The process for buying a car in canada,buying a car in canada as a foreigner and buying a car in canada as a u s citizen is pretty straight forward. There are a number of steps involved but in general, the basics boil down to:
- Set your budget
- Research ideal vehicles
- Compare and review models
- Inspection and test drive
- Finalize the purchase and paperwork
- Get car insurance
- Register ownership
You can view our in-depth guide to buying a new car in Ontario here.
Buying a Used Vehicle in Ontario
Buying a used car works almost the exact same as buying a new car. There are some differences, however, mostly to do with the different sources of used vehicles and the nature of pricing, payment, and condition. Things like:
- Payment Options — you can almost never lease a used vehicle unless it’s Certified Pre-Owned
- Pricing — prices are not set by manufacturer but by the seller
- Condition — have to worry about the vehicles condition and history
- Sources of Inventory — can buy from private sellers and auctions as well as from a dealership
- Documents — there are unique documents relevant to purchasing and registering ownership a used vehicle
We have an in-depth guide that delves into all the different details involved with buying a used car in Ontario here.Useful Tip! Buying a Certified Pre-Owned vehicle is a great way to get a car only a few years old, so it is still close to brand new, sometimes still under warranty, comes with fully documented service history and is much cheaper since new cars depreciate by thousands of dollars in the first few years of ownership.
buying a car in canada as a foreigner
One of the most important documents involved in the used car buying process is the Used Vehicle Information Package (UVIP). It contains all the important details and information about the vehicle’s history, including:
- Basic Vehicle Information — the year, make, model, colour, body type, etc.
- Registration History — list of previous and current owners and their information
- Application of Transfer — the seller and buyer must both sign to transfer ownership
- Bills of Sale — section that the seller must fill out to establish the date of purchase and selling price
- Lien Information — if there is still an existing loan remaining on the vehicle that the buyer might inherit on purchase
If you are buying a used vehicle make absolutely sure that the seller has and shows you the UVIP to look through before you even think of finalizing the purchase because it is against the law if they don’t.Did You Know? It is illegal in Ontario to sell a used vehicle without a Used Vehicle Information Package. A UVIP costs $20 and can either be ordered online or purchased from a ServiceOntario Centre.
buying a car in canada
If you have recently immigrated into Ontario and want to buy your first car here, there are a few things you will encounter in the process that you might not know about.
- No Credit or Credit Card — it will be difficult to get any lease or loan when you buy a car since as a new arrival you will have little to no credit history
- Insurance — all drivers in Ontario legally MUST have a valid insurance policy
- Driver’s License — if you had a driver’s license in your home country then you might be eligible to fully exchange it or get credit for your experience
All of these are necessary for you to buy a car in Ontario, so if you want to know more about them and how they impact you as a recent immigrant you can read our full new Canadian car buying guide here.
Useful Tip! There are over 30 different new car brands and hundreds of models to buy from in Canada. You can use one of the many online comparison tools online to help pick the perfect car that you want. Pick the year, make and model for two or more vehicles, and see the price range, fuel economy, average rating and other important information for each car next to each other.
The process of buying a car in Canada can be confusing for new arrivals in the country. This comprehensive guide will help you make the correct decisions.
Canada is a big, beautiful country, full of wide-open spaces but often offering limited public transport, particularly outside the larger cities. That makes car ownership a necessity for many who choose to call Canada home.
While specific provinces may apply slightly different regulations, this post will outline the general steps for a used or new car purchase — no matter where you’re buying in Canada.
Step 1: Setting a budget and checking insurance
Setting a budget is the first step in buying a car in Canada. This will usually consist of identifying one of two numbers.
- The maximum “lump sum” of money you are willing pay to purchase a vehicle outright. Typically, outright purchases will result in a lower overall cost, with no financing or interest involved.
- The maximum amount you are willing or able to pay per month as an installment towards the vehicle, plus any up-front initial payment.
Insurance: Insurance is required before you may get behind the wheel of car in Canada, so you should investigate your eligibility before making a purchase. Your driving history in Canada and your possession of a valid license (either foreign or Canadian) will factor into your eligibility for auto insurance. Large national providers include Intact Financial, Aviva Canada and Wawanesa. Shopping around is encouraged! Please note our article on obtaining a Canadian license here.
Step 2: Looking for a suitable car
There are two usual channels for buying a car in Canada:
- Private seller: A private individual selling you a vehicle that he or she owns.
- Merchant seller: A business, most likely a car dealership. Sales of new vehicles will be almost exclusively through a dealership.
Automatic or Manual: Automatic gearboxes are far more common in vehicles in Canada than manual ones. Note that car models that feature manual gearboxes will often retail for several percentage points less than models with automatic gearboxes.
