Buying A Car In Canada: Can Immigrants Own One?

There are many choices to be made when purchasing an automobile in Canada. Anything is available for purchase, whether it’s a new, second-hand, or imported one. You may choose between purchasing the automobile completely, financing it with a lease, or debt. 

There are some steps to buy a car in Canada. Once you comprehend these steps, you may approach discussions and purchases strategically. Essentially, you plan, research, and find a car, inspect it, and decide to buy and drive. Your vehicle registration, car insurance policy, and your driving license are some documents required to own a car.

An automobile is more than simply a means of transportation for some individuals. Adventure, independence, and in certain situations, your persona may all be reflected in an automobile. To groom yourself, you can get your car after great hard work.

Waiting to get some tips to buy a car in Canada? You’ll get all suggestions if you keep scrolling through this guide. Should we start? 

Buying a Car in Canada

You might worry about transportation if you recently immigrated to Canada or intend to do so. Getting a car makes it very easy for you and your family to travel further distances or to get home, work, or office. 

However, if you aren’t familiar with the process of buying a car in Canada, you’ll definitely have yet to learn what needs to be done and the length of the whole process. So, keep reading for further details:

Total Cost Of A Car Ownership

You surely know that new automobiles are really costly. Hence, analyzing all the costs and the structure of the new automobile industry is really beneficial. You can make a poor financial choice for being easily swept up in the thrill and excitement of purchasing a new automobile.

Furthermore, the most crucial phase of the purchase procedure is ‘cost.’ Now examine every aspect of new car pricing and the expenses you’ll encounter while buying one.

Financing is often number 1 when beginning to buy a car. However, remember to account for constant and operational expenditures while creating your budget. Fixed expenses may consist of the following:

• The entire cost of purchasing your car and sales tax
• Yearly insurance
• Loan and financing
• Registration fees and related expenses
• Loss (resale value)

Operating expenses vary based on your driving patterns and the type of car you own. The operating expenses may include the following:

• Regular upkeep
• Component replacements such as wheels and wipers
• Gasoline
• Charging expenses for electric cars

Please open a separate account for your car maintenance only. Visit the driving cost calculator website to evaluate your expenses.

MSRP

The Manufacturer’s Suggested Retail Price (MSRP) is called price label and sticker price. The vehicle seller tells you the MSRP of the car, and you have to pay that amount. However, the dealers typically sell for considerably less than the MSRP when it comes to new automobile costs.

If a car is in demand, but there is a shortage of that vehicle, you’ll be insisted to buy that car. But it would be best if you decided according to your budget. The MSPR excludes sales tax and any other salesman’s expenses. 

These costs are disguised in certain ways since sellers don’t represent these costs in the MSPR. Calculating sales tax is quite simple in Canada. The federal government imposes a 5% Goods and Services Tax (GST).

During the car purchasing procedure, you must also pay Provincial Sales Tax (PST). PST varies from province to province. 

Down Payment

It is the portion of the total cost of the automobile that you have to pay in cash at the time of purchase. It ranges from 10% to 20%. Down payments are built up quickly and aren’t usually required. 

Down payment frequently results in cheaper interest rates, discounted inflation, faster and simpler approval, promotions, and reduced monthly installments. The bigger your down payment, the more perks are available to you.

Negotiating a New Price

You’re obviously looking for the finest new vehicle discounts in Canada. Regarding negotiating a new automobile cost, Canada offers freedom and many alternatives. Yes, you must consider getting a fantastic bargain, but first, you must grasp the process of selling new automobiles.

The MSPR is not what auto sellers spent to acquire the vehicle. Instead, they try to sell brand-new automobiles for the MSRP. You must pay the car dealer an invoice price (factory invoice). 

On the factory invoice, the dealers get their profit on each car sale. It differentiates factory invoices from the MSRP. Explore the car prices thoroughly, and go toward the dealer when you feel ready to bargain. 

The possible manufacturer rebates should be another consideration while searching for a new automobile offer. Manufacturers’ rebates reduce the amount that vehicle sellers pay even further. 

After determining the invoice price, subtract any manufacturer discounts from the amount to find the actual price that a vehicle dealer has to pay. So this is how new vehicle prices and profit operate. 

The dealers happily accept the less profit, but they almost certainly accept a price lower than the MSRP. The dealerships usually want only 10% profit which is an excellent beginning for the discussion. Negotiating is absolutely doable. You have to try only.

