Buying Your First Car in Canada as a Newcomer

Key takeaways

Average asking prices in June 2026: about $63,000 for a new vehicle and $36,700 for a used one (AutoTrader)
Get an insurance quote before you choose a car: newcomers often pay well above the provincial average
Big banks have newcomer car loans that do not need Canadian credit history, often with 10% to 15% down
Sales tax is added to the price: from 5% in Alberta to 15% in Atlantic provinces
For a used car, check the history report, liens and a mechanic’s inspection before you pay

Do things in the right order

Licence. You need a valid licence to insure and register a car. See our driving licence guide.
Insurance quote. Ask for quotes on 2 or 3 models you like. The price can change your choice of car.
Budget. Add the loan payment, insurance, fuel, parking and maintenance. Try the car affordability calculator.
Financing. Get pre-approved by a bank or compare newcomer programs before you visit a dealer.
Shop, inspect, then sign.

Do you need a car at all? In Toronto, Montreal and Vancouver, transit plus occasional car-share can cost far less. Compare with the car vs transit calculator.

How much does a car cost in Canada?

AutoTrader’s price index for June 2026 put the average asking price at $63,016 for a new vehicle and $36,690 for a used one. Both were about 2% lower than a year before. These averages include trucks and SUVs, so a small car costs much less.

The price is not the full cost. Add:

Sales tax: 13% HST in Ontario, 14% in Nova Scotia, 15% in New Brunswick, Newfoundland and Labrador and PEI, 5% GST plus 9.975% QST in Quebec, 5% GST plus 7% RST in Manitoba, 5% GST plus 6% PST in Saskatchewan, 5% GST plus 7% to 20% PST in BC (by price), and 5% GST only in Alberta and the territories. A private used-car sale has its own rules. Use the vehicle purchase tax calculator.
Dealer fees such as administration, freight and preparation on new cars.
Registration and plates.
Insurance, often the biggest monthly cost for newcomers.
Winter tires, required in Quebec in winter and on many BC highways.

New, used or lease?

New: full warranty and often low promotional loan rates from the maker, but the car loses value fastest in the first years.
Used (2 to 6 years old): lower price and lower depreciation. Many newcomer loans accept cars up to 10 years old (RBC, TD) or 4 years old (Scotiabank).
Lease: lower monthly payment and a new car every few years, but you never own it, kilometre limits apply, and you pay for wear and extra kilometres.

See the full comparison in new vs used vs lease and test numbers in the lease vs buy calculator.

Getting a car loan with no Canadian credit

RBC, Scotiabank, TD and CIBC have newcomer car loan programs, mostly through dealerships. They do not require Canadian credit history if you meet their other rules, such as proof of status, income and a down payment. For example, RBC asks for at least 15% down, up to $75,000, for vehicles up to 10 years old.

Watch out for “guaranteed approval” lenders with rates of 20% or more. Compare the full cost, not just the monthly payment. See car loans with no credit and the newcomer auto loans comparison.

Car insurance for newcomers

Insurance is required in every province. Averages give you a starting point: Ontario’s regulator (FSRA) reports an average premium of $2,164 a year for the 12 months to October 2025. But newcomers with no Canadian record often pay much more, especially in big cities.

Bring proof of your driving and insurance history from home. ICBC can recognize up to 15 years of foreign driving history.
In BC, Manitoba, Saskatchewan and Quebec, basic insurance is public (ICBC, MPI, SGI and SAAQ for injuries). Elsewhere you buy from private insurers or brokers.
Get quotes for the exact model and your postal code before you sign.

Checks before you buy a used car

Vehicle history report. Look for accidents, flood damage, odometer problems and past use as a taxi or rental.
Liens. Make sure no one else has a loan on the car. In Ontario, the seller must give you a Used Vehicle Information Package (UVIP), which shows liens and the wholesale value.
Independent inspection. Pay a mechanic you choose, not one the seller suggests.
Safety certificate. Ontario needs a Safety Standards Certificate to register most used cars. Other provinces have their own inspection rules.
Register on time. In Ontario you must register the car in your name within 6 days of buying it, with proof of insurance.
Tax. Ontario charges 13% retail sales tax on a private sale, on the price or the wholesale value, whichever is higher.

Registration, plates and insurance

You need proof of insurance before you can register a car and drive it away. In Ontario, you register at ServiceOntario within 6 days of buying a used car, with your licence, the bill of sale, the UVIP and a safety certificate if needed. In BC, Manitoba and Saskatchewan, registration and basic insurance are bought together from the public insurer or its brokers. A dealer usually handles the paperwork for you when you buy from them.

Dealer or private seller?

A dealer can arrange financing, usually offers some warranty, and must follow provincial consumer protection rules. You pay GST or HST and the dealer’s fees.
A private seller can be cheaper, but you get no warranty and must do all the checks yourself. Pay by a traceable method, such as a bank draft, and only after you have the signed ownership and the bill of sale.

Either way, test drive the car in city and highway traffic, and check that the VIN on the car matches the ownership papers.

Common scams to avoid

Curbsiders: unlicensed dealers who pose as private sellers to hide problems. Be careful if the name on the ownership does not match the seller.
Deposit scams: “send a deposit and I will hold the car” for a car you have not seen. Never pay before you see the car and the ownership.
Payment-only selling: a dealer who talks only about the monthly payment can hide a long term, a high rate or add-ons. Ask for the total price and the total interest.
Add-ons you did not ask for: rust proofing, extended warranties and protection packages can add thousands. You can say no.

Read every page before you sign. A contract signed at a dealership usually has no cooling-off period.

Common questions

Can I buy a car in Canada without a credit history?

Yes. You can pay cash, or use a bank newcomer program at a dealership. RBC, Scotiabank, TD and CIBC all have programs that do not need Canadian credit if you meet their status, income and down payment rules.

Do I need a Canadian licence to buy a car?

You can buy a car without one, but to register and insure it you need a valid licence. A foreign licence works only during your province’s grace period.

Should I buy new or used as a newcomer?

A 2- to 6-year-old used car usually gives the best value, because the first owner absorbs the biggest drop in value. A new car makes sense if you get low promotional financing and plan to keep it a long time.

How much down payment do I need?

It depends on the lender. RBC asks 15% for newcomers; Scotiabank asks 10% for permanent residents and 25% for foreign workers; TD asks 0% for permanent residents and 15% for foreign workers.

Is it cheaper to buy a car privately?

Often, but you take more risk: no dealer protection, and in most provinces you still pay sales tax when you register. Get a lien check and an inspection.

Sources

Checked against these sources on October 5, 2026. Spotted something out of date? Tell us.

Buying your first car in Canada as a newcomer: complete guide