If you plan to immigrate to Canada, one of the first tasks after arriving is purchasing a car. Owning a car in Canada simplifies daily activities like commuting to work, school, and shopping.

Given that purchasing luxury vehicles in some countries, like Iran, is nearly a dream due to exorbitant prices, buying cars in Canada has always been an attractive topic for people from such regions.

Important Consideration

In Canada, cars are not considered investment assets whose value increases over time. In fact, the salt used on roads during winter can damage vehicles, especially those without rust protection systems. Therefore, it's essential to check depreciation rates and future value loss before purchasing.

For example, a European car from 2025 may lose nearly 25% of its value after 50,000 kilometers. Additionally, if the car is financed, you might be paying installments on a vehicle that no longer holds its market value and can be purchased for much less than your monthly payments.

Therefore, avoid rushing into contracts for financing or leasing a car without thorough research.

Buying a car in Canada is affordable and straightforward in terms of price and payment conditions. This guide answers all your questions about buying a car in Canada.

Requirements for Buying a Car in Canada

Buying a car in Canada requires meeting certain conditions and following specific steps:

Step 1: What Documents Do You Need to Buy a Car?

You must present three main documents: a valid driver’s license, a valid car insurance policy, and a vehicle registration certificate.

1. Driver’s License
• If you obtained your driver’s license in another country, you could exchange it for a Canadian license after arriving in Canada.
• To exchange your license, you must provide certain documents, including three forms of identification.

Documents Required to Exchange a Foreign License for a Canadian One:

• A card that proves your residency status in Canada, such as a citizenship card.
• Your previous driver’s license.
• An official letter or document issued within the last six months containing the following details:
• The letterhead or logo of the licensing organization in your home country (e.g., Iran).
• Your full name and date of birth.
• The issue date of your license.
• License number, type, and expiration date.

Note: When obtaining a Canadian license, your original license will be taken and not returned.

2. Car Insurance
• After receiving your driver’s license, the next step is obtaining car insurance.

Documents Required for Car Insurance in Canada:

• The driver’s license number of all family members using the car.
• The car’s model, mileage, and registration number.

Note: Your previous driving records outside Canada are not considered. However, Canadian citizens with previous insurance policies can present formal letters from their respective insurance companies to include in their driving records as valuable experience.

Provincial Public Car Insurance Companies in Canada:

• British Columbia: ICBC
• Manitoba: MPI
• Quebec: SAAQ
• Saskatchewan: SGI

3. Vehicle Registration Certificate
• To finalize the legal ownership of any vehicle you purchase, you must register it in the province where you reside.

Documents Required for Vehicle Registration:

• A valid driver’s license and its 15-digit identification number.
• A valid insurance policy.
• Proof of purchase (bill of sale) and the vehicle’s ownership certificate, known as the Pink Slip.

Note: If you buy a car from a dealership, they typically handle the registration process for you. If you’re purchasing a used car from a private seller, you may need additional documents.

Documents Required for Purchasing a Used Car from a Private Seller:

• Vehicle Information Package (VIP).
• Safety Standards Certificate.
• Emissions Test Certificate.

Step 2: Should You Buy a New or Used Car?

The decision to buy a new or used car depends on your circumstances. Each option has its pros and cons.

Comparison of New vs. Used Cars in Canada:

Step 3: Differences Between Buying from Dealers and Private Sellers

You can purchase cars in Canada either from dealerships or private sellers.

1. Buying from Dealerships:
• Dealerships work as companies aiming to sell cars while maintaining a certain profit margin.

Advantages of Buying from Dealerships:

• Fixed prices include taxes and other costs determined by the manufacturer.
• Access to loans or leasing options based on your credit history.
• A variety of cars (new and used) available.
• Opportunity to negotiate warranties, protection plans, and payment options.
• Thorough vehicle checks with replacements for necessary parts before selling.

Note:

• When buying from a dealership, you must pay a “Delivery Fee,” averaging $400–$600. This fee covers vehicle preparation, technical inspections, and registration paperwork.

2. Buying from Private Sellers:
• Private sellers cannot sell new cars and are not obligated to sell at fixed prices.

Considerations When Buying from Private Sellers:

• Always check the car’s history on platforms like Carfax to ensure no significant accidents.
• Complete transactions in a secure location, such as a bank, to avoid fraud.
• If the seller does not provide valid safety and emissions test certificates, you’ll incur additional costs.

Step 4: Payment Methods for Buying Cars in Canada

You can pay for cars in Canada via leasing, financing, or full payment. Below are details of leasing and financing options:

1. Leasing
• Leasing is like renting a car for a set period (e.g., 2–3 years) and mileage (e.g., 16,000–20,000 km annually).

Key Points to Consider:

• At the end of the lease, you can return the car or pay the remaining balance to own it.

2. Financing
• Financing is similar to installment buying, where you make monthly payments over a set period (e.g., 5–7 years) and eventually own the car.

Recommended Websites for Buying Cars in Canada

• AutoTRADER
• CARPAGES
• KIJIJI
• CARGURUS
• TROVIT CARS

Final Advice: Avoid leasing or financing unless you have a stable income and living conditions. If uncertain, consider purchasing a second-hand car through trusted platforms and communities.

CARFAX Canada is a leading provider of vehicle history reports, offering comprehensive information about used cars to help buyers make informed decisions. Their reports include details on accident history, service records, outstanding liens, and more.

 Accessing CARFAX Canada Reports:

• Online Listings: Many online vehicle listing platforms, such as autoTRADER.ca and Kijiji Autos, feature free CARFAX Canada reports within their listings. Look for links or embedded reports when browsing these sites.

• Dealerships: Numerous Canadian dealerships provide CARFAX Canada reports for the used vehicles they sell. These reports are often available on the dealer's website or upon request at the dealership.

• Private Sellers: When purchasing from a private seller, request the vehicle's CARFAX Canada report. If the seller doesn't have one, you can obtain it yourself using the vehicle's identification number (VIN) on the CARFAX Canada website.

Why Obtain a Vehicle History Report?

A CARFAX Canada report provides critical insights into a vehicle's past, including:

• Accident History: Information on any reported accidents or damage.
• Service Records: Details of maintenance and repairs performed.
• Lien Status: Verification of any outstanding debts associated with the vehicle.
• Odometer Readings: Checks for potential odometer fraud.

This information is vital to ensure you're making a safe and sound investment.

Purchasing a CARFAX Canada Report:

If a report isn't readily available, you can purchase one directly from CARFAX Canada. They offer different report options, including those with lien checks, to suit your needs.

Additional Resources:

CARFAX Canada provides various tools and resources to assist buyers, including:

• Recall Check: Identifies any outstanding safety recalls on the vehicle.
• VIN Decoder: Provides detailed information about the vehicle's specifications.

These tools can be accessed through their website.

As a newcomer to Canada, utilizing CARFAX Canada's services can significantly enhance your used car buying experience, ensuring transparency and confidence in your purchase.