The Financial and Consumer Services Commission (FCNB) has some tips for New Brunswickers buying a new or used car. FCNB often gets calls from New Brunswickers consumers who are second guessing their purchase decision or have felt rushed into a purchase, without proper time to review the purchase and/or credit agreement.
While the prospect of owning a new car is exciting, FCNB encourages New Brunswickers to use the following best practices before agreeing to purchase and signing documents to purchase a car.
- Can you afford it? Buying a car is more than just being approved for the loan. How many months/years are the payments? What is the interest rate? How much is the car going to cost you in the end? Do you think you will still want to make new car payments on the car after it is several years old? On top of the cost of the loan – there is also insurance, maintenance and fuel to consider.
- If you are buying on credit: make sure you understand what the transaction will cost you over the lifespan of the loan. This is especially true if you owe money on a vehicle that you are trading in and will roll into the new loan (also known as Negative Equity Financing). In these cases, the amount you owe on the loan will be more than what the vehicle is worth and can have serious consequences if you default on your loan for any reason.
- Tell the truth about your income. Ask yourself before you sign on the dotted line - Are you being honest about your income? Sprucing up your application with an inflated income can seem like a good idea but it could have major consequences. Understand that if you sign the contract with inaccurate information, you are still on the hook to make payments.
- Get a third-party inspection. If you are buying a new-to-you vehicle, arrange a third-party vehicle inspection. If the dealership isn’t willing to let you make this arrangement, consider it a sign that it may be time to walk away.
- Ask about accident history. If purchasing a new-to-you vehicle, ask for the vehicle’s history, or do a search through companies such as CARFAX or CarProof.
- There is no cooling off period. Many people believe that there is a cooling off period when buying a car. Unless the dealership has a special promotion, this simply isn’t true. Once you purchase the vehicle it is yours.
- Don’t fall victim to high pressure sales tactics. Buying a car is exciting. But take your time, shop around and make sure that buying a vehicle is right for you and that you’ve found the right vehicle for your budget and lifestyle. Ask for a copy of the purchase and/or credit agreement before you sign it. Bring it home and review it and make sure you understand what you’re agreeing to.
It is important to ask questions and be informed when buying a vehicle from a private seller or a dealership. With all the options and details to consider, you may be excited and overwhelmed at the same time. For more information on purchasing a vehicle, consult Buying a Vehicle on the FCNB website.