Step-By-Step Guide On How To Purchase A Car In Canada

We already know that Canada is very big, beautiful, and has lots of wide-open spaces, nevertheless, there is limited public transport, especially outside the bigger cities. Are you still wondering why you need a car if you wish to call Canada home? Owning a car in the country is not just a luxury but a necessity.

However, for new arrivals in the country, the process of buying a car may seem like a herculean task. This is why this detailed guide has been made available to you to assist you to make the right decisions. 

We must not neglect the fact that some provinces may have slightly different regulations, this is why this article, irrespective f where you are buying, will outline the general steps for a used or new car purchase. 

First Step: Checking insurance and writing a budget

When purchasing a car in Canada, the first thing you must do is to set a budget and this is usually made up of identifying one of two numbers.
  1. The highest amount of money you are willing to pay to buy a car completely. Now, buying outrightly will lead to purchasing at a cheaper overall cost t, with no financing or interest involved.
  2. The highest amount you can pay monthly as an installment towards the car, and any up-front initial payment.

Insurance: In Canada, you must get auto insurance before you can get behind the wheel of a car, therefore, you must first investigate your eligibility before making a purchase. Some of the things that will count into being eligible for auto insurance are your driving history in Canada and your ownership of a valid license (either foreign or Canadian).

Second Step: Searching for a suitable car

If you wish to buy a car in Canada, there are two usual channels for doing so, they are;

  1. Private seller: This refers to a private individual selling to you his or her vehicle.
  2. Merchant seller: This refers to a business, most likely a car dealership. Once it is a new vehicle, you can purchase it exclusively through a dealership.

Automatic or Manual: In Canada, automatic gearboxes are usually common in vehicles when compared to manual ones. Additionally, you should know that car model that features manual gearboxes will usually be sold for fewer percentage points when compared to models with automatic gearboxes.

Searching Online: Searching online is can ve described as the most efficient way to begin seeking out cars for sale in Canada. Certain websites offer fast and rapid car reviews, alongside their images, prices,  mileage details, and location for easy accessibility.

We have a list of some of the well-known utilized car sale indexing websites in Canada you can employ in finding both new and used cars. They are auto 123.ca, carpages.ca, and autotrader.ca while for private sales of used cars, we have Kijiji and Craigslist amongst others. 

Furthermore, you can estimate the value of a potential purchase when buying a car in Canada through a commonly accepted industry guideline for establishing the approximate average value of used and new cars known as Canadian Black Book listings.  

Third Step: Ensure you test drive and obtain warranty details

It is essential to take any potential purchase for a test drive before buying a car in Canada. A test drive aims to get first-hand knowledge of the present condition and performance of the vehicle. Any reputable car dealer offers a test drive as standard, all you need to do is to hand over a copy of your driving license beforehand.

Most times, the interested customer brings alongside with them an extra individual, either a family or friend who is more technically experienced during the test drive.

You can quickly seize the opportunity to inspect the exterior of the car and find out if there are issues such as body damage, corrosion, defective lights, or bald tires. If it is a used vehicle, you should pay closer attention before and during the test drive to the state of the interior, steering responsiveness, engine performance, electronic dashboard elements, brake efficiency, and suspension.

Warranty: Once you are satisfied with the test drive, the next step is to establish the warranty on the vehicle (if any). In Canada, there is usually a minimum of a three-year basic warranty for most new vehicles, which means that the buyer is entitled to extensive repairs or even a replacement vehicle if any element is subjected to “wear and tear” (such as wiper blades or tires) fail on the vehicle. In the case of used vehicles, there are lots of additional warranties which can be bought as an extra.

Fourth step – For used vehicles, technical inspections, and provincial safety testing 

Once an interested buyer is satisfied with both the test drive and warranty options on the vehicle, the next step is to ensure that all the required provincial safety tests for an initial sale or re-sale like in Manitoba and Ontario are carried out by a reputable mechanic. Upon the sale of a new car, dealerships will typically cover this.

For a used vehicle, irrespective of provincial requirements, after a satisfactory test drive, we recommend an inspection by a reputable mechanic. As a potential buyer, you can go for any of the following options:

  1. Garage Inspection
  2. Mobile Mechanic Inspection

Some car dealers will only permit the temporary removal of a used car from a garage for several hours. We also recommend the use of an independent, third-party mechanic, who has no ties to the dealership. This third-party mechanic will provide a detailed report on the state of the car as it is a routine task for mechanic garages.

The choice of using a mobile independent mechanic inspection is well-known across Canada, especially in cities. With this, there is no need for a potential buyer to drive the vehicle to a mechanic and start waiting for the inspection to be carried out. Whatever report is made known directly to the potential buyer through the phone or email.

Please note that in some provinces such as Ontario, a seller is required to provide a UVIP (Used Vehicle Information Package) when selling a used vehicle. This UVIP is what proves if a car after a crash, was ever rebuilt, salvaged, or is implicated in third-party debts. Of course, this means a red flag for potential buyers. Though this is not mandatory across Canada, related reports are offered through private services like Carproof and Carfax.

Fifth Step- The buying process

If a potential buyer is satisfied with the present state of the vehicle, and the vehicle has also passed all applicable safety tests, the buying and registration processes start. This means that you are finally buying a car in Canada!

If you are buying through private sales, you both should agree and sign a basic contract. Please note that a record of sale i.e listing the details of the vehicle and any deposit paid she be provided, payment is made either through e-transfer or cheque which is the most common way, and ID will be interchanged. After registering the car, the new owner will have to affix the plates received while the seller will remove his or her plates from the vehicle. Then, all the important handover documents which will be signed by both parties will be provided by the provincial registration authorities such as SAAQ in Quebec, ICBC / Autoplan in British Columbia, and so on.

Normally, the happy car dealer usually processes both the retail of the vehicle and the registration process for the buyer. What this m, means is that the buyer can drive away without having to attach a new plate since the existing plate on the car has been registered in the buyer’s name.

Crossing the border

You should know that you can buy a car in the United States and bring it to Canada as long as you take care of a few relevant tips. Please pay attention to the pointers listed below to achieve this task:

  • Ensure that your Canadian car can excel in the U.S. environmental and safety standards.
  • Make sure you check the safety requirements for the state that you intend to live and drive your vehicle in, in the U.S.
  • Take all important documents about insurance, bill of sale, and registration.
  • When you get to customs, expect to pay a 2.5 percent duty on the purchase value of your car.

Moreover, buyers should make sure that all details and variable rates are completely reviewed before signing especially for dealerships facilitating leasing or installment payment plans.

lastly, you should put a call across to your desired insurance provider to make sure that insurance is in place before getting behind the wheel, well this is immediately effective.

In conclusion, with this step-by-step guide, you are sure of avoiding all the hassles about buying a car in Canada. Happy shopping!

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