Buying a car in Canada: Complete guide for expats and residents

Can a foreigner buy a car in Canada, and if so, how? This guide covers all you need to know. Plus we’ll touch on how Wise can help expats and residents manage their finances when making significant purchases like cars in Canada, offering competitive exchange rates, low transfer fees, and transparent pricing that can help you save money compared to banks

Key takeaways

• You can buy and register a car in Canada as a foreigner but in some provinces and territories you’ll need a valid local driving license to do so
• When you register your car you must provide a set of documents to prove legal ownership and pay fees which vary depending on vehicle type and other factors
• You may be able to drive in Canada using your foreign license for a short period before you need to convert to a local license – this depends on the area you’re living in
• Once driving you need to carry your driving license and registration in the vehicle – in some provinces and territories you also need registration stickers on your license plates
• It’s mandatory to have at least third party personal injury insurance which you can arrange through a broker
• To make a major purchase like a car in Canada, you may find you get a better deal if you pay with Wise. Wise lets you convert currencies with the mid-market rate and low fees, great if you’re buying as an expat

How to buy a car in Canada: Step-by-step process

Let’s jump right into the detail – here’s how to buy a car in Canada in a few simple steps:

1. Set a Budget and Secure Funding:

The price of buying a car in Canada can vary enormously depending on the vehicle type, age and condition. To make the purchase process easier, it helps to start with a realistic budget. You can choose to pay for your new car in Canada in cash, by taking out a loan in Canada or in your home country, using a hire purchase scheme or by getting dealer financing for example.

Each option has its own advantages and disadvantages – if you’re sending money from another country to Canada to pay for your new vehicle, check out Wise as a low cost secure route to transfer funds online and through the Wise app.

2. Research and Select a Vehicle:

Now you know what you have to spend, you can research which car suits your needs. There are plenty of sites online to inspire you – consider whether you want to buy new or used, and then invest some time searching and filtering the options on dealership websites or umbrella resale sites in your local area.

3. Due Diligence and Inspections (Crucial for Used Cars):

When you buy a new car from a dealership you have a point of contact if you’re unsure about the vehicle history or condition – but buying second hand through a private sale means taking the time to check the car out yourself.

Important steps include checking the vehicle and its history, which you can do with sites like Carfax. You can generate a report on the specific vehicle which covers previous owners, accidents and other important factors which can impact the vehicle value and safety.

When you view the vehicle be sure to get a good feel for the condition it’s in, and consider having a mechanic check it over to spot any issues you may not immediately see.

4. Gather the Documentation:

When you purchase the vehicle the seller will need to pass you some key documents, and you’ll need to register the car in your own name within your local area. The exact process may vary a little from place to place. In Ontario as an example, the buyer must report the change of ownership within 6 days of the sale at a ServiceOntario centre.

5. Secure Payment:

The next step will be to pay for your new car. How you can pay depends on the seller – at a dealership you may be able to pay by bank transfer, cash or cheque. Dealers may accept credit card payments but not all do – and you may find additional fees apply for a card payment, too. Private sellers may prefer a bank transfer or cash.

If you’re paying by bank transfer from a currency other than CAD, Wise can be a good choice with support for fast, secure payments that use the mid-market rate and low, transparent fees.

6. Transfer Ownership and Register the Car:

Once the sale is complete, you’ll need to register the car in your name. This process requires you to have a few documents, but is usually fairly straightforward to follow. Different provinces and territories may operate this step slightly differently, so you’ll need to check the details for the territory or province you live in.

7. Arrange Insurance Coverage: Before you drive your vehicle make sure you have at least mandatory minimum third party personal injury insurance. Most drivers choose to buy a more comprehensive policy for peace of mind – although this does push up the costs.

Who can buy a car in Canada?

You can buy a car in Canada with very few restrictions. You will need a valid driving license and you will be asked to prove you have appropriate vehicle insurance before you drive away from a dealership. If you’re getting car financing you’ll also need additional documents like proof of address and income.

