The ultimate guide to buying, owning, and maintaining a car for new Canadians

Welcome to the driver’s seat, new Canadian! As a new immigrant, navigating car ownership can be both exciting and challenging. Whether you're considering purchasing a new car, exploring the used car market, or debating whether having a car at all is the right choice for you, we’ve got you covered in this comprehensive guide.  

Below you will find answers to some of your burning questions as a new Canadian driver, including:

How do I budget for my first car in Canada?  

Cars are typically the second most expensive purchase that a person will make in their lifetime, so being diligent about the decision process is key. Here are some considerations that a new Canadian immigrant may want to consider when budgeting for their first car in Canada:

  • Buying a new car in Canada: Investing in a new car in Canada can be an appealing option for those seeking the latest technological advancements, safety features, and a worry-free driving experience with a manufacturer's warranty. However, the higher upfront cost and rapid depreciation are factors that steer some buyers away from new cars and toward a more budget-friendly alternative. Typically, new cars are purchased in-person at dealerships in Canada, but many OEMs (like Tesla, Hyundai Canada, and Honda Canada) and other providers (like Canada Drives, Auto Trader, and Kijiji Autos) offer sales online.
  • Buying a used car in Canada: Choosing a used car in Canada is a practical decision for those looking to maximize value and minimize the impact on their budget. Some may worry about potential wear and tear, but typically this can be mitigated with thorough inspections and vehicle history reports. In Canada, used cars can be obtained at car dealerships, through private sales, or online.
  • Budgeting for car insurance in Canada: Another budget consideration as a driver in Canada is the cost of car insurance. While every province is regulated by different insurers (both public and private), car insurance premiums are typically higher for new Canadian drivers as they have limited driving history in the country.
  • Other costs of owning a car in Canada: On top of the car’s ticket price, it will incur additional expenses for the owner, including the cost of fuel (or hydro for electric or hybrid plug-in vehicles), regular maintenance and aesthetic costs, vehicle registration fees, optional warranty costs, and other administrative fees.

New driver in Canada? GuardTree's warranty is here for you! Click to learn more.

Should I buy or lease a car in Canada?  

As a Canadian immigrant, the decision to buy or lease involves careful consideration of personal preferences and financial circumstances. For one, buying a car provides long-term ownership benefits, allowing you to build equity and drive without mileage restrictions. It's also a favorable choice for those planning to stay in Canada for an extended period. On the other hand, leasing offers flexibility with lower upfront costs and the chance to drive a newer model every few years. This option suits those seeking a short-term commitment and predictable monthly payments. Ultimately, the choice between buying and leasing hinges on your individual needs, budget constraints, and your estimated ownership period.

Should I buy a car at a dealership as a new Canadian?  

Choosing to buy a car at a dealership in Canada comes with its own set of advantages and considerations. Dealerships offer a wide selection of new and used vehicles, often backed by warranties and additional services, providing buyers with peace of mind. The convenience of one-stop shopping, professional inspections, and the availability of financing options makes the process streamlined and accessible. However, the cost at dealerships may be slightly higher compared to private sales due to their overhead expenses. For those prioritizing a comprehensive buying experience, including warranties, financing assistance, and a diverse inventory, purchasing a car from a dealership is a practical choice that ensures a reliable and well-supported investment.

Should I buy a car privately in Canada as a new Canadian?

Opting to buy a car privately in Canada can be a savvy decision for those seeking potential cost savings and a more personalized buying experience. Private sellers often offer vehicles at lower prices compared to dealerships, providing an opportunity for budget-conscious buyers to negotiate and secure a better deal. However, the absence of additional services, like financing options, could be a drawback. It's crucial to conduct thorough research, inspect the vehicle diligently, and be aware of potential risks associated with private transactions. For individuals valuing a direct and potentially more affordable buying process, purchasing a car privately may align well with their preferences and financial goals.

Can I buy a car online in Canada?

In the digital age, buying a car online has become increasingly accessible and popular in Canada. Many dealerships and private sellers showcase their inventory on online platforms, allowing buyers to browse, compare, and even complete transactions from the comfort of their homes. The convenience of online car shopping extends to accessing vehicle history reports, reviews, and negotiating prices, providing a transparent and efficient process. However, it's crucial for buyers to exercise due diligence, verify information, and potentially arrange for independent inspections before finalizing an online purchase. As technology continues to reshape the automotive industry, the option to buy a car online offers a modern and convenient approach for Canadian consumers.

How do I understand the Canadian driving system as a new Canadian?  

For newcomers, becoming familiar with the Canadian driving system is a crucial step toward a safe and seamless experience. Start by obtaining the driving guide issued by the local transportation authority in your province or territory, available online or at their in-person center. This comprehensive guide outlines road rules, traffic signs, and essential driving information specific to your region. Consider taking a driver's education course to gain practical knowledge and confidence on Canadian roads. Additionally, engage in practical experience by observing local traffic, familiarizing yourself with road signs, and practicing driving in less complex areas before tackling busier routes. Staying informed about updates to driving regulations and road safety practices through online resources will further enhance your understanding of the Canadian driving system.