Manufacturer Incentives

Manufacturers provide unpublicized or private incentives to auto dealers. Customers also get strong incentives from manufacturers to increase sales. The incentives you may encounter are the following:

• Low lending or leasing rates
• Cash refunds

Best Time To Buy A Car In Canada

Timing is crucial when you have to buy a new automobile. Every season offers new and changed prices of automobiles. November is an excellent month to buy a new car in Canada.

The reason behind this strategy is that this month is fixed for booking new cars that dealers have to keep in their showrooms. So, the older models need to be sold at a low cost. Hence, you must visit the showrooms, evaluate the best costs, and buy a new one.

Moreover, every seller aims to obtain fixed selling in a month. So if this goal is achieved after the end of the month, he necessarily reduces car prices. So you can also visit showrooms at the end of each month.

Major sales days are also the best days to buy something even if it can be your wardrobe, shoes, bags, or a car. Christmas days, black Fridays and other occasions should never be missed. 

Purchasing a new automobile is a time-consuming procedure that demands patience and careful thinking. Pick out the following suggestions and strategies to think about during the whole procedure:

• Learning about competitive prices is very crucial before buying ad selecting one car. So, you must have several auto sellers. Go for that seller who offers you various excellent discounts and promotions. 
• Instead of showing off, always listen to your wallet. Only follow the motivational quotes of sellers that go within your budget. You would be asked to choose a monthly installment system to buy a car, but if you have cash, feel free to buy the car at once. 

Required Legal Documents

Jot down the following important documents required to buy a car in Canada:

Driver’s License

Suppose you have migrated to Canada from any other country and have a license of your home country. Many provinces of Canada have this offer that you may exchange your motherland’s license with the province’s license.

For example, if you want to buy a car in Ontario and there is a need to show your driving license. Then exchange your license with Ontario’s license immediately and get your car. Exchanging also demands your driving experience.

Submit all the supporting paperwork required to exchange your overseas license. Following are the forms of identity required to exchange license:

• Foreign driving license
• Canadian citizenship card
• An official written letter

The written letter should have been issued 6 months ago and must consist of the following:

• Coversheet, a company’s seal, a badge of shield, and other identifying marks
• The day you initially received your license
• Your full name and birthdate
• The status of your license, license number, and expiry date

Remember that a driver’s abstract and written letter isn’t required to obtain a driving license. But it is necessary if you need driving experience and is claiming it to buy a car. If you want to avoid exchanging your foreign driving license with Ontario’s, you can also get your new one.

Car Insurance

Following is additional paperwork you need while buying a car:

• The license number of each family member who will use the automobile
• Brand, manufacturer, age, and number plate of your desired car
• If you want to enjoy excellent interest offers, you may also represent a certificate of completion of safe driving classes
• A copy of your prior driving history should also be attached

Canadians with insurance coverage may submit formal letters from prior insurance companies.

Vehicle Registration

Once you buy your car, the most crucial step is registering it in your name to show legal ownership. The following are the documents necessary to register your car:

• Registrant Identification Number (RIN) imprinted on your license
• Legal and valid insurance coverage
• License number
• The pink slip of ownership and sale rights
• Buying a new car will give you registration immediately. But if you are buying a used car, then the following are the items you need to attach:
• Safety regulation certificate
• Used Car Information Package (UVIP)
• Emission tests for driving

How To Buy A Car In Canada?

One of the largest purchases you ever make is an automobile. Here is an overview of each step you take in the procedure to assist you:

Plan & Research

Analyze your financial situation and the value you’ll receive from your purchase. Some factors to consider are inflation, tax, coverage and insurance, dependability, registration costs, and fuel efficiency.

The next crucial step is researching the ideal automobile that suits you and your lifestyle. For the most part, consumers start with googling.

Find The Car You Want

You want to locate a reasonable price at neighbouring vehicle showrooms, company sites, 3rd party service listings, and adverts. TBH, you should conduct a small amount of research on the kinds of automobiles you desire before getting into a showroom.

Test & Inspect

It is best practice to check and test an automobile before buying one. By inspecting the vehicle and taking it for a road test, you want to ensure that it is free of flaws or other problems. However, some dealers may allow you to test drive a used automobile before you make a decision to purchase a new one.

