How to Buy, Insure and Register a Car In Canada

Alternatives to Owning a Car

How to buy a car
by Kim Mc.

Before you buy your own car, consider your needs and the alternatives that may cover them at a much lower cost and with less hassle.

Commuting to Work

If you live in a town or city that’s well serviced by a public transportation network (which Toronto definitely is), you will find that commuting by bus or subway is much less stressful and is cheaper than driving. You may justify using the car if you’re carpooling – sharing a car with one or more colleagues living in your neighbourhood or passing by your home on their way to work.

After public transportation, carpooling is the most encouraged form of commuting because it slashes the environmental toll that a commute takes on the environment. Not only is carpooling a social experience, but it will also make for a more entertaining time than a lonely morning and evening drive.

But commuting is not the only use for a car. Surely, you sometimes need to go grocery shopping or just do not want to rely on public transportation. It’s a fact that a car ride is usually faster than public transportation in the off-peak hours. And because not all of us have helpful neighbours who would always be willing to drive us whenever we need a ride, we might want to have a car that we could use when necessary.

Car Sharing Co-ops across Canada

In Canada, a popular way of not owning a car and still driving is participating in car sharing co-ops. These co-ops organize and manage fleets of vehicles distributed across various locations in cities and suburbs. A co-op member can reserve a car at a specific place for a specific time and he or she can make use of it for the reserved period. Apart from bringing the car back in time for the next member to use it, the only other obligation of a car sharing member is to fill up the gas tank after the ride.

A car sharing member pays a combined fee for the duration of the reservation and the distance driven, which allows the co-op to service and expand the fleet. You can become a member if you have a full class “G” driver’s licence, a clean driving record, and are at least 23 years old. Most car-sharing co-ops charge a one-time membership fee when you sign up, and some may ask for a recurring membership fee to keep you registered as a member/driver.

Use this list of car-sharing organizations in Canada to find and learn more about AutoShare in Toronto, Modo The Car Co-op in British Columbia, the popular CommunAuto in the Québec province, and other popular auto-sharing co-ops across the country.

When you use a shared car, you avoid having to cope with parking, car insurance, car financing, and regular check-ups, and it is environmentally-friendly and cost-efficient as well.

Car sharing — or auto sharing, as it is referred to in some provinces — is a popular way for those who have but a sporadic need for a car to gain convenient and affordable access to a set of wheels. Enjoy the benefits of having a car without actually owning one.

How To Buy a Car in Canada

DeLorean DMC-12 by racin jason

1. Write down your needs and your favourite vehicles. Visit sites like Consumer Reports, JD Power, and Edmunds to research the type of car that meets your requirements. Keep in mind that in Canada, you are not allowed to purchase a car over the Internet.
2. Define your budget. Research leases, purchase options, and resale value. You might consider buying a used vehicle, in that it will cost you less to insure. If you need financial support, you may consider taking a car loan from a Canadian bank, such as the Royal Bank of Canada or the Bank of Montreal.
3. Test drive the car thoroughly and see how it responds to your driving habits. Is it the right one for you? Test it in various conditions, like in city traffic and on an open road and see how easily it turns and brakes. Check its safety features and fuel efficiency. Bear in mind that your insurance rates can be lower or higher depending on the type of vehicle you buy.
4. Before signing a contract with a Canadian car dealership, ask that the buyer’s right to cancel be included. This will prove very valuable/useful in the event that you change your mind about the car, as it allows you to return it shortly after its purchase.
5. After buying your car, you will need to register, license, and insure it. Some dealerships have an on-site insurance broker who can help you with all of the registration, licensing, and insurance paperwork on the same day you pick up the car from the dealership.

TIP Do not throw away receipts, contracts, or vehicle identification numbers (VIN). You will need all or some of these documents in various future steps, like registering the car or selling it.

How To Insure a Car In Canada

Photo by Mo Riza

Purchasing auto insurance for your Canadian car is required by federal law. Before you can attach plates to a vehicle or renew your registration, or buy a temporary (trip) permit, the vehicle must be insured. All drivers must have third-party liability insurance, for which the minimum amount is $200,000, except in Quebec where it is $50,000.

Drivers are also required to have insurance coverage for their own medical expenses and any loss of income which may be incurred as a result of driving-related injuries (this is the case for every province and territory in Canada except for Newfoundland & Labrador).

In provinces and territories across Canada, car insurance is provided by private companies. In British Columbia, Saskatchewan, and Manitoba, the statutory insurance coverage is provided by government-run insurance companies, and the additional insurance requirements by private and government insurance companies.

