Buying a Car in Canada as a Foreign Expat? Here’s How!
1. Lack of credit history:
Expats will typically want to finance or lease their vehicle in Canada. Unfortunately, it is extremely difficult to obtain credit for an auto loan or lease without any type of Canadian credit history.
If you are able to obtain financing in Canada without a Canadian credit history, your interest rate will be extremely high compared to those with a Canadian credit history. Having the opportunity to obtain a loan or lease with a low interest rate through the International AutoSource partner relationships is an Expat’s advantage. This will avoid you from having to deplete your savings.
Our advice is to provide a 10%-20% down payment and finance or lease within the term of your approved Canadian Visa.
2. Finding the right vehicle:
Selecting the right vehicle is very important and you need to consider what your most important requirements are. This can be determined by asking yourself a few simple questions.
· Where am I moving?
· How many people are in my family?
· Do I prefer to lease or finance a new or used vehicle?
· What is the single most important thing I will require from this vehicle?
By prioritizing your needs it will simplify your choice.
3. Car insurance:
After you have purchased or leased a vehicle you must obtain auto insurance. It is a requirement to have auto insurance in place if you have a loan or a lease on your vehicle. Your auto insurance rate is determined on two factors: your driving history in Canada and your credit history in Canada. Similar to obtaining a loan, obtaining auto insurance as an Expat is difficult as well. Through a unique arrangement with insurance companies in Canada, International AutoSource is able to offer insurance for the same rates a typical Canadian receives in Canada.
4. Obtaining a Canadian Driver’s License:
Obtaining a Canadian driver’s license will be a requirement in some provinces to register and license a vehicle, however, there are a handful of provinces that will only require you to have an overseas or international driver’s license. We suggest that you obtain your overseas/international driver’s license before you arrive in Canada. This will help with the transition to a Canadian driver’s license. In addition, you may be required to take a written test or road test depending on your location. International AutoSource has been assisting expats with their driver’s license needs for many years. We are experts on each Province’s requirements and can provide guidance to securing a driver’s license.
5. Registration and Licensing:
You will have to register your vehicle in your name before you drive it. To register, you will be required to provide a driver’s license as detailed above and proof of insurance. At the time of registration you will be required to pay the sales tax for your vehicle. In Canada, sales tax is not included in the original price and is paid at the time of delivery and registration. If you have leased your vehicle, the sales tax will be included in your monthly investment.
When you obtain your vehicle through International AutoSource, or a local dealership, the registration will be completed for you.
If you purchase your vehicle through a private party, you will have to bring the following documents with you to the Department of Motor Vehicles:
· Title for the vehicle (provided by the seller)
· Bill of Sale or letter from the seller including the vehicle type (year, make and model), selling price and vehicle identification number (VIN)
· Proof of your auto insurance
· Canadian driver’s license or the specific province requirements for those without a Canadian driver’s license
Upon registering the vehicle you will be required to pay the license plates and registration fees, as well as the sales tax on the value of the vehicle. A temporary registration will be issued that is typically valid for 30 days and the official registration sticker will arrive in the mail.
Buying a Car in Canada as a Foreign Expat? Here’s How! Submitted by: James Krulder, General Manager, International Autosource