Buying or leasing a vehicle

From: Innovation, Science and Economic Development Canada

Buying a new or used vehicle is a big decision, and there are many things to consider before making a purchase.

Before you start looking for a car, van or personal-use truck, think about what you need. The distances you typically travel, the road conditions (highways versus unpaved roads) and the types of loads you carry, are all things you'll want to keep in mind when determining what type of  vehicle you should purchase. Whether or not you care about how good the vehicle looks, you'll want it to be able to do the job you need it to do.

On this page

• Comparing vehicle prices
• Purchasing or leasing a vehicle
• Buying from an automobile dealer
• Buying a used vehicle
• Choosing an energy-efficient vehicle
• Considering all vehicle expenses
• Signing a contract for vehicle purchase

Comparing vehicle prices

Certain non-profit consumer organizations, such as the Automobile Protection Association, provide their members with important information and services, such as the list of prices that dealerships pay for new vehicles. This information may be helpful to you when negotiating the purchase price of a vehicle. Consumer organizations may ask you to pay a membership fee to access these services, and/or additional user fees, but it may be money well spent if the information helps you to negotiate a lower price for the vehicle.

Consumer Reports and Protégez-Vous (in French only) are also good sources of information when shopping for a vehicle.

Purchasing or leasing a vehicle

Carefully consider whether to buy or lease a vehicle. You can't beat an outright purchase paid in full, but few people today can afford to pay cash in full for a vehicle. This is why you may choose to finance your purchase or to lease the vehicle instead.

Whether you decide to buy or lease, make sure to read the contract carefully. The difference in interest rates and down payments may surprise you. To help you decide which option is best for you, try to determine the total price you will have paid at the end of the loan or lease. Consider monthly payments and get the dealer to disclose all upfront charges. Our Vehicle Lease or Buy Calculator can help you compare the cost of various vehicle ownership options.

You may opt to have a co-signer on a loan in order to purchase a vehicle. A co-signer is someone who shares the risk of the purchase. If someone asks you to co-sign or if you get someone to co-sign for you, think carefully about how this could affect your financial situation as well as theirs.

Buying from an automobile dealer

Take the time to comparison shop. Each dealer may offer you a different combination of price and options on the same make and model. Options are generally sold in packages, which are often predetermined by the car maker. Dealers may try to sell you add-ons like rust proofing, fabric and paint protection, anti-theft and extended warranties.

When you buy near the end of the model year (typically in the late spring or summer), you may not be able to get all of your choices in terms of vehicle colours and upgrades. However, buying at the end of the model year might also mean that you can benefit from manufacturer incentives and rebates or negotiate a better price for the vehicle with a dealer who is trying to clear inventory to get ready for the next model year.

Unfortunately, high-pressure sales tactics are still a problem. Don't let yourself be talked into buying a vehicle that you don't want or can't afford. If you're not satisfied, walk out.

Buying a used vehicle

When buying a used car, you can choose to buy from a dealer or a private seller. Either way, make sure you have an independent mechanic inspect the vehicle and make sure you test drive the vehicle before you buy.

To check if a vehicle model was recalled for safety issues, consult Transport Canada's Motor Vehicle Safety Recalls Database.

Checking the Vehicle Identification Number

The best way to avoid purchasing a "lemon" is to review the past maintenance history of the vehicle before purchasing it.

To do so, ask for the Vehicle Identification Number ( VIN ). You can find the VIN on the dashboard on the driver's side of the vehicle. It's usually visible through the windshield.

You can search for the vehicle maintenance history using the VIN . Some private firms will conduct searches on the vehicle maintenance history for a fee. To find a firm to conduct this type of research on your behalf, try looking up "vehicle history report" in a search engine on the Internet.

Buying a used vehicle from a private seller

When buying a used car from a private seller, some provinces require that the seller provide the buyer with a Used Vehicle Information Package ( UVIP ). Contact your provincial or territorial ministry of transportation to see if these packages are required in your area.

The contents of the package may vary by province or territory. These are examples of what the UVIP package may contain:

• vehicle registration history, including all present and previous owners as well as their municipality of residence
• odometer information
• vehicle lien information (i.e., if there are any liens registered on the vehicle)
• fair market value on which the minimum tax payable will apply
• consumer tips
• vehicle safety standards
• inspection information
• retail sales tax information
• forms for the bill of sale

Additionally, you should ask the seller where they've had the car serviced and request to see any of the service records available.

Buying a used vehicle from a dealer

If buying a used vehicle from a dealer, ask if they have accessed the vehicle's history and if you can have a copy.

Educate yourself on the cost of the vehicle by doing some comparison shopping.

Buying a used vehicle from a curbsider

Curbsiders are sellers who pose as private sellers, but are actually unlicensed dealers. They specialize in off-loading substandard vehicles with tampered odometers or undisclosed accident repairs.

Watch out for multiple ads with the same phone number. There is no recourse against a curbsider. You may think you're getting a good deal, but you may end up with a problem vehicle.

Choosing an energy-efficient vehicle

By choosing an energy efficient vehicle, you can conserve energy, save money and help protect the environment. Visit Natural Resources Canada's page on Energy efficiency for transportation and alternative fuels for tips on choosing a fuel-efficient vehicle and to learn about fuel-efficient driving practices and vehicle maintenance.

Considering all vehicle expenses

Don't forget that the cost of driving includes maintenance, parking, insurance and fuel. When choosing a vehicle, you should make sure to include these expenses as part of your budget.

In major urban centres, many Canadians find that renting a car only when they need one is more cost-effective than buying a car. A number of Canadian cities have car-sharing programs that, for a fee, allow participants to have access to vehicles parked in various locations. The fees are based on distance driven and time.

Signing a contract for vehicle purchase

Remember that the contract you sign with a dealership or used vehicle seller is binding. As soon as both sides have signed, the seller is not usually obligated to let you out of the contract if you change your mind. There may not be a cooling-off period. Before making your vehicle purchase, contact your provincial or territorial consumer affairs office to check what the policy is in your province or territory.