Have you just arrived in Canada? Depending on where you live, having a car may be necessary. This guide can help you find the right vehicle and get a car loan if you are a newcomer.
Finding a car in the Canadian market can be confusing for someone who is not used to the process. For newcomers to Canada, a little research can go a long way in finding and financing the ideal vehicle.
Here is a guide to help newcomers get started with buying a car in Canada.
Step 1: Define your needs
Think about your needs: how big is your family? Will you use your car for work? What does your daily commute look like? The better you know your needs, the more likely you are to find the right vehicle. Points to consider:
Number of passengers
Safety, number of seats and cargo space are important considerations for families, in which case larger vehicles such as SUVs and minivans may be right for you. If you use your car primarily for yourself and one or two more people, a compact car or sedan may meet your needs.
Use for work
If you need to use your car for work, consider what that means: do you need to transport tools or equipment? Do you go to construction sites or just commute to the train? If your car plays an important role in your job, consider things like reliability, space and power. For example, pickup trucks offer plenty of space and power to haul heavy loads. For short trips, a hatchback, compact or sedan can do the trick.
The climate in Canada
Remember, it’s COLD in winter in Canada. Your vehicle will face subzero temperatures and harsh road conditions from December to March (at least), no matter where you live in the Far North. Choose a car that can drive safely in snow and ice. Front-wheel drive or all-wheel drive vehicles generally have better traction than rear-wheel drive vehicles in poor conditions. Consider having a shovel, snow brush, and traction mats in the trunk to deal with any impromptu snowstorm. It is always recommended to use winter tires during the winter months.
Step 2: Buy new or used?
Once you know your needs, look at which brands and models are right for you. You will then need to determine whether you want to purchase a new vehicle or a used vehicle.
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Nine : the difference lies mainly in the cost. New cars generally cost more to purchase and insure, but they have never been used and come with the latest automotive technology and safety features.
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Occasion : While there are many potential benefits to buying a used car – lower prices and financing costs, for example – there are also potential downsides to this option, such as higher maintenance and repair costs and a shorter lifespan than that of a new car.
To help you choose between new or used, see Buying a car: new or used?
Step 3: Establish your budget
Before you test drive cars, prepare your budget. Owning a car comes with many costs, both one-time and recurring.
Most new residents will likely take out a car loan to pay for their vehicle. You can establish pre-qualification for the car loan in order to have an estimate of the amount you can qualify for.
Pre-qualifying does not guarantee your loan will be approved, but this step will help you budget and understand financing terms.
Tip: When budgeting for a car purchase, keep in mind the additional costs of owning a car:
Owning a car comes with ongoing costs like fuel, insurance, and more. It’s important to plan for the long-term expenses of owning a vehicle. Ongoing costs can turn a vehicle that would fit within your budget into one that would make that budget too tight.
Registration
If you buy a new or used car, you must register it and renew the registration every year. The process differs from one Canadian province to another, as does the annual cost. The registration certificate proves that you are the legal owner of the vehicle and that the vehicle is authorized to operate.
Diesel gas
When it comes to fuel, a fuel-efficient vehicle can help your budget over time. Be sure to ask your dealer or research online to find out if the make and model of your choice has good mileage.
Another interesting option is the electric vehicle (or EV). Electric vehicles are powered entirely by an electric battery, which means they don’t need gasoline. Over time, this option can be less expensive than gas engines – which also produce carbon emissions – and save you hundreds of dollars per year at the pump. Most often, you can charge your electric vehicle for free at a public charging station. You can also invest in installing a charger at your home. Although an electric vehicle is generally more expensive at the dealership, the gas savings can make it a good investment.
Maintenance and repairs
As a general rule, a new car requires less maintenance and repair work. Regular maintenance (oil change, tire rotation, etc.) can extend the life of your vehicle. If you buy a used car or plan to keep your vehicle for a long time, remember that the older the model, the more difficult it can be to repair.
Assurance
Car insurance is mandatory in Canada. In short, insurance is a contract between you and an insurance company to cover costs associated with vehicle damage, injuries to the driver and passengers, or liability for damages. or injuries caused in the event of an accident. When you’re ready to buy your car, you can research car insurance by contacting insurance agents or brokers, visiting insurance company websites, or using online comparison tools.
Step 4: Buy online or from a dealership?
Nowadays, there are many sites and apps available for researching and purchasing online. Although every site is different, this solution can help you streamline your choices by easily comparing different cars and reading reviews from independent buyers. When you’re ready, you can even purchase online.
On the other hand, going to a dealership will give you the opportunity to test drive vehicles. You may be limited to a few brands, but when it comes time to negotiate price and terms, the seller may be motivated to make a deal.
Step 5: Get a Loan
In Canada, dealerships can provide car loans, so you don’t have to go through a bank. Your loan can be taken out at the dealership, saving you the hassle of borrowing money from a financial institution like a bank, credit union or online lender.
Don’t forget to ask about the flexibility of the repayment terms: Can you repay the loan early without penalties? What is the frequency of payments: weekly, fortnightly, or monthly? Can you choose the duration of your repayment?
Several financial institutions also offer auto financing options for immigrants, with no credit history requirements and flexible repayment options.
Newcomers may be eligible for an RBC car loan even if they have no credit history in Canada.* Visit the RBC Car Loans for Newcomers to Canada site to learn more about loans- car and calculate your loan payments.
* Offer reserved for permanent residents and temporary foreign workers who have lived in Canada for less than three years. A down payment of up to 15% may be required. The maximum financing term is 96 months and the loan limit is $75,000. Note: for investors in the permanent resident category, no ceiling applies to the loan amount. Credit history is not required for vehicles less than 10 years old, provided you meet the eligibility conditions and credit criteria applied by the Royal Bank of Canada.
This article is intended to provide general information only and is not intended to provide legal, financial or other professional advice. Please consult a professional advisor regarding your particular situation. The information presented is believed to be factual and up to date, but we do not guarantee its accuracy and it should not be considered an exhaustive analysis of the subjects discussed. The opinions expressed reflect the judgment of the authors as of the date of publication and are subject to change. Royal Bank of Canada and its entities do not promote, either explicitly or implicitly, the advice, opinions, information, products or services of third parties.
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2023-12-06 00:40:52
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