Buying Your First Car

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Moving to a new country comes with many challenges, and buying first car can be one of the most important yet confusing tasks. If you're settling in Canada, navigating the process of buying first car may feel overwhelming due to unfamiliar rules and requirements. This guide will help simplify the steps for buying first car, so you can make informed decisions and drive with confidence. From choosing the right vehicle to understanding paperwork, we’ll cover everything you need to know about buying first car in Canada.

Step 1: Know What You Need for Your First Car Purchase

When buying 1st car, think about who will use it. Are you alone, or do you have a big family? Do you need lots of trunk space or extra legroom? Cars come in different types—like sedans, SUVs, hatchbacks, and minivans—so pick one that fits your life.

Some cars save gas, while others are built for speed. If you care about the environment, look at electric (EV) or hybrid (HEV) options for your first car purchase.

Read More: Top 14 Used Vehicles Under $5k

Before buying 1st car, ask yourself:

  • How many people will ride in it?
  • Do you need space for groceries, luggage, or gear?
  • Do you want to save money on gas or go electric?

The more you know what you need, the easier your first car purchase will be. Take your time—this will help you find the perfect car when buying 1st car in Canada.

Read More: Used Car Prices in Canada
first car purchase

Step 2: New or Used? Advice for First-Time Car Buyers

If you're a first-time car buyer in Ontario, one of your biggest choices is deciding between a new or used vehicle.

New cars offer:

  • Perfect condition with no wear and tear
  • The latest safety tech and features
  • Full manufacturer warranty

But they cost more and lose value fast (about 20% in the first year!). 

Used cars can be smarter for first-time car buyers:

  • More affordable prices
  • Slower depreciation
  • Certified pre-owned options come inspected with warranty protection.
Read More:  Lease a Car in Canada

As a first-time car buyer Ontario, remember:

  • Private sales are risky with no guarantees.
  • Dealers/reputable companies offer inspected cars with warranties.

We cover this in detail in our guide that can help first-time car buyers a lot!

Read More: Used Car Checklist

Step 3: How to Pay for Your First Car Purchase

Now that you've picked your car, let's talk payment options for your first car purchase. As a first-time car buyer, you have three main ways to pay:

1. Paying Cash (Full Amount Upfront)

  • Best for: Buyers with savings
  • Pros: No interest, own car immediately
  • Cons: Not realistic for most first-time car buyers
Read More: 8 Cheapest New Cars in Canada in 2025

2. Financing (Loans for Buying 1st Car)

How it works: The bank pays a dealer, then you repay monthly + interest

  • Good for: Most people buying first car

Newcomer tip:

  • Need 1+ year left on work permit (unless you have a co-signer)
  • Must have a Canadian driver's license

- Budget rule: Keep payments under 10% of monthly take-home pay

Read More: Compare High-Risk Auto Insurance Quotes for Ontario

3. Leasing (Long-Term Rental)

  • Pays monthly but won't own the car
  • More common for new cars than used
  • Good if you like driving newer models often
first-time car buyer

For All First-Time Car Buyers:

  • Compare interest rates from multiple banks
  • Remember extra costs (insurance, gas, maintenance)
  • Get pre-approved before car shopping

This is your complete how can I buy a car payment guide! Whether you're buying 1st car in cash or through financing, choose what fits your budget best.

International Students (On Study permit)

Foreign Workers (on Work Permit)

Permanent Resident

Permanent Canadian Residence

Must Have

Must Have

Must Have

Documentation of Your Status

Must Have

Must Have

Must Have

Down payment Required

15%+

15%+

10%+

Proof of Employment (i.e. paystubs)

N/A

Must Have

Recommended

Co-Signer with Long Credit History in Canada (3 Years+)

Must Have

Recommended

Recommended

 
Read More: Second-Hand Car Finance

Step 4: Get Your Documents Ready for Your First Car Purchase

As a first-time car buyer in Ontario, you'll need three key documents to legally own your vehicle:

  1. Driver's License
  • Issued by your province
  • If you have a foreign license, you might exchange it (check your province's rules)
  • Even if you can't exchange, your past experience may help you get a Canadian license faster
  1. Car Insurance
  • Required in all provinces
  • Important: You need a driver's license before getting insurance
  • Shop around for the best rates as a first-time car buyer
  1. Vehicle Registration
  • Happens during/right after buying 1st car
  • Many dealers handle this for you
  • Varies by province (we have a full registration guide)
Read More: 2025 Canada Car Program

Step 5: Start Shopping for Your First Car

Now it’s time to start browsing! At CarRookie, we’re proud to offer a wide selection of high-quality cars that perfectly match your budget, needs, and special circumstances.

Are you a newcomer or a first-time car buyer with bad or poor credit? No problem! We can help you get approved!

Our process is quick, convenient, and completely stress-free. No matter your situation, we’ll find you the right solution for you.

Welcome to Canada, and best of luck with your car search!

FAQs

Can a foreigner buy a car in Canada?

You can purchase a vehicle anywhere in Canada—including Ontario, Toronto, Alberta, Quebec, Vancouver, Montreal, Saskatchewan, British Columbia, and all other provinces and territories—even as a non-resident. Plus, FFUN Financial provides low-interest auto financing options to help you secure your first car with ease.

At what salary should you buy a car in Canada?

Spend 10-15% of your annual income on total car costs. This include operating costs like  loan payments, insurance, fuel, registration, and maintenance.

Example:

For example, if you earn 60,000 annually, you should spend between 6,000-9,000 per year (or 500-$750 monthly) on all car-related expenses. This guideline helps ensure your vehicle remains affordable without straining your finances.

What's the best way to buy a first car?
  • Consider your lifestyle
  • Consider what you want, new or used car.
  • How much you can afford
  • Which car you want to buy
  • Learn common automotive terms
  • How much initial down payment you can spend
  • Learn common automotive terms
  • Consider a cosigner
  • Negotiate the price
  • Read Your Contract carefully

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