement vehicle should any element not subject to depreciation (such as wiper blades or tires) fail on the vehicle.

For used vehicles, various additional warranties are often purchased as an additional.

Step 4: Inspections of Technicalities and Provincial Safety Testing for Used Vehicles

Provided you are contented with your test drive and warranty options on your vehicle, your next line of action should be making sure that any provincial safety test (such as in Manitoba and Ontario) needed for an initial sale or re-sale is administered by a creditable mechanic. Dealerships will typically cover this upon the sale of a brand-new car.

Regardless of provincial requirements, after a satisfactory test drive of any used vehicle, a mechanic inspection is very recommended. Potential buyers should choose one among the following:

  • Garage Inspection
  • Mobile Mechanic Inspection

Most dealerships will permit the short-term removal of a second-hand car to a garage for a variety of hours.

The utilization of an independent third-party mechanic with no ties to the dealership is suggested. This is often a routine task for mechanic garages, who should provide an in-depth statement on the state of the car.

Mobile independent mechanic inspection is a well-liked choice offered across Canada, particularly in cities. This removes the necessity for the potential buyer to drive the vehicle to a mechanic and await the inspection to be administered. The report is then provided to the potential buyer by phone or email.

Note that some provinces, including Ontario, require that a seller provides a UVIP (Used Vehicle Information Package) when retailing second-hand vehicles.

A UVIP will show if a car was ever rebuilt after an accident, salvaged, or is implicated in third-party debts.

These signify red flags for potential buyers. While not compulsory across Canada, similar reports are offered via private services like Carfax and Carproof.

Step 5 – The Buying Process

Once a buyer is contented on the present state of the vehicle, and every applicable safety test has been passed, the buying and registration processes begin. Finally, you’re now buying a car in Canada!

For private sales, a principal contract should be agreed upon and signed. A record of sale (listing vehicle details and any deposit paid) is the standard.

Payment via e-transfer or cheque is the most common and used method, with ID being exchanged.

The vendor will remove his or her plates from the vehicle, and then the new owner will need to attach the plates received after registering the car.

The appropriate handover documents, signed by both parties, will ordinarily be provided by the provincial registration authorities.

Normally, car dealerships will fully process both the retail of the vehicle and then the registration process for a buyer.

This insinuates that buyers can leave with their vehicle without having to fix a new plate — with the prevailing plate on the car now being registered in the buyer’s name.

Provided you are making a “lump-sum” payment to the car dealers, direct payment of electronic funds via Interac is the most preferred and safest payment method for completing the buying process.

Note that your bank may need to raise your transaction limit to allow this payment.

Cheque payments are also common in Canada but may require a while for processing.

Crossing the USA border

If you would like to buy a car within the USA and convey it to Canada then you should know that it is possible provided that you take care of a couple of important tips.

Keeping in mind the subsequent pointers should assist you in achieving this task:

  • confirm your Canadian car can pass U.S. environmental and safety standards.
  • Check the security requirements for the state that you are interested in residing and driving in within the U.S.
  • Collect all relevant documents concerning insurance, bill of sale and registration.
  • Expect to pay a 2.5 percent duty on the acquisition value of your car once you get to customs.

For dealerships facilitating leasing or instalment payment plans, buyers should make sure that all details and variable rates are thoroughly reviewed before signing. Direct deposit plans are the standards for purchases of this sort.

Finally, the customer should call their chosen insurance provider to make sure that insurance is in place before getting behind the wheel. This is often effective immediately.

Below is a concluding outline for the entire article which should put you through in your quest to purchase a car in Canada.

Benefits of shopping for a car

  • Easier to move around. You won’t need to plan your day around transportation system or car-share schedules.
  • Saves time. It takes only a couple of minutes to zip out for groceries or get to the office if you are in a haste.
  • Liberty to travel long distances. You will be able to take an unplanned trip or work and study beyond home because the commute is going to be manageable.
  • Financing helps build credit. you’ll be ready to use your automobile loan to create your credit score if you create your payments on time.

What to observe For

  • Paying an excessive amount of money. Avoid paying an excessive amount of money for your car by checking out online price estimates for the vehicle you’re interested in before you make a purchase.
  • High interest rates. Compare lenders to avoid paying an excessive amount of on interest once you remove financing for your new car.
  • History of accidents. Request a CARFAX report and obtain an inspection before buying a car to be certain it hasn’t been in any accidents.
  • Extra expenses. Assess the fees when buying a car in Canada and believe extra costs like insurance, maintenance and gas.

What are my alternatives to purchasing a car?

Adopting a car-free lifestyle can assist you to economize and reduce your carbon footprint. Consider the subsequent alternatives to owning a car:

  • Walking: You can walk to nearby grocery stores and restaurants if you reside in a populated area or walkable neighborhood.
  • Biking: You can in most large cities and it can sometimes be quicker than taking the car if you reside during a city with busy or congested traffic.
  • Public transportation: Take the bus or metro to move around with less effort but be prepared to pay daily or monthly fees to move around.
  • Taxis or rideshare services: Call a taxi, Uber or Lyft if you would like to require a brief trip and don’t mind paying a $10 to $20 bill.
  • Car-sharing companies: search a car-sharing company in your city if you would like to access a vehicle and have $20 to $50 to spare (plus initial registration fees).
  • Rental cars: Rent a car for extended trips but remember that this feature can sometimes cost between $50 and $200 per day.
  • Carpooling: you would possibly want to ask a coworker about carpooling if you’re both taking the same ride to work a day.

Bottom line: buying a car in Canada can be made easy and stress-free if and only you recognize where and how you should shop for a car.

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