Buying a Car in Canada

Expats may assume that buying a car in Canada will need to be one of their first and most urgent purchases. The country is certainly vast. While in certain locations it will be absolutely necessary to purchase an auto fairly quickly, Canada’s larger cities often boast world-class public transport infrastructure. Depending on where you live within the metropolis, buying a car may not only not be unnecessary, it may be ill-advised. 

Thus, before you start perusing the listings and haggling with hopeful car dealers, take some time to evaluate your destination, and to understand the dynamics of the city’s orientation and the means of getting around. 

If you do decide that buying a car is a must, you’ll need to first and foremost organise the logistics surrounding a legal driver’s license. 

From there, as in most places, it’s a matter of balancing the push and pull of your budget with your priorities and requirements. Canada has a robust automobile market, and it’s possible to purchase nearly any type of new or used car. Do note though, it will be necessary to get car insurance before you get behind the wheel.

Lastly, take heed, the cost of renting a car in Canada is prohibitively expensive, thus if you do decide you’ll need your own transportation, try and make arrangements to buy a vehicle as soon as possible.

Buying a new or used car in Canada

Apart from your budget and obvious requirements, expats should also consider what kind of purpose their car will serve. If you’re keen to take advantage of the soaring Canadian mountains and national parks, you may want to flirt with the idea of buying a vehicle with four-wheel drive; whereas if you’re primarily interested in something zippy that can fit into the small parking spaces associated with Vancouver or Toronto, then something compact is the best way to go.

Similarly, you’ll have to choose to buy a new or used car from a dealership, or a used car from a private seller. 

The obvious benefits of buying from dealerships is the fact that even used cars often come with warranties, plus, these service providers can often help you arrange necessary paperwork on-site, like your car insurance and your registration. 

That said, if you don’t mind putting in a little extra leg-work, buying a used car from a private seller can be a great way to bag a bargain and avoid the painstaking diatribes often associated with car salesman (that’s right, some things are universal – even in Canada!).

Buying a used car from a private seller

Canada has lots of online car-buying portals, such as Autonet and Auto123, that allow you to compare the costs of vehicles, their amenities and their mileage and history. Thus, buying a car from a private seller can be a largely transparent process, in the way that you’ll be able to have a relatively good idea about what kind of asking price is acceptable. Online classifieds like Craigslist and Kijiji can also be a great place to start looking for car listings. 

As is the case anywhere in the world, expats should always ask to see the service histories of vehicles before purchasing a used car from a private seller in Canada. It’s also acceptable to request that you be allowed to take the car for a test drive and take the car to a mechanic for an inspection.

If buying privately, you’ll be responsible for organising your own third-party insurance and driver’s license plates. In order to do this, you’ll need the seller to fill out forms that make the transfer of car ownership official. 

Car insurance in Canada

Before you can legally drive in Canada, you will need to insure, register, and license your new vehicle. If purchasing a new or used auto from a dealer, you can perform all of these procedures on-site on the day of purchase. On the other hand, if purchasing from a private seller, you will need to bear the brunt of completing the paperwork yourself.

Insurance is the most important duty of a car owner. Not only is it required by federal law, but it is the prerequisite for obtaining registration and licence plates. The minimum amount of third-party liability insurance is $200,000 in most provinces (and $50,000 in Québec). Similarly, most provinces require drivers to insure for medical expenses and loss of income resulting from a driving-related injury.

Types of car insurance:

  • Third-party liability insurance (for cases when you cause damage or injury to another driver), 

  • Collision insurance (for cases when you damage your own car)

  • Comprehensive insurance (for cases when your car is stolen or vandalized)

Getting an affordable car insurance deal

First of all, any car insurance will depend on a slew of documents that include your Canadian driver’s licence and driving record, your whereabouts (name and address), the specifications of your car, information about your past and present insurers (if any), and information about your past claims.

If you do not have a “full licence,” also known as G licence, it is time to sit the driving test. The more comprehensive your licence, the lower your insurance fees will be. Even if you have an active insurance policy and have just upgraded your licence, you should inform your agent of your achievement. Chances are that you will get a discount upon your next policy renewal.

Even though your insurance fees (premiums) are dependent on your driving skills and driving record, the two most important factors determining the price of your insurance are the value and “riskiness” of your car. Cheaper cars will naturally attract lower premiums and more expensive cars will have you pay extra. This relationship can, however, be distorted by the probability of your car being stolen. Some cars are naturally more prone to theft for various reasons and will thus attract higher premiums. On the other hand, installing an alarm and other anti-theft mechanisms into your vehicle will decrease its riskiness and thus your insurance cost.

If you are driving an old car — or if you are purchasing an older second-hand vehicle — consider whether the car’s value warrants the cost of collision coverage. If your car is worth very little, it may not be in your best interest to pay collision insurance on it. Instead, you may just prepare to write the car off if it was to be severely damaged and purchase a new vehicle instead. This way, you might be able to save money on collision insurance without being exposed to too much risk.

Maintain a clean driving record. Obey the rules and drive responsibly so that you do not collect traffic tickets or incur damage to you or other people while driving. Every offence or accident that you cause can increase your insurance premiums.

Making an insurance claim in Canada

Insurers must be contacted no later than seven days after the accident about any collision that was reported to the police and any event that may need to be claimed under the insurance policy. If you are trying to claim under another driver’s insurance policy, contact his or her insurer yourself within the first seven days after the accident.

Write a “proof of loss” detailing and summarizing all of your damages that you want the insurer to pay up for you. Keep official receipts from the repair shop so that you can support your proof of loss statement.

Talk with your insurer to find out what other documents might be necessary and what the deadlines for their submission are.

Car registration in Canada

Before you can register your car, you will have to fill in the registration form and accompany it with a few documents. Every province has its own transportation bureau that will give you a form to fill in. Be ready to pay a registration fee that includes motor vehicle taxes.

Make sure that you have the following information on hand before submitting your registration:

  • your driver’s licence, which will be referenced by a so-called ‘Master Number’ or ‘Client Master Number’ consisting of a personally-identifying identity token

  • the certificate of sale of the car, which includes the Vehicle Identification Number (VIN) that uniquely identifies your car

  • the certificate of title of the car (proof of ownership, also known as the ‘pink slip’), signed by both the seller and the buyer

  • your licence plate number

  • the odometer value (how many kilometres the car has ridden)

  • the safety inspection number

Once your registration has been processed, you will receive a registration sticker and registration papers. Place the sticker in the corner of your licence plate and keep the proof of registration in your car.

Car sharing co-ops in Canada

Before you buy a car, however, make sure that you have explored all locally available means of car-sharing. Car sharing, or auto sharing, is a popular way for people with a sporadic need for individual transportation to gain affordable access to a “set of wheels” any time. This handy list of auto-sharing organizations in Canada will direct you to the websites of Modo The Car Co-op in British Columbia, various other sharing-coops across the country, and the popular CommunAuto in the Québec province.

Sharing a car this way will prevent you from having to deal with car financing, insurance, regular check-ups, and parking, and it is an environmentally-friendly and cost-efficient way to enjoy the benefits of having a car without actually owning one.