Buying your first car in Canada

Today we went to a Toyota dealership to take our first car: a certified pre-owned Toyota Yaris 2012, 45000 km, automatic transmission, 5 doors, 3 years official warranty, plus a few nice options my wife didn’t tell me about 🙂

The actual car looks brand new, there is no single scratch on it, the color is the same dark grey. The reason I post a photo from the Internet not the actual photo of a car is simple: it’s late evening in Vancouver, I cannot make a good photo now 🙂

Buying a car in Canada is simple. You come to a dealership and speak to a sales representative. Find a car that looks right for you and ask for a test drive. If this is not a brand new car, you discuss all the service they did, warranty, financing options etc. And apply for a car loan.

Yeah, it is nice to have a great credit rating before you apply for financing. But if you don’t have any… Noone gives a crap if you’re willing to pay a little extra. For instance, our car was priced at about $15K CAD + taxes. We arranged a $6K downpayment and Toyota was very comfortable about it. They offered us a loan at interest rate of 1.9% per annum, ~$520 payment per month for 2 years. Huh, I wish Russian dealerships could offer anything like this.

Documents they required were very simple to collect. Employment verification letter from the company, $500 upfront, a bank draft to pay the rest $5,500, social insurance numbers for me and my wife, driver license of those who will actually drive a car. That is about it.

One extra thing that helps is a reference letter from foreign insurance company that you have a number of years of safe driving. Each year gives you a discount of 5% for your ICBC insurance.

So we applied for a loan on Monday, on Thursday the car was ready for pick up. Since we were busy on Thursday, we arranged to take the car today. In two hours all the paperwork was done and we were good to go 🙂

Car insurance. Insurance here is a complicated and expensive matter. Since we don’t own the car in full yet, we have to insure not only a third-party liability, but the car itself. Medical expenses in case of a car accident might be ridiculously high, so we went for 3 million dollars max coverage with $1000 deductible for both car and liability, and it resulted in $280 of monthly payment for insurance only. Fucking expensive! 😦 But.. lowering the coverage to $1 million (minimum) was not a game changer anyway, it was like $40 saved per month.. Not bad, but it is not something to fight for.

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4 Responses to Buying your first car in Canada

  1. Wow, 15K for 2 years old Yaris is a LOT! I’ve heard that cars are more expensive in Canada.

    Your insurance is also quite expensive. I would say 2 times more expensive than it would be in California. I pay $200 for 2 new cars of total cost ~55K. It’s interesting that the maximum coverage for bodily injuries is 500K in most insurance companies in US. If you want more you need a separate Umbrella policy which is an extra liability insurance for everything (auto, home, rental).

  2. BTW, did you try to reduce the price? It is very common in US that you can reduce the price by 10-15%. I bought 3 cars here (all new) and each one was bought for 10-15% less than its recommended price (i.e. “sticker” price, MSRP).

    Not sure if this applies to used cars. However when I see that the difference between the trade-in price (the price that a dealer pays for a car when buying it from an individual) and the sell price is ~20-30% I imagine that dealers have a lot of space for negotiation.

    • Sasha, it is a lot and we could probably bargain with them to lower the price tag by 1-2K.

      But the car was in a perfect condition, genuine Japanese assembly and I sort of don’t care about the price. All I cared was putting as low down as possible.

      25 years ago they would give me no financing what so ever (there s a number of stories about people coming to America and buying car for all cash a couple decades ago), and today they offered us 1.9% interest rate with no credit history and 30% down.

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