Learn more: A newcomer's guide to navigating the Canadian driving system

How expensive are car repairs in Canada? 

Facing unexpected breakdowns and repair costs can be a concern for car owners in Canada. The expenses associated with breakdowns can vary widely based on the nature and extent of the issue. Common breakdowns, such as engine or transmission failures, electrical problems, or issues with critical components, can lead to substantial repair bills. Additionally, labor costs and the price of replacement parts contribute to the overall expense.

According to GuardTree’s expert team of claims adjusters, these are the typical costs for some of the most common car repairs:

  • Door latch replacement ($260)
  • Window motor replacement ($300)
  • Thermostat replacement ($350 - $600)
  • Wheel bearing replacement ($400)
  • Starter motor replacement ($400)
  • Control arm replacement ($500)
  • Alternator replacement ($650)
  • Water pump replacement ($1005)
  • Rack and pinion replacement ($1600)
  • Transmission replacement ($3,000 - $10,000)
  • Engine block replacement ($5,000 - $15,000)

Read more about repair and breakdown costs: Most common and surprisingly expensive car repairs

How do I protect myself from expensive car repairs and breakdowns in Canada? 

To stay protected from unexpected repair and maintenance costs that inevitably incur for every car owner at some point, many opt for extended car warranties that include breakdown protection. An extended car warranty offers peace of mind by safeguarding against unexpected repair costs.

Car dealerships will offer extended warranties to car buyers who want to remain protected after their manufacturer's warranty expires. For those who purchase a vehicle privately, some extended warranty providers exist that can provide the same level of coverage as one would receive from a warranty supplied by a dealership. For example, GuardTree is a Canadian provider that offers a used car warranty product that can be activated and maintained completely online, without the need for an inspection, which can be convenient for many private buyers.

Another way to help keep yourself protected from the risk of expensive repair bills is to perform proactive maintenance and inspections, and to stay informed about the condition of your vehicle.

Read more:

Stay protected. Save money with an extended warranty. Click to learn more.

Do I need a car as a new Canadian immigrant? 

As a new Canadian, it’s a good idea to assess your lifestyle, location, accessibility to other transportation, and budget when determining if owning a car is necessary. Below is a recap of some of the pros and cons to owning a car in Canada that we covered in this guide to help you make your decision:

What are some of the pros of owning a car as a Canadian newcomer or immigrant?

  • Accessibility in rural areas: In vast and rural areas of Canada where public transportation may be limited, having a car provides essential mobility and access to services.
  • Convenience in winter months: In regions with harsh winter conditions, a personal vehicle offers reliable transportation, especially during snowstorms and cold temperatures, when public transit may be less convenient.
  • Flexibility and freedom: Car ownership provides the freedom to travel at one's own pace and schedule, allowing for spontaneous road trips and the ability to explore various destinations on one's terms.
  • Cargo and passenger space: Having a car is particularly beneficial for families or those needing to transport larger items, offering ample cargo space and accommodating multiple passengers comfortably.

What are the cons of owning a car as a Canadian newcomer or immigrant?

  • Cost of ownership: Cars in Canada can be expensive to own, with costs including insurance, maintenance, fuel, and occasional repairs. These expenses can add up, impacting the overall affordability of car ownership.
  • Depreciation: Cars depreciate in value over time, and the rate of depreciation can vary. This means that the resale value of a car may be considerably lower than the initial purchase price.
  • Parking challenges: Finding convenient and affordable parking, especially in densely populated areas, can be a significant challenge. Limited parking spaces and high parking fees can add to the complexities of car ownership.
  • Public transit alternatives: In some urban areas, public transit options may be extensive and efficient, offering a viable and cost-effective alternative to owning a car. Depending on the city, relying on public transportation might be a more sustainable choice.
  • Stress and maintenance: Car ownership brings responsibilities, including regular maintenance and unexpected repairs. The stress associated with breakdowns and maintenance can be an inconvenience for some individuals.

New Canadian? New extended car warranty.

At GuardTree, we understand the challenges that come with being a newcomer to Canada, but we’re here to help! 

GuardTree is Canada's first monthly subscription-based extended car warranty tailored particularly for used car owners. On top of saving on the costs of expensive repairs and breakdowns, GuardTree also memberships also come with fantastic perks, including roadside assistance, car rentals, and trip interruption coverage.  

Discover what's covered and use our plan calculator to find the perfect coverage that aligns with your needs. Welcome to worry-free driving with GuardTree! 

A new kind of warranty. Sign up 100% online, no inspection needed. Click to learn more.