Below is the story of an Australian who moved to Canada and how they bought their car. While they bought their car in Vancouver, some of the parts may be applicable across Canada. Some things do change, like some provinces have insurance controlled by a state owned body (ICBC in BC) and other have privatised it (Alberta for example). Here’s some ADHD notes:
- Buying a car in Canada is similar to buying one in Australia
- Good places to look for second hand vehicles are
- When buying the car, you’ll have to pay tax on the value of the vehicle that you put on the transfer paper. In BC this is 12%, and it varies from state to state.
- You’ll have to get basic insurance, and you have the option to buy extra on top of that. Insurance coverage for the damage you may do to others is in terms of thousands or millions of dollars. IE, basic coverage is for $500,000 while extended can cover you for $1 or $2 million.
Buying a Used Car in British Columbia
When we first arrived in Vancouver, we had planned to buy a car for our stay here (which will be between 3mths and 2 years) but had to rent a car initially to get us going. The rental car was so expensive that it only confirmed to us that buying a car was the way to go, but it seemed like a daunting process as there were so many unknowns about how to do things in this foreign country. Here’s what we learnt, and hopefully you can learn from our experience:
Deciding on a Car
Obviously, your first step is going to be deciding what sort of car works for you and your lifestyle. If you’re travelling alone, you might decide an economical and zippy small car would suit. Or, if you’re like me, you might be travelling with a husband and child, and lots of luggage, so need something a bit bigger. Your budget will also obviously determine the type of car you want to buy. Have a few options up your sleeve so you give yourself plenty of chance to find the right car at the right price.
We had decided early on that we needed a 4wd or AWD, as we plan on heading up into the mountains a fair bit. So our shortlist was a Toyota 4 Runner, or a Subaru Outback or Forester. We wanted something reliable, not too old, not too many kms, with a reasonable re-sale value - and all for under $6,000. Preferably, including rego and insurance. We weren’t sure if this was an impossible ask, but it turned out to be spot on!
Cars in Canada can be amazingly cheap compared to those in Australia. It almost seems like they have a culture of making sure that their cars are less than 5 or 10 years old, and vehicles value plummets as they get older than that. An Outback that would go for $10,000 in Australia seems to go for about half that over here. Of course there is a range and the price you get will depend on how much shopping around you’re willing to do.
Finding the Car
Initially we were planning on buying our used car from a dealer, because we thought it would be good to have a warranty, and they may help us sort out rego and insurance etc. We visited a huge used car dealership and was quickly turned off buy the usual Salesman talk, so walked away from that and thought we’d risk doing it privately. Turned out to be the way to go.
We really only looked on Craigslist for our car (http://vancouver.en.craigslist.ca/). Initially I was a bit sceptical, but now I’m a real convert as it is such a huge marketplace where so many people come together to buy and sell. You can fairly anonymously and non-commitedly ask all the questions you like over email.
(Editors note: Another place to check out across Canada is Kijiji, with the Vancouver site being http://vancouver.kijiji.ca/)
Making the Purchase
The first car we arranged to see (a Subaru Forester) fell through as we were too disorganised and didn’t arrange the funds in time. The car looked good, but the seller had other buyers who had the cash ready so we kissed goodbye to that one. Which brings me to an important point: have a good think about how you’re going to pay. If you’re super organised, you may have brought enough cash over with you. If you’re pretty organised, you may have arranged a foreign currency transfer to a local Canadian bank account (though this takes time, as you first need to set up the bank account, and then set up the money transfer which is a little bit time consuming). If you’re completely disorganised, like me, you have all the money sitting nicely in a Commonwealth Bank account in Australian dollars that you can only access by withdrawing from an ATM $800 at a time, with ugly fees and terrible interest rates. So, I suggest you have a good think about the best way to access your funds BEFORE coming over! (Ed: Check out the CanAussie deal with CanadianForex for transferring your cash)
Anyway, we found another good car on Craigslist, and walked up the road to see it. It was what we were after; we took it for a test drive, had a look at some service receipts and generally looked it over. All seemed good. So we haggled a bit on a price, I handed over a huge wad of cash and that was it. Not too different to the process at home.