There’s no restriction on non-residents buying a vehicle in Canada provided they can meet all the local requirements including holding adequate insurance and transferring the ownership of the vehicle to their own name.

What are the documents required to buy a car in Canada?

When you buy a vehicle the seller is likely to check your ID and proof of address. Upon exchange of ownership, the seller will pass you the vehicle’s documents so you can register it in your name. There are then further documents needed to register the vehicle with the authorities.

Provinces and territories manage the registration process, so you’ll need to double check the exact details required based on where you live. Generally to register your new vehicle you will need:

• Your drivers licence or an acceptable proof of identity document
• Completed used vehicle information package if relevant
• Proof of purchase (for example, a receipt from the seller or a bill of sale from a used vehicle information package)
• Proof of insurance from an insurance provider licensed in the province or territory you’re registering it in
• The original vehicle permit from the seller with completed transfer portion
• Payment for relevant fees and taxes

If you buy from a dealership, you may find the dealer can give you some support with registering a new vehicle.

You’ll normally need to register your vehicle by visiting a physical location to register your car in person. Check the details based on where in Canada you live.

Is it allowed to use a foreign national driver’s license in Canada?

You can normally use your foreign license to drive in Canada for a short time on arrival, although this does vary depending on the location. Before you arrive you should get an International Driving Permit (IDP) in your home country. An IDP will give you a translation of your licence into French and English.

You can only drive the classes of vehicle covered by your foreign license, and you must carry your license at all times.

Understanding the true cost: Total cost of ownership

The total cost of car ownership in Canada goes beyond the initial purchase costs. Here are some other things to think about:

• Registration Fees: You pay this at the point of taking ownership and registering your new car. Costs vary by location and vehicle type. Check out your local authority website for details.
• Technical Inspection: While it may not be mandatory to have a mechanic look over the car you buy, it’s a good idea to have an expert inspect your vehicle before you hand over any money.
• Mandatory insurance: You must have at least Compulsory Third Party personal injury insurance. Costs vary a lot depending on level of cover, driving history and vehicle type.
• On going costs: Finally, budget for ongoing costs like fuel costs, servicing, repairs, and parking. Fuel costs at the time of research sit around 1.55 CAD per liter.

Transferring money to buy a car in Canada: Fees comparison

Sending money overseas can be a headache with poor exchange rates, hidden fees, and slow transfers. As some providers and banks charge hidden fees, it is important to take a look at the total amount received, instead of only the transfer fees.

Other costs can be added to the exchange rate which can be a surprise – and may mean your recipient gets less than you expect.

Here’s an illustration. Let’s imagine you’re paying for your Canadian car from Europe and need to send EUR to Canada to be converted into CAD and deposited to the dealership.

Here’s what the transfer would cost you for Wise vs ING in France, when buying a popular model of Honda:

	Wise	ING
Honda Civic LX (price in CAD)	31,316 CAD	31,316 CAD
Transfer fees	84.45 EUR	21 EUR
Exchange rate	1.61954	1.60578
Total sent in EUR	19,420.80 EUR	19,523 EUR

As you can see here, the car ends up costing more in EUR if you pay using ING – even though ING has a lower transfer fee for foreign currency wire payments. That’s because ING uses an exchange rate markup – a fee added to the conversion rate.

This is hard to spot but can make a big difference on a high value payment like this. In this case, the markup adds extra costs of 186.89 EUR to the transfer.

Wise can help you save money on international transfers by offering mid-market exchange rates, low fees, and fast, secure payments. Plus if you prefer you can get a Wise Multi-currency Account to hold and manage money in multiple currencies when you live an international lifestyle.

Where to Buy Cars in Canada

Let’s look at some of the different places where people can buy a car in Canada so you can decide which is right for you.

New Car Dealerships

Canada has plenty of chain new car dealerships, operated by different car makers. You can find the local dealerships for the car type you prefer, with a Google search.

