Expats may assume that buying a car in Canada will need to be one of their first and most urgent purchases. The country is certainly vast. While in certain locations it will be absolutely necessary to purchase a vehicle fairly quickly, Canada’s larger cities often boast world-class public transport infrastructure.

So before perusing the listings and haggling with hopeful car dealers, new arrivals should take some time to evaluate their destination, and to understand the dynamics of the city’s orientation and the means of getting around. 

If deciding that buying a car is a must, one will need to first and foremost organise the logistics surrounding a legal driver’s licence. From there, as in most places, it’s a matter of balancing the push and pull of one's budget with their priorities and requirements. Canada has a robust automobile market, and it’s possible to purchase nearly any type of new or used car.

Buying a new or used car in Canada

Apart from their budget and obvious requirements, expats should consider what kind of purpose their car will serve. If keen to take advantage of the soaring Canadian mountains and national parks, new arrivals may want to flirt with the idea of buying a vehicle with four-wheel drive capability; whereas if primarily interested in something zippy that can fit into the small parking spaces associated with Vancouver or Toronto, then something compact is the best way to go.

Similarly, expats will have the choice of buying a new or used car from a dealership, or a used car from a private seller.

The obvious benefit of buying from dealerships is the fact that even used cars often come with warranties. These service providers can often also help arrange necessary paperwork on site, such as car insurance and vehicle registration. That said, if one doesn't mind putting in a little extra legwork, buying a used car from a private seller can be a great way to bag a bargain.

Car insurance in Canada

Before a person can legally drive their car in Canada, they will need to insure, register and licence their new vehicle. Insurance is required by federal law and is the prerequisite for obtaining registration and licence plates.

Each province has a minimum amount of third-party liability insurance that is required. Similarly, most provinces require drivers to insure for medical expenses and loss of income resulting from a driving-related injury.

Types of car insurance:

  • Third-party liability insurance (for cases where one causes damage or injury to another driver)

  • Collision insurance (for cases where a driver damages their own car)

  • Comprehensive insurance (for cases where one's car is stolen or vandalised)

Getting an affordable car insurance deal

First, any car insurance will depend on a slew of documents that include one's Canadian driver’s licence and driving record, their address, the specifications of their car, information about their past and present insurers (if any), and information about their past claims.

If an expat does not have a full Canadian licence, they should consider getting one as soon as possible after arriving in the country. The more comprehensive one's licence, the lower their insurance fees will be.

Even though a person's insurance fees (premiums) are dependent on their driving skills and driving record, the two most important factors determining the price of insurance are the value and “riskiness” of their car. Cheaper cars will naturally attract lower premiums and more expensive cars will have the owner pay extra. This relationship can, however, be distorted by the probability of one's car being stolen. Some cars are naturally more prone to theft for various reasons and will thus attract higher premiums. On the other hand, installing an alarm and other anti-theft mechanisms into the vehicle will decrease its riskiness and thus the insurance cost.

If driving an old car, consider whether the car’s value warrants the cost of collision coverage. If a car is worth very little, it may not be in one's best interest to pay collision insurance on it. Instead, the owner may just prepare to write the car off if it was to be severely damaged and purchase a new vehicle instead. This way, they might be able to save money on collision insurance without being exposed to too much risk.

Expats should endeavour to maintain a clean driving record, obeying the rules and driving responsibly so that they do not collect traffic tickets or incur damage to their or other people's vehicles while driving. Every offence or accident that a person causes can increase their insurance premiums.