Regulation regarding car insurance is set by provincial laws, government agencies, and some federal laws. You can find more information about car insurance regulations for each province and territory in Canada here.

For more information about car insurance in Ontario, please click here.

Types of Car Insurance in Canada

• Third-party liability insurance – This type of insurance is compulsory in Canada. It covers, up to a certain amount, any damage due to your own fault to any other party’s property, or pays compensation for a third party’s personal injury and/or death.
• Collision insurance - This type of insurance covers damage to your own car, should an accident occur that is your fault.
• Comprehensive insurance - This type of insurance protects against theft and vandalism.

What you need to provide for insurance

1. Canadian driver’s licence & driving record (International licenses are not enough in many cases)
2. Name & address
3. Information about the vehicle: its make, model, mileage, and registration number
4. Details about past and current insurance providers
5. Official letter from any previous insurance company detailing previous insurance records and any ‘no claims bonuses.’ Some insurance companies do take this information into account.

Find the best and cheapest insurance for your car

Research before you buy!

Compare rates and offers from various insurance companies. Affordable Canadian car insurance is sold by major insurance firms, such as TD Trust. Do not hesitate to ask insurance brokers — they may be able to find a better price for you, as they usually compare the products of many insurance companies. You can also consult some free websites that can compare prices from many companies.

Take a driver’s course or obtain a full licence (G).

If you are a newly licensed driver, you can get a surprising discount in your premiums by most car insurance companies. The same applies if you had a G1 license (written test) or G2 (intermediate) and then you obtain a G licence (full license). Just call your insurance agent and let him or her know. Even if your premiums are not lowered immediately, they will surely be when renewing your policy next time. Do not forget to inform your agent about your valid driver’s license from your country of origin as well as to provide him proof for any previous insurances you had in your country of origin.

Insure all of your cars, or your car and house, with the same company.

Most insurance companies offer significant discounts if you insure both your car and your house, or all of your cars, on the same policy. You can save up to 10 to 15 per cent.

Drive a “low-risk” car and install an anti-theft device in it.

The more likely a car is to be stolen or in an accident, the more you pay for insurance. Besides, some car insurance companies may give you a discount for having extra theft protection on your car.

Drop collision coverage if your car is old.

Compare the value of your collision coverage with your old car’s value. Is it worth the insurance deductible?

Maintain a ‘clean’ driving record

Your driving record directly affects your car insurance rate. The worse your record is, the higher car insurance premiums you will have to pay!

How to make a claim

Car by Topher

1. In the event of an accident or damage to a vehicle, contact your car insurance company as soon as possible. By law, insurance companies must be informed about any collision that has been reported to the police, or that is going to be claimed under the insurance policy. Be aware that some companies specify that they must be contacted within seven days from the day of the accident. When making a claim against another driver, contact their insurance company personally within seven days.
2. Provide the insurance company with all of the necessary details. Most insurance policies require that a written declaration stating “proof of loss” be made within 90 days of the accident. Wait until the insurance company has agreed to pay for repairs.
3. Get an official receipt for repairs, as this may be required by the insurance company to claim back any costs.

How To Register a Car in Canada

What documents do I need to register my car?

You should gather three documents: your driver’s license, certificate of sale, and certificate of title of the car. In addition to these documents, you must also provide your license plate number, odometer reading, and safety inspection number. Be aware that you will be required to provide all of these along with your registration form when registering your car.

What is a ‘pink slip?’

A pink slip is the certificate of title of the car. This slip should have both the seller’s and the buyer’s signature.

Where do I register my car/Where do I find the application form?

This depends on the province/territory in which you have settled. To find out where to register your car in each province/territory, please consult the links on this page. The service representative of the registry will provide you with the registration forms. To find out more about registering your car in Ontario, please click here.

What is the ‘Master Number’ on my application?

It is a fourteen-digit number that consists of the first five letters of your last name plus the day, month, and year of your birth, and three computer-generated numbers. It can be also found as ‘Client Master Number’ and refers to your Driver’s License.

What is a Vehicle Identification Number (VIN)?

The Vehicle Identification Number (VIN) is an internationally accepted code that provides a distinct identifier for all vehicles. It contains information about the vehicle manufacturer, model, year, make, motive power, number of axles, and so forth.

Do I have to pay a fee for the registration?

Yes. The fee includes taxes and varies across provinces.

Do I receive any documents as a proof of my registration?

Yes. After your application is processed successfully by the service representative, you will receive a registration sticker and registration papers. The sticker should be placed in the corner of your license plate, and the papers can be kept in your car.