Once you’ve located the vehicle you’re looking for, it’s time to haggle over the cost with the dealer and put your down payment aside. You must choose whether to purchase the automobile entirely or take out a car loan and pay over time in equal monthly installments.

Obtain insurance, property certification, and license plates to own a car. Once all the necessary documentation has been cleared and signed, you may drive your automobile and start enjoying your ride. 

Check Out Write Off Your Dream Car | MUST WATCH Before Buying a Vehicle for Business in Canada

Brand New vs Used Cars

Consider whether you can afford new or used cars. If you are ready to appreciate the fragrance of a fresh new automobile, then take it home. However, if you have a tight budget, used automobiles are viable options. Moreover, used automobiles provide significant discounts over brand-new cars. 

Pros & Cons Of Brand New Cars

Following are some pros and cons of having new cars:

Pros

• The main advantage of getting a new car is that you get a warranty for a few years. So, you can easily maintain your car for free within the initial years
• With new automobiles, you may have access to the newest technologies, like excellent gas efficiencies, reduced emissions, and luxurious sound systems
• You can get incentives while finalizing a deal with the manufacturer
• If you can’t pay on the spot for a new car, you can easily hire or lease the car

Cons

• New cars are particularly vulnerable to depreciation since they begin losing their value
• You can only recover your lost amount
• New cars are quite expensive

Pros & Cons Of Used Cars

Check out the pros and cons of used cars below:

Pros

• With a used automobile, there is no need to be concerned about a significant inflation impact
• If properly maintained, used automobiles may be dependable as new ones and cost less overall

Cons

• Used cars have a reputation for lacking utility and dependability. Before acquiring an automobile, you must know its function and efficiency
• The car may be in a bad position and will require more cost for its maintenance than its cost price

Difference Between Buying From A Dealership Or Private Seller

It’s all up to you whether you want to purchase a car from a dealership or a private seller. If you want a brand-new car, then dealerships serve you. But used cars can be obtained from any of the two. But what do both of these do? Below is your answer:

Dealership

Buying a new car from car dealerships is a complex process because it’s all about buying from a company, not an individual. These dealerships are interested in making a profit from their sale.

Following are some unique concerns you may encounter while purchasing a car:

• Dealers may provide a wide range of automobiles. You can visit the whole collection
• You may encounter expenses like MSRP, invoice and sticker price, tax, and other expenses
• These new cars are relatively expensive and more reliable
• You can avail of a lease or loan while purchasing a car

When agreeing on the cost and other parameters of buying a car, you will not encounter bargaining while purchasing from dealerships. You can discuss car financing options, warranties, and other fees or extra charges than the original cost price.

Private Sellers

You can buy used cars from private sellers when you have to deal with an individual. There are no financing options, additional costs, tax, or sales while purchasing from private sellers.

The purchasing procedure from sellers is less complicated as there is no need to make a profit for sellers. Because the sellers demand money according to their own will, and there is a great margin of profit in it. So there’s no need to ask for it separately.

Purchasing from a private seller has the following distinctive features:

• The seller is only concerned about selling his product. Hence, the condition of the automobile doesn’t matter at all to him. You’ll be getting the car either in and or good condition. So, be careful while purchasing.
• Inspection is crucial, especially when purchasing a car from an individual rather than a dealership. 
• It’s good to purchase while giving cash immediately to limit the risk of getting deceived.
• You can buy these certifications if you need safety test certificates to smooth the purchase procedure.

Financing Options When Buying a Car

While purchasing a car, there are various methods to pay for it. These are lease, loan, and cash. The final choice is simple, while leasing and loaning are quite complicated.

Lease

Leasing a car means renting a car. It involves monthly installments, and you can buy it entirely or return it after all the installments are paid. If you leave without paying, the automobile is returned to the dealer. In this case, you will have to restart the whole procedure to lease another one.

The monthly installments in leasing a car are more affordable than if you choose to take a loan for it. Because you have to pay for the amount of value that the automobile depreciates during the lease duration as opposed to paying the original cost.

Its working is given below:

• You may lease a new automobile for $20,000 per year
• The car loses its value since 3 years have a lease value of about $8000 per month
• The automobile costs $12,000 by the end of a 3-years lease

Loan

Most Canadians purchase new cars via an auto loan, which is undoubtedly the most popular method. Getting loan means if you have only $6,000 in savings but the car you want costs $25,000, then put $6,000 as a down payment and get the loan on the remaining $19,000.

