Walsall's Navy Cadet Force will be raising money for McDonalds House, which gives parents visiting Birmingham Children's Hospital a bed for the night, and will be out every night until December 16.
The cadets have been sponsored by Evans Halshaw Ford Walsall who have donated £500 as well as ensuring the new sleigh is roadworthy.
Terry Fitzgerald, from the Navy Cadet Force, said: "We started last night (Monday) and had a great time, we will be visiting areas across Walsall in the next two weeks.
"Our Santa has been looking forward to this all year and we are raising money for the cadets and McDonalds House which is dear to us because one of our staff lost a child a few years ago and knows the good work they do."
He added: "Our cadets also enjoy it, as well as raising money we also give away lollipops to local children who love to see Santa in their street."
Evans Halshaw Ford Walsall manager Ben Middleton said: "We are pleased to give something back to the community, everyone loves to see Santa on his sleigh.
"We will be giving away presents throughout the two weeks and want people to upload photos to our Facebook page when they spot Santa."
He added: "People are going through tough times at the moment and we are hoping to complete Christmas for those in need. The smiles of children when they see Santa is something special.
"We will be posting Santa's route on our socials."
Helen Grayce spotted Santa in Brownhills on his first foray of the festive season.
She said: "That was the loveliest surprise. We were sat wrapping presents and heard "Santa's Coming" so we knocked on every single door so no-one would miss him.
"You made a lot of people happy today."