In order to rent a car, you must have a credit card as well as a valid driver’s license.
Driver’s licences and permits fall under Provincial jurisdiction so you must check this out based on where you intend to live. In Ontario, if you’re new to Canada, have been driving for more than two years, and come from the United States, Austria, Belgium, France, Great Britain, Germany, Switzerland, Korea or Japan, you are allowed to exchange your driver’s licence for a Canadian one without taking the road test. However, you must pass the knowledge and vision tests for your province.

All other newcomers applying for a licence, who originated from countries not mentioned above, must present a valid foreign driver’s licence, pass a vision and written knowledge test regarding their province or territory’s traffic rules, pay all applicable fees and provide acceptable proof of identity in order to obtain a Canadian licence.
I suggest obtaining an International Drivers Permit or Licence in your home country which allows you to drive in some Provinces. Generally, you are allowed 3 months driving with an international drivers licence.  This includes those who want to rent a car.

While on the subject of driving, please do check out our driving section on the website it will tell you how you can save up to 40% on insurance in Canada IF you get documents before you leave!

Canadian law requires that drivers involved in a motor vehicle accident must provide assistance to any injured party. If there is serious damage to any vehicle or any personal injury, call 911 or the local emergency number immediately. You must specify whether you want the police, fire and/or ambulance to attend at the scene.

In some cases, if the collision is minor and there are no injuries, the police may not attend the scene. Instead, you may be asked to report the incident at a police station. If possible you should obtain a copy of the police report or at least the police incident number in order to proceed with an insurance claim.
Remember that cars involved in minor accidents should be moved off the road and out of the way of traffic, if possible, to avoid further accidents. If you are involved in an accident, do not leave until you have exchanged names, addresses, licence plate numbers and telephone numbers, as well as insurance particulars, with all other drivers involved in the accident. It is also recommended that you obtain the names and phone numbers of witnesses to the accident.

If you leave the scene of an accident in which you are involved, before providing your name and other particulars, you could be charged with an offence known as “leaving the scene of an accident,” more commonly known as “hit and run.”

If you need to have your car towed away from the scene, make sure you know where it is being taken and how much it will cost, before you agree to it being removed. Do not sign any blank form that authorizes unspecified repairs to your vehicle. As soon as possible, notify your insurance company and provide them with the incident number from the police, as well as the names and contact numbers of the other drivers and witnesses involved. It is also helpful to draw a diagram of the scene showing all vehicles and street names.
Contact the public transit organizations, provincial ministries of transportation, provincial motor vehicle licensing offices or insurance associations listed in the telephone book for further details on driving in Canada.
See also: Prepare for the unexpected by understanding your insurance
 

If you decide to buy a new car but don’t have the full amount in cash, the two options are to lease or to make payments to own. You may choose to lease a vehicle for a predetermined period instead of buying. At the end of the term, you may walk away from the car or buy it depending on the lease agreement you have signed. Most leases carry a mileage limit, meaning you may be charged extra if you rack up more mileage than is stipulated. Make sure you ask what kind of penalty you would face if you want to terminate the lease before the lease period is up.

A benefit of leasing is if you own your own business or are self-employed, you can claim lease payments as a tax deduction.

If you choose to buy, be aware that interest on a car loan for newcomers can reach high percentages. Many car dealers will offer you a loan as an incentive to purchase one of their cars, but it would be best to shop around (both for a car and financing) before you commit. Also, ask what penalty you would face if you were to pay off the loan before the period elapses.

At least until you become familiar with the city and the rules of the road, my advice is to save your money and take public transit. Car operation and upkeep cost a lot of money, whether new or used. Even with a trouble-free vehicle, the cost to maintain it (fuel, monthly payments, insurance, registration and other expenses) can set you back thousands of dollars each year.

When you are ready, I suggest purchasing a used car until you settle into a good-paying job. My first car cost me $1,000 and while it was not the prettiest car in the lot, it took me for my interviews and for grocery shopping, which was the main intention.

Here are some tips when purchasing a used car:

When buying from a used car dealer, try to obtain an extended warranty that covers parts and labour for repairs, for a set time period. Check with the motor vehicle office to see if there is a lien against the car for any amounts of money loaned against it. In the case of a private deal (from an individual seller), it would be wise to have the car checked by the Canadian Automobile Association (CAA). This verifies the vehicle’s ownership and accident history.

Be aware that stolen vehicles are sometimes sold privately. If you inadvertently purchase one, authorities could confiscate it and you may have to face police questioning or worse — conviction for stolen property.

Transferring the title or ownership of a vehicle is straightforward. If you are purchasing from a car dealership, transfer documents will be handled for you. In a private purchase, the buyer and seller must go to an insurance company to arrange the transfer, the insurance, payment of the provincial tax, where applicable, and pickup of a new license plate. 

Your foreign driver’s license may be valid for only three to six months after you arrive in Canada. So it is wise to get an international driver’s license before you leave your home country. Regardless, you will eventually need to take a driving test to obtain a Canadian driver’s license.

Licenses are issued by the province or territory in which you live. In order to receive a license, you must pass several tests: a vision test, a written examination and a road test. In some provinces, a minimum of 30 days is required between writing the knowledge test and taking a road test.

I drove in my homeland for 24 years and yet I still flunked the knowledge test and barely passed the road test here, so I’d recommend studying for your test and taking some driving lessons again. It will make the process easier.
Also, you must be at least 16 years old before you can be tested for a driver’s license in Canada. Some provinces have a graduated licensing system whereby young drivers can be restricted to driving only in daylight hours during their probation period.

When applying for a driver’s license, the following documents may be necessary for proof of name, signature and address: ¦A passport ¦A Permanent Resident (PR) Card ¦Proof of address (bank statement or other public office received mail) ¦A driver’s license from your home country, but an international driver’s license is best

Incidentally, a driver’s license is one of the best pieces of identification you can have since it shows your photograph, signature and address.