Repaying the debt operates as follows:

• Paying loan payments monthly runs for a longer duration, but yes, you have to pay less per month than leasing. In this way, you pay more as a whole relative to leasing
• Your credit score and loan duration determines the exact loan rate you’ll be charged
• Manufacturers may also provide special incentives for lower lending rates

Loans typically last for five years, but you can make this duration shorter by paying earlier to avoid extra interest payments. After the whole procedure, you obtain your car on loan.

Cash

It would be best to have a good credit score to enjoy a lease or loan. A credit score effectively rates your reliability to banks and lenders in terms of your ability to repay them if they give you a hefty amount.

As a new immigrant, you’ll definitely be unable to show a credit history. So, you’ll face hurdles and difficulties in leasing or lending a car. There are several strategies to increase your credit score ASAP, but there are some fundamentals:

• Banks and lenders are the secure approaches to building your initial credit record and proving your reliability
• Pay your normal bills like rent, gas, mobile phones etc., before the due time
• Select quick loans and ordinary credit cards, and make complete payments on time

It all needs one year to clear and enhance your credit history to own auto finance. If you can’t wait, earn more and more and save all your earnings to buy your dream car.

Car Registration

Purchasing a new or used automobile offers you an absolute sense of independence and allows you to move freely from here to there. Overall, it is a thrilling endeavour. 

Following are the documents that you may need during car registration:

• A driving permit
• The buyer’s and seller’s signatures on the bill
• Document transferring ownership
• Certificate for safety driving and inspection that every province represents in its own way
• Title certificate
• Pink slip
• License plate number
• Additional car details
• Sales tax payment

It would be best if you took care of any outstanding penalties or parking citations since virtually all provinces, like Ontario, demand payment to register your car.

Programs For Immigrants/Non-Citizens Looking To Buy A Car

Remember that the banks and automakers in Canada are familiar with all the challenges that you may face in purchasing a car after landing here in Canada. These issues can create obstacles in settling and adjusting to new lives and careers.

To assist you, these banks can apply in a program for you on your first car purchase or after three years when you own Canadian citizenship. The Royal Bank of Canada (RBC) and Scotiabank offer initiatives to assist newbies to Canada.

But the following are some problems with these programs and schemes:

• You can take a loan on a limited amount of car price
• A larger down payment is required
• Maximum interest rates

But don’t worry, as newbies get special incentives and offer from automakers on making their first purchases. If the cost price of a car ranges from $500 to $1000, you get flat off on automobiles.

Money Saving Tips When Buying A Car

Even if you have ideally established your budget, purchasing an automobile within your predetermined range is advantageous.

Avoid Impulsive Buying

It’s your luck if you find your ideal car immediately otherwise you have to visit more and more. When you purchase a car on a whim, you risk overspending or purchasing a vehicle that may not be ideal for you.

So, properly investigate and compare pricing for your desired automobile. 

Don’t Buy Any Add-Ons At The Dealership [Extended Warranty]

If you visit a showroom, you’ll probably encounter aggressive sales clerks trying to sell you anything. They sometimes make a product attractive by putting layers of paint or anything on it. Hence, in reality, they are in earning their profit only.

Greater final costs and maximum repayments time result from the addition of extra elements and offers, which are themselves so costly. These offers and warranties are incredibly alluring. Aren’t they? 

Put the money you would have spent on the warranty into a savings account for auto upkeep. So try negotiating a price for auto maintenance now. If you decide to do this via dealers, it will provide another source for them to grab money from your hands.

Be careful, as playing right can provide you something like a monthly free oil change of your car. 

FAQs

Conclusion

Finding the necessary funds to purchase a car adds to the complexity of the transition to another nation. All of the newbies are not equally able to get a car immediately after immigration. Some people need some time to stand enough to own a car.

Nowadays, purchasing a used automobile rather than a brand-new one has many benefits. So always check your budget and benefits before getting a car. You also have to meet other living expenses besides the car’s expenditures to live in Canada. 

We hope this guide might have assisted you in getting ready to pick each tip and follow every step along the road. These tips may allow you to complete the entire procedure as quickly as possible. 

Please invest your time in finding the best car for you. Come to us for suggestions on OnTheMoveCanada, or leave your comments below. We’ll reach out soon. Have a great day! Thank You!