Buying a car is one of the biggest purchases a person can make – especially if you’re purchasing a vehicle for the first time. Do you buy new or used? How do you avoid scams? What are your rights as a buyer?
To demystify the process, the Star reached out to Terry O’Keefe, director of communications and education at the Ontario Motor Vehicle Industry Council (OMVIC) and Jim Davidson, president & founder of CarSmart a Toronto-based car-buying service and consulting firm.
Here are their top tips when it comes to buying a car for the first time:
Do your research
When buying a car from a dealer, Davidson says many people start backwards by visiting the dealership before doing research.
“That is the worst thing to do, because people often succumb to pressure from a salesperson, misinformation about a car, and ‘today only’ deals that are never real,” he says. “You really need to do your research first, because this process can be a tricky thing.”
O’Keefe agrees, noting the importance of avoiding pushy salespeople at car dealerships.
“If you’re not being listened to by salespeople, OMVIC says shop elsewhere,” O’Keefe says. “You want to buy the car that’s best for you, for your needs, and for your family’s needs — not necessarily what the dealer wants to sell that week. If they’re not listening, move on.”
When doing your homework, keep in mind that online car reviews can be biased or fake. Davidson recommends consulting Consumer Reports, a non-profit organization that works to help consumers make the most informed decisions they can. The “New Car Preview” is dedicated to vehicles, he notes, and is a very helpful guide.
“It’s really tough to find genuine reviews that aren’t negative or fake,” he adds. “Just go straight to Consumer Reports, because they’re really, really good.”
Know your rights
Whether you buy new or used, a car buyer’s rights in Ontario depends entirely on where the vehicle is purchased.
“If you purchase from a registered car dealer, you are protected by Ontario’s consumer protection legislation, by OMVIC, who enforces that legislation, and you have access to the Motor Vehicle Dealers Compensation Fund, which protects consumers for up to $45,000 per transaction,” he says. “Consumers who buy privately forgo all those protections, so it’s really important to be educated if you’re planning to take this route.”
It’s also important to know your rights when it comes to signing contracts for car purchases. Eighty-five per cent of the car-buying public in Ontario incorrectly believes there is a “cooling off period” (or window of time to get out of a contract) after buying a car, O’Keefe says.
“People assume that there’s a ‘cooling off period’ for all kinds of interactions, but there’s not one for vehicles,” he says. “Do not sign a contract unless you are certain you want to complete the sale.”
Go for a spin
Once you’ve settled on the make of car, Davidson says visiting a minimum of three dealerships is critical to getting the best deal – and be clear you want to test drive a car before you consider buying it.
“It’s a total drag and an effort to do this, which is why people get lazy and often pay way too much for their car, leaving thousands of dollars on the table,” he said. “If you want a great deal and a great car that suits your needs, you have to work for it — it’s like anything in life.”
And don’t just take the car for a spin around the block: take any cars you might buy onto the highway, especially if it’s a used vehicle. Bringing a car up to higher speeds can help identify any problems – just make sure you bring someone with you in case you encounter challenges.
Go to a mechanic
If you’re buying a used car, O’Keefe says it’s critical to bring it to a mechanic before making the purchase. Asking for or purchasing a history report is important too, but a mechanic can find things a seller didn’t disclose, or even know about.
“It would be a huge risk to turn money over to a private seller especially without getting a history report or a mechanical inspection,” he says. “If something goes wrong, who are you going to turn to after the fact?”
Taking a car to a mechanic before finalizing a sale can also help weed out scams from curbsiders, or unlicensed car dealers who often pose as private sellers. Curbsiders frequently buy cars from salvage auctions, and don’t register the vehicle in their name to avoid tax, as well as making it harder for them to be traced to the vehicle in the future.
O’Keefe recommends consumers ask some serious questions to ensure they are not being scammed. These include how long the seller has owned the car, if they have maintenance records and why they are planning to sell the car.
Anyone selling a car in Ontario is required by law to provide the buyer with a Used Vehicle Information Package (UVIP), which includes details about the car, including who’s owned the car, its condition and outstanding liens on it.
“You want to make sure that the person who is selling the car is actually the registered owner, so ask to see the ownership for the vehicle and the seller’s driver’s licence,” O’Keefe says. “One of the telltale signs of a curb sider is not to register a car in their name – so make sure you ask for proof.”
Other things to keep in mind
- The OMVIC website (https://www.omvic.on.ca/portal/) has a database of all licensed car dealers, as well as any entity they have ever charged, convicted and even put in jail. If in doubt, check it out.
- When you’re researching the kind of vehicle you want to buy, think about how quickly its value depreciates if you’re planning on trading it in regularly. This can help you avoid wracking up significant negative equity.
- Do your homework when it comes to financing your car to make sure you’re getting the best rate. It’s always a good idea to ask your own bank or lender what their rate is before accepting what’s offered by the dealer.
- Understand “all-in” price advertising. If a dealer advertises a price for a vehicle, it must include all additional fees with the exceptions of HST and licensing.
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