The decision to purchase a vehicle is a big financial commitment. The price of a vehicle does not end when the sticker price is paid. You also need to consider ongoing maintenance and other costs such as repairs, registration, insurance, inspections, fuel, etc.
Consider carefully how you will use the car, how long you plan to own it, how much you can afford to spend and your options around leasing, financing or paying outright for the vehicle. Be sure to check with your insurance company what your premiums will be before you buy.
Visit Buying a New Vehicle or Buying a Used Vehicle to find important questions to ask, red flags to watch for, and Defects and Disputesfor information about your rights and protections after the purchase is complete.
Being involved in an accident can be stressful. Knowing what to do if you are in an accident can make you a smarter driver, and help you avoid potentially costly or harmful mistakes. Download our Auto Accident Report Form (PDF) to record the important details
If you decide to buy a new vehicle, shop around, ask questions and test drive before making your purchase decision. Dealerships may offer a different combination of price and options package on the same make and model.
Be sure to ask about the manufacturer’s warranty and make sure you have a clear understanding of what is (and is not) covered and for how long. Carefully review details of any extended service contract the dealership may offer you and always get those details in writing.
Dealerships are not required to refund any deposits made, should you change your mind. Do not sign any contract or make a deposit on the vehicle until you are completely satisfied with the deal. Don’t let yourself be pressured into a purchase you are not satisfied with or that you can’t afford. Use our free Vehicle Comparison work sheets to compare costs, features and ratings of the vehicles you are considering and to help you in your purchase decision.
If you are buying a used car from a dealership, be sure to read our checklist of questions to ask and red flags before buying any used vehicle.
You may be able to get a great deal when buying a used car – but you have to be prepared to do your homework to avoid problems and disputes down the road. Use our free Vehicle Comparison work sheets to compare costs, features and ratings of the vehicles you are considering and to help you in your purchase decision.
When buying a used vehicle you have the option of purchasing through a dealer or a private seller. Regardless of where you purchase the vehicle, always have an independent mechanic inspect the vehicle and make sure you take if for a test drive.
When buying a used vehicle through a private sale:
there is no guaranteed “30-Day Return” period. Once you drive the car away, it is yours and you become responsible for all costs and repairs associated with the car.
You should always check to see if any remaining manufacture’s warranties are transferable. If the car breaks down after you purchase it, you have no recourse. This is why it is very important to do your homework and ask questions before you hand over any money.
No matter who or where you plan to purchase the vehicle from, always do your homework.
Important questions to ask:
Liens Verify that there are no liens on the vehicle to ensure that a 3rd party is not owed money for the vehicle. For example, if the owner used it as collateral for a loan that is unpaid, the vehicle can be repossessed from you even if you paid full price to the seller. You can check for any liens with the Personal Property Registry System (there is a fee for this service that ranges from $5 to $10).
Deposit If you provide a deposit, ask if you will get it back if you decide not to buy the car. Get this in writing.
Vehicle History Always check the Vehicle Identification Number (VIN) (a unique 17 character serial number) on the vehicle’s registration card and ensure it matches the number on the car. By checking the VIN you will be less likely to purchase a stolen vehicle or one that has been deemed irreparable or unsafe.
Guarantees and Warranties If the seller is offering any guarantees get them in writing. Ask if there is a warranty on the vehicle and review it to ensure you understand what is covered and for how long. Get any details in writing.
Inspection and Maintenance Ask where they had the car serviced and inspected, and ask to see any service records or receipts.
Things to look for when buying a used vehicle:
Test Drives If the seller refuses to allow you to test drive the car before you buy it — walk away.
Pressure Is the seller pressuring you into a quick sale or insisting on a cash sale? If so, reconsider before being bullied into a purchase.
Price and MileageDoes the price sound too good to be true or does the mileage seem too low for the age of the vehicle? If it sounds too good to be true it probably is. Ask more questions to find out why the mileage is so low. If you are uncomfortable or skeptical of the answer, walk away.
Signs of an accident Watch for dents, signs of new paint or chrome, rust, or body fill.
Damaged frame or exhaust system Check for cracks in the frame, rusting or welding. Check the condition of the muffler, tailpipe and exhaust system. Watch for signs of fluids leaking from the car.
Problems under the hood Check for things like cracks in the battery and the condition of belts and hoses.
Many people fall prey to the “30-Day Myth” – thinking they have a 30-day money back guarantee when you buy a vehicle. This is a myth. It is your responsibility to ask about a seller’s return or refund policy before you buy. A business does not legally have to accept returned items or give you a refund unless there has been a major breach of warranty. If a product is defective, you may have the right to return the product, if the retailer is unable to fix the defect and is not able to replace the product.
Manufacturing Defects and Warranty
If you have problems with manufacturing defects or your new vehicle warranty, the Canadian Motor Vehicle Arbitration Plan (CAMVAP) can help. This program allows disputes to be resolved through a binding arbitration process by a neutral and independent arbitrator. The arbitrator hears the case and makes a decision that is fair to both the consumer and the manufacturer. This option is available to you as an alternative to filing a case in court, if your vehicle is four model years old or newer. For more information about program eligibility and the types of results you can expect from CAMVAP, visit www.camvap.ca or call 1-800-207-0685.
