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

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.
• British Columbia – The Vehicle Sales Authority (VSA) licenses dealerships.
• Manitoba – The Manitoba Consumer Protection Office enforces fair practices.
• New Brunswick – The Financial and Consumer Services Commission (FCNB) oversees vehicle sales.
• Newfoundland & Labrador – The Consumer Affairs Division regulates the automotive industry.
• Nova Scotia – The Consumer Protection Act ensures transparency.
• Ontario – The Ontario Motor Vehicle Industry Council (OMVIC) regulates dealerships.
• Prince Edward Island – The Consumer Services Division oversees sales and leasing.
• Quebec – The Office de la protection du consommateur (OPC) regulates dealership agreements.
• Saskatchewan – The Financial and Consumer Affairs Authority (FCAA) oversees dealership conduct.
• Northwest Territories – The Department of Infrastructure regulates registrations and sales.
• Nunavut – Vehicle purchases comply with general consumer protection laws.
• Yukon – The Consumer Services Branch regulates vehicle sales.

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. 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, 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.
• If you have no history, expect higher premiums initially, but they’ll drop with time.

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)
• 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!