When choosing a new car dealership, check for official accreditation and pick a well established dealership which has a good reputation for customer service. Using a dealer may mean you can access good trade-in and warranty options although prices are pretty standard, and so finding a bargain may be harder to manage.

Used Car Dealerships

If you’re buying second hand you can go along to a physical used car dealership close to your home, to look at the vehicles in stock.

You’re likely to come across a broad range of dealership sizes and services – if you’re looking for a warranty or a finance package as well as the vehicle, it’s worth shopping around to find a dealer which can offer everything you need under one roof.

Online Car Purchasing

Online sales platforms like Autotrader offer comprehensive search functions to help you find vehicles you’re interested in from private sellers and dealers.

Looking for your next Canadian car online makes it far easier to compare your options and short list different vehicles. However, the chances are that you’ll need to complete due diligence checks yourself and the platform won’t be able to help if there are issues.

Make sure you understand the legal protections offered by the site you choose before you buy.

Other Private Sellers

Aside from online umbrella sites you may also find private sellers advertising locally, in newspapers and stores, or through word of mouth. If you’re lucky you may find a great bargain, but in this case you’re highly unlikely to have much legal protection and no warranty if the vehicle fails or has issues you were unaware of.

If you’re meeting private sellers, be sure to take precautions for safety, such as telling someone where you are, checking the seller ID, and running a check on the vehicle history in case it can not be legally sold by that individual.

Electric cars and hybrids

Hybrid cars are growing in popularity in Canada, while sales of electric and plug in vehicles have seen some decline.

There were previously some local tax credits for some electric vehicle sales, which have stopped in many provinces at the time of research. However, as these policies and approaches are under review frequently it’s worth checking the most up to date details before you decide to buy.

Car prices in Canada

As you’d expect, car prices in Canada vary a lot, with different pricing ranges for each vehicle category and brand. The good news is that there are several different ways to get a pretty good feel for the costs of your vehicle, particularly if you’re planning on buying new.

One way to get an idea of the costs of new cars is to look on a price aggregation site like Numbeo, which takes user information about costs of living on a country and city level. This data is dynamic and changes frequently to reflect a live picture of the average cost of anything from a beer in a bar, through to a car.

Here’s an idea of the costs of buying a new car in Canada taken from this data:

Car type	CAD average cost
Volkswagen Golf 1.4 90 KW Trendline (Or Equivalent New Car)	33,978.00 CAD
Toyota Corolla Sedan 1.6l 97kW Comfort (Or Equivalent New Car)	28,144.72 CAD

Another option is to pick the type of car you like, and look on a dedicated dealership site. To give an idea, here are the advertised prices for various models of 2026 Honda- one of the most popular car brands in Canada:

Car type	CAD list cost
Civic SI	39,576 CAD
Civic Sedan	31,316 CAD
Prelude	52,961 CAD
Civic Hatchback	35,176 CAD

Importing a car to Canada

Most vehicles sold in countries other than the US and Mexico cannot be imported into Canada.

Cars must be fully compliant with Canadian law, which may mean making extensive changes to your vehicle to allow it to enter the country. Even if the initial outlay for your vehicle is lower elsewhere, you’ll need to weigh up the costs and hassle against any price upside you may get by buying your vehicle in another country.

If you do decide to import your next vehicle to Canada, using specialist importers can help the process run a lot more smoothly vs self-importing. You’ll have an expert on hand to help you navigate all the processes needed, and to make sure you cover all your legal duties properly

Import process and requirements

As we’ve seen, in practical terms, importing a vehicle to Canada from anywhere outside of the US or Mexico is very difficult and only an option under very specific circumstances.