What to Do and Not to Do After a Car Accident. Being involved in an accident can be stressful. Knowing what to do if you are in an accident can make you a smarter driver, and help you avoid potentially costly or harmful mistakes.
Important things not to do after a car accident:
Don’t Leave the Scene If your vehicle is involved in an accident and you don’t stop or if you leave the scene you can be subject to criminal prosecution.
Don’t Panic When you are in an accident there are a lot of emotions, confusion and stress that can make it difficult to think clearly. It is important to remember, as difficult as it may seem, to stay calm and not argue with the other drivers or passengers. Take time to record the details of what happened so you can give your story to the police.
Don’t Apologize “I’m sorry”…it’s the quintessential Canadian response. But in the case of an accident, it could be interpreted as taking responsibility for the accident and could be used against you when determining who is at fault. Do not voluntarily assume liability, responsibility, or promise to pay for damages at the scene of the accident.
Don’t Sign Anything Do not sign anything regarding who is at fault. The only document you should sign is the police report.
Don’t be Scammed Unfortunately, some unscrupulous people may prey on those who have just been involved in an accident. Don’t be pressured by unauthorized tow truck operators. If they are demanding payment up front, or trying to pressure you into letting them tow the vehicle to a garage or body shop of their choice you can say no. Ask the police for the name of an authorized tow truck operator and have your vehicle towed to a garage you are comfortable with or a police compound until you can speak with your insurance company.
Important things to do after a car accident:
Do Call the Police The Motor Vehicle Act (s. 130) requires people involved in an accident to contact the police if anyone is injured or killed or if the total property damage exceeds $1000. Likewise, you should call the police if you think that the other person has committed an offence, including impaired driving.
Do Avoid Further Damage If it is safe to do so, move your vehicle to the side of the road. If you can’t move your vehicle, turn on your 4-ways (hazard lights) or use warning cones or emergency flares.
Do Record all Important Information The Motor Vehicle Act (s.127) also requires that a person in an accident provide their name, address, registration and if requested, driver’s licence to the other driver and to provide reasonable assistance to anyone injured in the accident.
Exchange information with the other drivers involved, record the contact information of any witnesses, and take photographs of the accident. Keep a copy of our Auto Accident Report Form in your glove compartment and use it to record the important information that you will need.
Do Call your Insurance Company Call your insurance company as soon as possible to report the accident. Some drivers may choose not to file a claim and to pay out of pocket for any repair work that needs to be done. Be cautious because there is no guarantee that the driver responsible for the accident will agree to the quote you receive or that they will pay the repair bill when it comes due.
If your car is in need of repairs after an accident, your insurance company may provide you with a list of preferred shops whose work they will guarantee. Insurance companies have used this process for many years. They do so for customer safety and customer service by allowing only shops with approved safety standards and levels of customer service on their preferred list. Any auto body shop owner can contact the insurance company to find out the criteria to be on their preferred list and their approval process.
As a customer you can go to your own auto body shop, you do not have to use the services of a preferred shop. You must notify your insurance company before using a different shop. Your insurance company will not guarantee the work. The auto body shop may provide you with a guarantee. You should always ask about warranties and guarantees before deciding where to have the work done.
Choosing the right finance option is about more than making sure the monthly payment fits into your budget. Smart borrowers also consider the following:
The total cost of borrowing
When you borrow money to buy a car the overall price increases. On top of the cost of the vehicle you will be paying interest and may also be required to pay additional finance charges. Before signing a finance agreement make sure you understand how much it will cost you. For more information about the cost of borrowing check out the Credit & Collections page.
The term of the loan
The term of a loan is the amount of time it will take to pay it back. Most dealerships now offer terms up to 8 years. Generally, the longer the term the lower the monthly payments. It may seem like an attractive option to stretch your loan to lower you monthly payments, but that may harm you financially in the long run. The value of a vehicle can depreciate quickly. By extending the term of your loan you may end up owing more on your vehicle than it is worth, if you want to trade it in or sell it before the loan has been paid. The condition of the vehicle will also depreciate over time. As a vehicle ages the cost of maintenance and repairs will likely got up. When you finance your vehicle over a long term you may end up having to pay for costly repairs while still having to make payments on your loan.
Vehicle manufacturers sometimes offer discounts to boost sales or clear out leftover stock. Customers may be given the option of choosing between a low finance rate (sometimes as low as %0) or a cash rebate. In order to get the cash rebate you either have to pay for your vehicle in full or finance the purchase through a financial institution. 0% financing may sound attractive, but it is not always the best deal. If the cash rebate offered by the dealership is more than the cost of financing the vehicle purchase at a financial institution then the cash rebate may be the better option.
Your ability to pay back the loan
Are you confidant in your ability to repay the loan? The cost of your car loan may not change throughout the term but it is possible that the cost of carrying other debts may rise. If interest rates go up, your mortgage or other debts may also go up. Make sure you have room in your budget to adjust for potential increases in your debt payments.