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First-Time Car Buyer in Canada? Here’s What You Need to Know!

  • Writer: Maria
    Maria
  • Mar 4
  • 4 min read

Buying your first car in Canada is an exciting milestone, but it can also be overwhelming—especially if you're new to the country. From understanding financing options to securing insurance, the process can seem complicated. This guide will help you navigate the essentials of buying a car as a newcomer to Canada, so you can drive away with confidence.



First-Time Car Buyer in Canada


1. As a First-Time Car Buyer, Should You Buy a New or Used Car?

As a first-time car buyer, you might wonder whether to buy new or used. Here’s a quick comparison:

New Car: Comes with a warranty, latest features, and no previous wear, but has a higher upfront cost. Used Car: More affordable, lower depreciation, but may require maintenance sooner.

For many newcomers, a reliable used car is the best option. It offers lower monthly payments and helps you establish credit in Canada.


Where to find used cars:

  • Dealerships (certified pre-owned vehicles often come with warranties)

  • Online marketplaces (AutoTrader, Kijiji, Facebook Marketplace)

  • Auctions or private sales (be cautious—always request a vehicle history report)


2. Provincial and Territorial Car Buying Regulations

Each province and territory has its own rules for car sales, consumer protection, and dealership regulations. It’s essential to know your rights before purchasing a vehicle.


Car Buying Regulations by Province & Territory:

  • Alberta – The Alberta Motor Vehicle Industry Council (AMVIC) regulates auto dealers, protecting buyers from fraud and ensuring fair business practices.

  • British Columbia – The Vehicle Sales Authority (VSA) licenses dealerships and provides consumer protection in vehicle transactions.

  • Manitoba – The Manitoba Consumer Protection Office enforces fair trading practices in car sales.

  • New Brunswick – The Financial and Consumer Services Commission (FCNB) oversees fair business practices in vehicle sales.

  • Newfoundland & Labrador – The Consumer Affairs Division regulates the automotive industry to protect buyers from unfair practices.

  • Nova Scotia – The Nova Scotia Consumer Protection Act helps ensure transparency in car sales.

  • Ontario – The Ontario Motor Vehicle Industry Council (OMVIC) regulates dealerships and ensures they comply with the Motor Vehicle Dealers Act.

  • Prince Edward Island – The Consumer Services Division oversees motor vehicle sales and leasing.

  • Quebec – The Office de la protection du consommateur (OPC) ensures fair car sales practices and regulates dealership agreements.

  • Saskatchewan – The Financial and Consumer Affairs Authority (FCAA) oversees dealership conduct and consumer protection.

  • Northwest Territories – The Department of Infrastructure regulates vehicle registrations and sales. While there is no separate vehicle sales authority, buyers should be cautious and check for warranties or guarantees.

  • Nunavut – There is no specific auto regulatory body, but vehicle purchases must comply with general consumer protection laws. Most vehicles in Nunavut are bought from private sellers or through southern dealerships that ship to the territory.

  • Yukon – The Consumer Services Branch of the Yukon government regulates vehicle sales and ensures dealerships follow fair trading practices.


Before purchasing, check with your province or territory’s regulatory body to understand your rights and avoid scams.


3. Canadian Car Financing for Newcomers

Most newcomers don’t have a Canadian credit history, which makes financing a car challenging. However, there are options:


A. Getting a Car Loan Without Canadian Credit

Some banks and lenders offer newcomer auto loans that don’t require a credit history. Institutions like RBC, Scotiabank, and BMO have programs for newcomers.


What you’ll need for approval:

  • Proof of employment (or a job offer)

  • Valid Canadian driver’s license

  • Down payment (usually 10-20%)

  • A co-signer (optional but helpful)


B. Leasing vs. Financing

  • Leasing: Lower monthly payments but restrictions on mileage and no ownership.

  • Financing: Higher monthly payments, but you own the car in the end.

If you plan to stay in Canada long-term, financing is usually the better option.


4. Insurance Requirements in Canada

Car insurance is mandatory in Canada, and rates vary by province, territory, age, driving history, and vehicle type.


How to Get Car Insurance as a Newcomer

  • Shop around for quotes from companies like Intact*, TD Insurance*, Aviva*, and Desjardins.*

  • Some insurers accept your driving history from your home country (ask for a driving record from your previous insurer).

  • If you have no driving history, expect higher premiums initially, but rates will drop over time with a clean record.


*No affiliation or endorsements.


5. Additional Costs to Consider

Beyond the sticker price, consider these expenses:✔️ Sales tax (varies by province and territory)✔️ Registration and license plate fees✔️ Fuel costs✔️ Maintenance and repairs✔️ Winter tires (mandatory in Quebec, recommended elsewhere)


6. Final Tips for a Smart Purchase

  • Get a vehicle history report (via Carfax Canada) to check for accidents.

  • Have a mechanic inspect the car before buying.

  • Test drive to check for any issues.

  • Negotiate the price—there’s often room for a better deal!


Ready to Buy Your First Car in Canada?

By following these steps, you’ll be well-prepared to buy your first car in Canada with confidence. Take your time to research, compare financing options, and secure the right insurance to protect your investment.


Have questions about buying a car as a newcomer to Canada? Drop them in the comments below!

 
 
 

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