Importing from the US and Mexico is possible but may not be cheap or straightforward. The process of importing a vehicle to Canada from the US or Mexico involves several different costs, which can include:

• Customs duty and/or taxes
• Vehicle registration fees
• Provincial or territory taxes upon registration

To help you decide if it’s worth it in your case, here are the basic steps to importing a vehicle into Canada:

1. Research whether your vehicle can be imported legally and whether you need clearance to export the vehicle from your own local authorities
2. Gather the required documents: Including your own identification, the bill of sale, and the Canadian Vehicle Import Form, also known as the Form-1
3. Get customs clearance by paying all your required taxes – using an agent makes this process far easier
4. Complete inspection – pass an inspection by the Registrar of Imported Vehicles (RIV) in Canada, within 45 days of import
5. Register your vehicle according to the local requirements in your territory or province

Bear in mind that the process can vary depending on the vehicle type and where you import from.

Required car equipment and documentation

You’re required to keep your driving license and the car’s proof of registration with you when you drive in Canada. It’s also legally required to hold adequate insurance – keep either physical or digital proof in your vehicle in case you are asked for it by a police officer.

Some provinces and territories require you to display registration stickers on one or both registration plates. Check the rules in your territory or province to make sure you’re compliant.

Aside from this, there are many recommended items to keep in your car, such as a first aid kit, spare tyre and high visibility jacket. Some items may also be mandated by your provincial or territorial authorities, so do check the details of your local area before driving.

You must ensure that all passengers use seatbelts, and children use appropriate child restraints based on their size, weight and age when driving.

Tips for buying a car in Canada

• Buying a car in Canada means checking the vehicle is being legally sold and is roadworthy – if you’re not confident in navigating the process, buying from a dealer can give peace of mind
• Be wary of offers that are too good to be true. Like elsewhere in the world, Canadian criminals may try to scam car buyers in various ways
• Get your car insured before you drive – brokers can be a good way to navigate an unfamiliar market and get an excellent deal
• If you’re buying from a foreign currency use Wise to send your payment, with the mid-market rate and low, transparent fees

Conclusion

Buying a car in Canada isn’t too hard to do, but it may not work in the same way that you’re used to at home. It’s important to understand the legal requirements to buy and register a vehicle and what you must do to drive it legally in Canada. Plus, as it’s not cheap to run a vehicle, be sure to budget for ongoing costs like insurance, fuel and maintenance.

Save money when you buy a vehicle from abroad, with Wise. Wise can be an indispensable financial partner, for those navigating international transfers and seeking transparent, cost-effective ways to manage car purchase funds. Get the mid-market rate, secure payments and a fast and streamlined service.

Frequently asked questions (FAQs)

How do I transfer money from my home country to pay for a car in Canada?

Check out Wise as a cost effective option for sending money to Canada for your new car. Wise payments can be sent to Canada from 140+ countries with low, transparent fees and the mid-market rate without any mark-up. There are high limits, and fee discounts for large amount transfers. Plus you’ll get help from a dedicated support team for high value transfers if you need it.

How can I avoid losing money on currency exchange when buying a car?

Being ripped off on currency exchange is a major concern for expats purchasing big-ticket items. Choosing a provider which uses the mid-market exchange rate with no hidden fees can help. Wise has a transparent fee structure, competitive rates, and offers the mid-market exchange rate so you suspend less on fees.

Can a temporary resident buy a car in Canada?

You can usually buy a car in Canada as a temporary resident, although you may need to provide a local address to register your new car. Bear in mind that some provinces and territories may require you to get a local driving license very quickly after arriving.

Do I need credit to buy a car in Canada?

You can buy a car in Canada with cash, or if you have a local credit history you may qualify for a loan or financing agreement.

Useful sources for buying car in Canada

(Information last checked on 21st of November, 2025)

• Wise – Low cost international transfers and currency exchange which uses the mid-market rate
• Canadian government – financial risks of buying a car
• Canadian government –
• Canadian government – importing a car to Canada
• Canadian government – importing a car to Canada from countries other than the US and Mexico
• RBC – bank checklist for buying your first car in canada
• Canadian government – driving in Canada