Car ownership is a necessity to make your way around Canada – a country known for its vast landscapes and various terrains – with newcomers no exception to the rule.
Considering this fact, immigration.ca has compiled a handy guide for all new Canada temporary or permanent residents, with useful information on who can obtain a driver’s license, how they can proceed with obtaining a driver’s license, and what buying or renting a car in Canada is like.
Who is Allowed to Drive a Car in Canada?
Canada allows all permanent or temporary residents above the age of 16 with a valid provincially or territorially issued driver’s license to drive a car. Additionally, they need to own valid insurance for their vehicle (which covers costs related to damage to the car incurred during an accident) and carry an original copy of the vehicle ownership permit any time they are driving.
Foreigners, including PRs, study permit holders, and work permit holders, can use an international driver’s license (if they possess one) to drive around the country for some time. They are also recommended to carry an International Driving Permit (IDP) from their home country during this period.
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The exact duration of the international license’s validity depends on the province/territory, after which a license from the home province/territory needs to be obtained:
Alberta: 90 days
British Columbia: 90 days
Manitoba: Three months
Newfoundland and Labrador: Three months
New Brunswick: No validity period
NW Territories: No information available
Nova Scotia: 90 days
Nunavut: No information available
Ontario: 60 days
Prince Edward Island: Four months
Quebec: Six months
Saskatchewan: 90 days
Yukon: No information available
How to Obtain a Driver’s License as a Newcomer to Canada
Most provinces require new candidates to undergo a “Graduated Licensing Program,” under which they have to give a knowledge written exam. Upon succeeding, they will be eligible for a Learner’s Permit, and will be able to drive accompanied by an experienced driver.
They then have to practice for one year, following which they will be able to take a road test and get an intermediate permit. They can now drive alone (without an electronic device and without any alcohol in their system).
Finally, they will be able to take a full license road test, after one year of driving.
Each province has its own specifications, however.
How to Buy a Car in Canada
Car dealerships and online resources should be your go-to stop for buying a new vehicle. Some trusted websites are AutoTrader, Clutch, Kijiji, and Car Pages.
Buying a car in Canada can be a large financial commitment, which can be financed through a personal payment or loan. Loan providers will often check your credit score, background, and proof of a steady income, so it is important to be prepared to prove your ability to pay back as per the payment schedule.
We will now break down the different ways in which you can finance your car:
1. Loans
Loans can be obtained directly from the dealer, wherein a loan agreement is settled between the purchaser and the car manufacturer, financial institution, or a third, independent party.
The other option for loans is to get them from a financial institution, either through a loan or line of credit.
Those with a good relationship with their financial institution may be able to negotiate a better interest rate on a loan or line of credit than they could through a dealer.
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2. Leasing the Car
Leasing a car is the alternative to buying it, and is similar to renting an apartment. Herein, consumers make monthly payments to enjoy temporary, fixed access (usually for a term of three to five years) to the vehicle.
Before entering a leasing agreement, it is important to go over the leasing process and the restrictions that come with them, as per Investopedia.
If the consumer violates the lease’s terms by exceeding the mileage and/or incurring wear and tear to the vehicle, there could be financial consequences for them. On the expiration of a lease, they have the option to buy the car.
3. Rent-to-Own Plan
The government website compares rent-to-own plans to car leases, wherein the consumer agrees to make regular payments for a fixed period of time. They then have the option of returning the car or buying it at the end of the term.
While a car lease involves payments to a third-party financial institution, such as a credit union or bank, a rent-to-own plan relies on payments made directly to the dealership or car rental company.
They are designed for those who have little to no credit, and so the rent paid at the end of the term is usually higher than it would be under a car lease via a dealership.
The rent-to-own company, rather than the consumer, owns the vehicle when they sign up for a plan. They can take the car back or repossess it, then, if the consumer misses their payments. In such a case, the consumer does not receive their money back.