Car-Buying 101 for Newcomers to Canada
For many people, buying a car is an important part of moving to a new country. But with so many new laws and customs to learn, it can make car buying a little confusing.
In this article, we explain how to buy a car in Canada so you can get started right away.
Step 1: Assess your needs
Are you one person or a family of six? Do you need a lot of trunk space or is legroom more important? From sedans to SUVs, hatchbacks and minivans, there are many different cars and each is designed to meet different needs. Some cars are fuel efficient, others are powerful. And nowadays there is even Electric Vehicles (EVs) and Hybrid Electric Vehicles (HEVs) choose from.
Before you decide on a car, you should think about your driving needs. The better you know your needs, the more likely you are to find the right car that suits them.
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Step 2: Choose new or used
Once you have a general sense of your needs, one of the biggest questions to ask is whether you should buy a new or used car.
New cars arrive in excellent condition, come with manufacturer warranties and are equipped with the latest features and technology. They are also more expensive.
Used cars vary further. For example, if you buy from a private seller, you may not get a guarantee on it or be sure of the condition of the vehicle. If you work for a company like couplingHowever, you will receive a fully inspected and refurbished vehicle with return policies, protection plans and additional warranties.
There are pros and cons to both new and used, but one of the main benefits of buying a used car is that it doesn’t depreciate as quickly. As we explain in our article Should I buy a new or used car?New cars in Canada lose 20% of their value in the first year alone.
Step 3: Choose a payment method
Whether new or used, there are three ways to pay for a car: cash, financing and leasing.
Cash means you pay the total value of the car in advance. This is the easiest way to buy a car, but most people in Canada don’t have enough money to pay for a car this way. As we explain in our article about How to buy a used cara good rule of thumb is not to spend more than 35% of your gross annual income on a car.
The second option is financing. Financing means that a financial institution (e.g. a bank) pays for the car you want in advance and then you “pay” the bank back in regular installments over time. This is much easier for most people than paying the full amount in cash, but depends on a loan from a financial institution and therefore comes with an additional cost: interest.
There’s a good rule of thumb when it comes to financing, too: Make sure your monthly payments don’t exceed 10% of your monthly after-tax income. If that sounds small, that’s because you also have other recurring expenses like gas and car insurance to think about.
The last option is leasing. Leasing means that you don’t actually own the car, but “rent” it from the manufacturer (or owner) of the car by paying a monthly fee. This is similar to financing in that you’re paying for the car over a longer period of time, but there’s one big difference: at the end of the lease term, you have to return the car or buy it directly from them. Leasing is much less common with used cars.
Each option has different pros and cons depending on your budget and needs.
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Step 4: Find out your credit
To finance a car at a reasonable rate, you need good credit – and if you’re new to Canada, that can be difficult.
Fortunately, we work with several financial institutions who may be able to offer financing terms to new Canadians, even without good credit. Fill out our quick Pre-Approval Form today (no impact on your score) or contact us at [email protected] for more information.
Step 5: Gather your documents
To legally own a car in Canada, you need a driver’s license, car insurance, and vehicle registration. Let’s start with driver’s licenses.
Driver’s licenses are provincially issued. If you already have a driver’s license from your country of origin, you may be able to exchange it for a driver’s license in your province. Research if your driver’s license can be accepted in the province you live in and what additional documents you may need to complete the exchange.
Even if you cannot exchange your old driver’s license, the state authority can take your previous driving experience into account and reduce the requirements for obtaining a new driver’s license.
Auto insurance works a little differently in each province, but is usually simple. Note that you can’t get car insurance without a driver’s license, so make sure you get a driver’s license first!
Last but not least, the vehicle registration. Unlike driver’s licenses and car insurance, which must be completed before When buying a car, vehicle registration takes place while when buying the car itself or immediately afterwards (depending on the federal state). In some provinces, the dealership or car dealership may be able to register the car on your behalf.
Step 6: Start browsing!
Finally, start browsing! You can visit new or used car dealers in person, or save yourself time and stress by browsing online at one of several online car dealerships.
at couplingwe pride ourselves on offering hundreds of quality cars in every style and budget, with seamless delivery to your door.
Also, all of our cars undergo a 210-point inspection and overhaul process to ensure they are safe to drive and exceptionally clean.
Our cars also come with a free 90-day protection plan with additional warranties for peace of mind.
Finally, our cars have a 10-day money-back guarantee, which means that if you don’t like it for the first 10 days, we’ll pick it up for free, no questions asked.
We also work with many of Canada’s largest and most reputable financial institutions to offer financing directly through our website, making the car buying process as quick, convenient and hassle-free as possible.
Welcome to Canada and good luck!
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About clutch
Since our inception in 2016, Clutch has been a key player in modernizing the used car market. Clutch aims to provide our customers with quality vehicles and a hassle-free online car buying experience. We are passionate about cars and offering Canadians a better alternative when buying a new vehicle.