Licence Plates / Insurance / Rego
After making the sale, things happen quite differently to at home. Firstly, over here the number plate doesn’t stay with the car. So when a car is sold, the seller unscrews the plates and either a) transfers them to their new/other car, or b) takes them back to an Autoplan agent for a refund (of about $30 I think).
The seller needs to fill out a form which details the change of ownership. It’s a lot like the Rego papers of our cars at home, but rather than being pre-filled by the RTA it’s just filled out by the seller. Then, it’s best if you and the seller go together to an Autoplan agent to transfer the ownership.
Autoplan is another very different system to what we have at home. Autoplan insurance is sold by what is basically an insurance office/broker, owned privately, that displays the Autoplan sign in the window. (Here in North Vancouver, there are at least 20 – it seems like there’s one every block!). These insurance brokers will organise the transfer in ownership, and sell you the third party insurance that you will need to have the car on the road. Autoplan insurance is a state-run insurance scheme operated by ICBC, so if you have an accident, the details get sorted out with ICBC directly, not with the insurance broker you bought the insurance from. Basically all the standard insurance is going to be the same price, no matter where you purchase from as the prices are all controlled by ICBC. It’s only the additional premium insurance that you can purchase, like additional accident coverage, that the prices may vary a little from insurance agent to insurance agent. It won’t change that much though, so it’s not worth shopping around really. (See http://www.icbc.com/autoplan/basic for more info)
You’re given the option of what level of cover you would like to purchase, and you can pay for add-ons such as windscreen protection etc. If you buy only the basics, this insurance is pretty much the equivalent of third party insurance (which covers injury and damage to the other vehicle you damage, but doesn’t cover the repair of your own vehicle). But if you choose some of the optional extras, it’s pretty much the equivalent of comprehensive insurance (which covers injury and damage to the other vehicle as well as your own vehicle). Obviously, you pay for the optional extras.
Which brings me to another important point – reducing your insurance premium. They will give you a discount on your insurance premium of 5% for every year you can prove you had full comprehensive insurance with no claims, up to 40% (ie. 8 years). That’s a big discount! But they’re pretty pedantic, so if you’re keen to save some real money in this way, get organised when you’re at home. Contact every insurer you’ve ever had comprehensive car insurance with, and ask them to give you a Certificate of Insurance, which shows: a) the company letterhead, b) your full name (and/or your partner’s name if you’re buying the car in two names), c) the from and to date of your insurance, and d) your level of no-claim bonus. Make sure you take time to do this properly, and ensure the dates all line up for full years. If you only have evidence of coverage for part of a year, it won’t help in getting you that 5% discount for that year. It sounds pedantic, but if you do it properly before you leave home it could save you some decent money. (To give you an idea of insurance costs, we paid about $500 for 3 months of basic third-party insurance with only a 5% discount.) The other thing to note is that they give you 6mths to gather all this paperwork together after you’ve bought the insurance; if you send the certificates from your insurance companies off to them within 6mths, they’ll issue you with a refund of the discount you’re owed.
(Editors note: Jared here, we came over without letters, but got enough to prove two years of previous coverage faxed/emailed to us and ended up paying about $200/month on our 4Runner with very little discount. I then had a small rear ender with a person who stopped in the middle of an intersection which blew our insurance up to $300/month. This was because we went from getting a discount to them adding a percentage on top. Not cheap! I certainly wouldn’t recommend this.)
While we’re on the topic of saving money, a local told me about the process of “gifting” a car from seller to buyer to avoid paying HST (which is 12%). I’m not recommending that you do or don’t do this, but just letting you know it is possible! This simply involves the seller coming with you when you do your Autoplan paperwork, and they complete and sign a form (you get the form from the Insurance broker) basically saying that they’re giving the car to you as a gift. So on the change of ownership form, they don’t indicate how much they sold you the car for, as by signing this letter they’re saying that it was a gift to you. I was told by a local that the authorities never check the validity of the relationship – but this is a risk you take. So the information’s out there, do with it as you will!
When you’re all done with the Autoplan people, they give you your own set of number plates there and then, for about $20. You just take them with you, screw them straight onto your car, and that’s it! Not too daunting after all…
To discuss this article or to add experiences from other provinces, please use this forum post.
ED: Big thanks to Ange S. for writing this article!
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