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The best place to buy a car in Canada

Where should you get your next set of wheels? We’ll help you find the best place to buy a car.

These days, buying a car doesn’t necessarily mean going to a dealership. While the traditional approach of visiting a new or used car dealer in person is still an option, you can also buy from a private seller, at an auto auction house or even online – in fact, you don’t even have to leave home to buy your next car.

But with so many options available, where is the best place to buy a car in Canada? In this guide, we’ll break down your car sales choices one by one to help you decide the right option for you.

Quick view: Where to buy a car in Canada

If you’re wondering where to buy a car – whether new or used – the table below outlines your options.

Online dealerIn-person from a new car dealerIn-person from a used car dealerPrivate sellerAuction
CostOften cheaperOften more expensiveOften more expensiveOften cheaperCheap
Speed of purchaseDepends how much you shop aroundCan be time-consumingCan be time-consumingCan be time-consumingVery fast
New cars availableDepends on the dealercheck markx markx markx mark
Used cars availablecheck markx markcheck markcheck markcheck mark
Test drivesTrial period usuallycheck markcheck markcheck markx mark
Ease of purchaseEasyVaries — depends on the sellerVaries — depends on the sellerVaries — depends on the sellerEasy

The 5 best places to buy a car in Canada

  1. Buying a car from an online dealer
  2. Buying a car in-person from a new car dealer
  3. Buying a car in-person from a used car dealer
  4. Buying a car from a private seller
  5. Buying a car at an auction

1. Buying a car from an online dealer

Online car dealerships such as Canada Drives, Clutch and CarDoor allow you to compare and buy cars completely online. Simply browse the dealer’s vehicle inventory on their website, compare models you’re interested in and then place your order.

The car you buy can then be delivered to your door. In many cases, you’ll then have a trial period of around 7–14 days to drive the vehicle and make sure you’re happy with your purchase. Some online dealers also allow you to trade in your current vehicle to put toward the cost of your next car.

The biggest advantage of buying a car online is that it’s extremely convenient. You can compare a wide range of vehicles and prices without having to get off the couch and without feeling pressured to buy. However, making such a major purchase without physically laying eyes on the car yourself is a barrier for some potential buyers.

Check out our guide to online car dealers in Canada to research your online car buying options.

Pros

  • Simple and convenient. You can browse cars online, compare multiple models and buy your next vehicle without leaving the comfort of your couch.
  • Avoid pushy salespeople. When you buy online, you don’t have to deal with the aggressive sales tactics of salespeople who work on commission. Instead, you can shop at your own pace.
  • Trial period. Many online dealers give you a trial period of 7–14 days so you can drive the vehicle you’ve chosen to buy and decide whether it’s right for you. If it’s not, you can return or exchange it.
  • Delivery to your door. Once you’ve chosen the car you want to buy, you can arrange a time to have it delivered to your home.

What to watch out for

  • Non-negotiable prices. Online dealers’ prices are typically non-negotiable, so you don’t have the freedom to haggle and try to get a better deal.
  • Can’t test-drive multiple cars. Unlike when you visit a dealership in-person, you can’t test-drive multiple vehicles back-to-back to see how they compare.
  • Newer models only. Most online dealers tend to stock recent-model vehicles only, so you’ll need to consider other marketplaces for private sellers if you’re looking for older (and potentially cheaper) used cars.
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2. Buying a car in-person from a new car dealer

If you want a shiny new set of wheels and that new-car smell, your local car dealership is likely going to be your first stop to buy a car. You can find dealerships for all major brands in cities and towns across Canada – it’s just a matter of visiting your top choices to start test-driving models.

When you find the vehicle you want, you can then negotiate the purchase price. You can also trade in your current vehicle to help cover the cost of buying a new car, but you’ll probably need to settle for a lower price than you could get if you were to sell privately.

Another option worth considering is buying a demo car from a dealership. Demo models are usually vehicles that have been used as test-drive cars, but they can also be vehicles used by dealership employees or even used as loan cars.

Because demo cars can sometimes have thousands of kilometres on them and a little wear and tear, you can enjoy substantial savings compared to the cost of a new vehicle. And since they’re often used to show off the best a particular model has to offer, they commonly include a range of top-of-the-line features and extras. However, you’ll need to find out exactly how the demo has been used before you buy.

Pros

  • Peace of mind. A new car is just that, new – you won’t have to worry about parts being worn down and it’s much less likely to develop issues as quickly as a used car. You also don’t need to worry about service records, previous body damage or any outstanding finance from the previous owner.
  • Get the best features. When you buy new from a dealer, you can get a car with all the latest features, a new-car warranty and any options you desire.
  • Freedom to negotiate. Some car buyers hate haggling but others love it. And if you don’t mind a little bit of back and forth and playing dealers off against one another, you might be surprised just how much better a price you can negotiate.
  • See and test-drive multiple options. Visiting dealerships in-person gives you the chance to physically sit in each car and run your eye over every feature. You also get the opportunity to test-drive multiple models and compare their on-road performance.
  • Consumer protection. If you buy a defective vehicle from a dealer, you may be eligible for the Canadian Motor Vehicle Arbitration Plan (CAMVAP). There may also be other protections available where you live such as Ontario’s Motor Vehicle Dealers Compensation Fund.

