Buying a car in Canada as a new immigrant

Let’s demystify the process.

Car purchase versus car lease for new immigrants to Canada

When you purchase a vehicle, you own it. Leasing is like renting; you will have use of the car for a specific period of time and must return it at the end of the lease period in good condition (or buy the vehicle outright). Although leasing means you will finance less, interest rates are typically higher, and the contract will come with a kilometre limit. Learn more about financing versus leasing.

New car versus used

A new car will cost you more but will come with a full warranty. Used cars are often an attractive alternative because they’re cheaper. However, the warranty won’t be as extensive (if one is even offered). With a used car, you are also more likely to experience mechanical problems sooner.

Dealership versus private seller

A dealership offers choice, security and convenience. They will do all the paperwork for you and provide you with a new license plate (if needed). If they are selling you a used car, it has likely gone through a multi-point inspection process to ensure a worry-free transaction.

With private sellers, you have no guarantees at all, and they will only accept cash.

Documentation required by law

You must have a driver’s license, car insurance, and vehicle registration in order to own a car. Proof of insurance is also required before you pick up the vehicle.

As a new resident, your existing driver’s license is good in Canada for 60 - 90 days (depending on the province you’re living in).