Searching Online: The most efficient way to begin seeking out cars for sale in Canada is online. Websites offer a quick and rapid way to review cars, with images, prices, mileage details and location all easily accessible.
Some of the most commonly utilized car sale indexing websites across Canada for finding both new and used cars are autotrader.ca, auto123.ca, and carpages.ca. For private sales of used cars, Craigslist and Kijiji are popular options.
Note: Canadian Black Book listings provide a common-accepted industry guideline for establishing the approximate average value of used and new cars. This is a valuable resource for placing 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 important to take any potential purchase for a test drive. The purpose of a test drive is learn more about a vehicle’s present condition and performance. Test drives are offered as standard by any reputable dealership, who will usually take a copy of your driving license beforehand.
It is common practice for an interested customer to bring a friend or family member with them during a test drive, particularly if the additional individual is more technically experienced.
Immediately before a test drive is an ideal opportunity to inspect the exterior of a vehicle. Issues to look out for include body damage, corrosion, defective lights, or bald tires. Just before and during the test drive, the state of the interior, 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 next step is establish the warranty (if any) on the vehicle. Most new vehicles in Canada will offer a three year basic warranty as a minimum, entitling the buyer to comprehensive repairs or a replacement vehicle should any element not subject to “wear and tear” (such as wiper blades or tires) fail on the vehicle. For used vehicles, various additional warranties can be purchased as an extra.
Step 4 – Technical inspections and provincial safety testing for used vehicles
If you are satisfied with your test drive and warranty options on your vehicle, you must next make sure that any provincial safety test (such as in Manitoba and Ontario) as required for an initial sale or re-sale is carried out by a reputable mechanic. Dealerships will typically cover this upon sale of a new car.
Regardless of provincial requirements, after a satisfactory test drive of any used vehicle, a mechanic inspection is highly recommended. Potential buyers should opt for one of the following:
- Garage Inspection
- Mobile Mechanic Inspection
Most dealerships will allow for the temporary removal of a used car to a garage for a number of hours. The use of an independent, third-party mechanic, with no ties to the dealership is recommended. This is a routine task for mechanic garages, who should provide a detailed report on the state of the car.
Mobile independent mechanic inspection is a popular choice offered across Canada, particularly in cities. This removes the need for the potential buyer to drive the vehicle to a mechanic and wait for the inspection to be carried out. The report usually provided directly to the potential buyer by phone or email.
Note some provinces, including Ontario, require that a seller provides a UVIP (Used Vehicle Information Package) when retailing a used vehicle. A UVIP will indicate if a car was ever rebuilt after a crash, 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 such as Carfax and Carproof.
Step 5 – The purchasing process
Once a buyer is satisfied as to the current state of the vehicle, and any applicable safety test has been passed, the purchase and registration processes begins. Finally, you are now buying a car in Canada!
For private sales, a basic contract should be agreed and signed. A record of sale (listing vehicle details and any deposit paid) is the norm. Payment via e-transfer or cheque is the most common method, with ID being exchanged. The seller will remove his or her plates from the vehicle, and the new owner will have to affix the plates received after registering the car. The relevant handover documents, signed by both parties, will typically be provided by the provincial registration authorities (e.g. SAAQ in Quebec, ICBC / Autoplan in British Columbia, etc).
Happily, car dealerships will normally fully process both the retail of the vehicle and the registration process for a buyer. This means buyers can usually drive away without the need to attach a new plate — with the existing plate on the car now being registered in the buyer’s name.
For “lump-sum” payments to dealerships, direct payment of electronic funds via Interac is the preferred and safest payment method for completing the purchase. Note that your bank may have to raise your transaction limit to permit this payment. Cheque payments are also common in Canada but may require some time for processing.
Crossing the border
If you want to purchase a car in the United States and bring it to Canada then you need to know that it is possible so long as you take care of a few important tips. Paying attention to the following pointers should help you achieve this task:
- Make sure your Canadian car can pass U.S. environmental and safety standards.
- Check the safety requirements for the state that you intend to reside and drive in in the U.S.
- Collect all relevant documents relating to insurance, bill of sale and registration.
- Expect to pay a 2.5 percent duty on the purchase value of your car when you get to customs.
For dealerships facilitating leasing or installment payment plans, buyers should ensure that all details and variable rates are thoroughly reviewed before signing. Direct deposit plans are the norm for purchases of this type.
Finally, the buyer should call their chosen insurance provider to ensure that insurance is in place before getting behind the wheel. This is usually effective immediately.
buying a car in canada as a u s citizen
When buying a car, there are a number of things to consider: whether you want to buy a new or used car, what the best time is to buy a car, and what steps you will encounter during the whole process. We’ve written a number of guides on each topic to help you be prepared to go into your shopping experience. Good luck!