What to watch out for

  • High-pressure sales tactics. Buying face-to-face means dealing with sales staff. Car salespeople may not have the best reputation for honesty or integrity, so keep an eye out for the dodgy sales tactics some dealers use to prey on unwitting customers. You’ll also need to deal with the pressure of sales pitches at every dealership you visit.
  • Premium prices. When you buy new, you’re always going to pay more than you would for a used vehicle.
  • Low-ball trade-in offers. If you decide to trade in your current vehicle at a dealership, expect the dealer to offer you less than what your car is worth.
  • Hassle of visiting multiple dealerships. Shopping for a new car from a dealership takes time. You’ll want to compare multiple makes and models to find the right vehicle and the process can be a time-consuming hassle.
  • Demo drawbacks. If you buy a car that’s been used as a dealer demo, keep in mind that you’re effectively buying a used vehicle. This means you may not enjoy the same peace of mind that comes with a new car. You’ll need to make sure you’re aware of exactly how the demo model has been used before you buy.

3. Buying a car in-person from a used car dealer

A used car may not have the same level of glamour and excitement as a new vehicle, but buying used is a lot more affordable than buying new. You can visit multiple dealerships to compare different models and find the best price. You also have the freedom to negotiate a better price.

The downsides are there’s always the risk of buying a car that’s less than perfect under the hood, while used car salespeople don’t exactly have a reputation for trustworthiness.

Pros

  • Cheaper to buy. You can save thousands of dollars if you buy a used car instead of a new one.
  • There’s value to be found. You’ll find plenty of well-maintained used cars that have been regularly serviced and treated with the utmost care throughout their lives, so it’s possible to find excellent value for money.
  • Plenty of choice. From sedans and SUVs to minivans and pickup trucks and from entry-level to luxury vehicles, you’ll find a wide range of makes and models to choose from.
  • Prices are negotiable. If you’re willing to haggle, you can save more money by negotiating with the dealer to secure a better price.
  • Warranty. When you buy from a dealer, they’ll typically include a vehicle warranty for a specified period or kilometres driven. This can provide much-needed peace of mind, but read the fine print to find out exactly what the warranty does and doesn’t cover.
  • Consumer protection. There are also provincial protections available when you buy a used car from a licensed dealer. Check with the car sales regulator in your province or your local consumer affairs office for more information.

What to watch out for

  • Dodgy dealers. Dealing with used car salespeople who have a well-established reputation for dodgy sales tactics and questionable ethics is enough to put some buyers off visiting used car dealerships.
  • You don’t know what you’re getting. Not all used cars have led trouble-free lives. Mechanical problems, poor servicing history and questionable repairs following previous accidents are just a few of the potential problems lurking beneath the surface.
  • Lack of modern features. Used cars don’t have the same safety tech and driving aids as modern vehicles, so you’ll need to settle for fewer features.
  • Make sure you arrange a pre-purchase inspection. Even if the dealer has performed their own inspection, it’s worth getting a vehicle inspected by an independent licensed mechanic to make sure it’s in good working order.

4. Buying a car from a private seller

Your next option when searching for the best place to buy a car is to buy a vehicle from a private seller. Traditionally, that meant searching for cars advertised in the classifieds section of your local paper or maybe just marked on the side of the road with a for-sale sign on the windshield.

These days, there are plenty of online marketplaces where owners can sell their cars. Some are dedicated car sales websites like AutoTrader and Carpages.c, while others are general marketplaces like Kijiji and Facebook Marketplace.

These sites make it easy to filter cars based on your desired make, model, price and a host of other features. Once you’ve found a car you like, you can contact the seller to arrange a time to inspect it and take a test drive.

Pros

  • Get a good price. Buying privately potentially allows you to score a great deal. When you find a mechanically sound car with all the features you want, you can haggle all you want with the seller and try to negotiate the best possible price.
  • Meet the owner. Meeting the vehicle’s owner can give you an idea of whether the car has been looked after or not. They can also give you a full rundown of the car’s history.
  • Avoid high-pressure sales tactics. You’re less likely to encounter pushy sales pitches when dealing with a private seller rather than a dealer.

What to watch out for

  • Lack of consumer protection. While regulations vary between provinces, there are generally far fewer consumer protections if you buy from a private seller instead of a licensed dealer.
  • You have to do your due diligence. A clear title isn’t guaranteed and you could be buying a stolen car, so you need to check up on the car’s history. You also won’t get a warranty, so having it inspected by a mechanic is critical before you buy.
  • More paperwork. If you buy from a dealer, they can walk you through all the paperwork you need to complete step by step. But if you buy privately, it’s up to you to ensure that you fill out all the necessary forms to transfer ownership.

5. Buying a car at an auction

Buying a car at an auction is the quickest method for where to buy a car and can come with significant savings compared to buying from a dealer. Although many auctions aren’t generally targeted toward private buyers, you can find a great deal if you know what you’re looking for.

You’ll typically get to inspect a vehicle before bidding, but test drives aren’t available. Some cars come with a limited warranty and others won’t – the auctioneer will announce this before bidding begins.

With this in mind, it’s important you research ahead of time and keep a cool head when bidding starts.

Pros

  • Cheap prices. You’ll often be able to save money if you buy at an auction rather than going to a dealership. This is especially the case if there’s limited competition from other bidders.
  • Lots of options. You’ll find a wide range of makes and models at an auto auction, with vehicles to suit a variety of needs.

What to watch out for

  • No test drives. It’s typically not possible to take a vehicle for a test drive prior to the auction. You’ll need to do your research and inspect any vehicle thoroughly before deciding whether to put in a bid.
  • Getting over-excited. There’s always a risk of getting swept up in the excitement of an auction and bidding more than you should or more than you can afford to pay.
  • Can be intimidating. Auctions can be quite an intense experience the first time around, so it takes a little while to get used to understanding how the process works.
  • No warranty. The car you buy often won’t come with a warranty.

Cheapest provinces to buy a car in Canada

The cheapest place to buy a car in Canada is in the Atlantic region, according to the AutoTrader December 2022 Price Index. The 2022 data reveals that the average price of a new car in the region is $53,900, with used cars selling for an average of $44,935.

The next cheapest province to buy a car is Quebec, with average new and used prices of $55,660 and $45,975 respectively.

But it’s bad news for Albertans searching for affordable cars as their province topped the list as the most expensive place to buy a new vehicle. If you’re car shopping in Alberta, expect to pay $63,231 for a new car and $54,859 for a used vehicle.

Cheapest provinces to buy a car based on car sales tax

Car sales tax can have a big impact on the total cost of buying a car in Canada. However, the amount of tax you pay varies depending on where you live and whether you buy from a dealership or a private seller.

Car sales tax when you buy a new or used car from a dealership

When you buy a new or used car from a dealership in Canada, you’ll need to pay GST at a rate of 5% no matter where you live. However, the provincial tax rate that applies on top of GST varies from province to province.

ProvinceProvincial tax rateFederal GST rateTotal tax rate
Alberta0%5%5%
British Columbia7–20%
(7% on vehicles less than $55,000)
5%12–25%
Manitoba7%5%12%
New Brunswick10%5%15%
Newfoundland and Labrador10%5%15%
Nova Scotia10%5%15%
Ontario8%5%13%
Prince Edward Island10%5%15%
Quebec9.975%5%14.975%
Saskatchewan6%5%11%

Car sales tax when you buy a used car from a private seller

ProvinceProvincial tax rateFederal GST rateTotal tax rate
Alberta0%0%0%
British Columbia12–20%
(12% on vehicles less than $55,000)
0%12–20%
Manitoba7%0%7%
New Brunswick15%0%15%
Newfoundland and Labrador15%0%15%
Nova Scotia15%0%15%
Ontario13%0%13%
Prince Edward Island15%0%15%
Quebec9.975%0%9.975%
Saskatchewan6%
(vehicles less than $5,000 are exempt)
0%6%

Where is the best place to buy a car with bad credit?

If you have less-than-perfect credit or no credit at all, you still have options for where to buy a car. While you might have trouble financing a car through conventional loans from banks and credit unions, some lenders specialize in offering bad credit car loans.

Car dealerships and online car loan lenders are some of the best places to buy a car with bad credit. They cater often offer car loans to consumers who are dealing with bankruptcy, bad credit or no credit at all. You may encounter higher interest rates and fees for any loans you are approved for though.

Generally, borrowers with bad credit can qualify for rates that are as low as 10% up to 29.99% or more. The rate you can secure will vary depending on a handful of key factors, including the following:

  • Your financial situation. Your income, how stable it is and your down payment are taken into account when lenders are deciding on your interest rate for a bad credit loan. They need to know you’ll have steady funds to stay on top of repayments.
  • Your existing debt. Lenders will check your debt-to-income ratio to determine whether you can afford repayments. You’ll need to be staying on top of existing debt repayments before you apply to lock in a better car loan interest rate.
  • Your loan needs. Lenders need to know how much you need to borrow, how long it’ll take for you to repay your loan and what type of car you’re purchasing (new vs old).

Do your research and compare loan options to find the best deal.

Bottom line

Finding the best place to buy a car in Canada can save you time and money when you’re ready to choose your next ride. Putting in the effort now will help you find a reliable car with all the right features, without breaking the bank. Remember to also compare financing options for cars to get the most out of your money.

Frequently asked questions about where to buy a car

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