Before You Buy

Vehicle ads include a wealth of important information about vehicle specifications and costs, but can also be quite confusing. Although we all moan about the “fine print,” it’s there because the law requires dealers and manufacturers to disclose everything you need to know about vehicle offerings and financing options. Read on to discover how to interpret ads before you buy:
 

1. Know Who You’re Dealing With

All dealers in Ontario must be licenced by the Ontario Motor Vehicle Industry Council (OMVIC) and obey federal and provincial laws. OMVIC is the regulatory body responsible for protecting consumers, regulating dealers, enforcing the Motor Vehicle Dealers Act and may be able to provide help in resolving disputes. To verify dealer registration visit OMVIC or call 1-800-943-6002. Ontario consumers have no protection if they purchase vehicles privately or if they buy from outside the province – keep this in mind if you see ads from out-of-province dealers or when cruising the classifieds.
 

2. Low Interest Rate Financing

 “Zero percent” or other low interest rate offers are popular, but often you have to pay more for the car if you opt for the low interest rate. This means the true cost of borrowing or leasing may be far more than the ad implies. Make sure you find out how much the vehicle would be if you arranged your own financing. The difference can be considerable.
 

3. Additional Fees

Review ads carefully, especially when comparing deals. All registered dealers are now required to include the total cost of a vehicle being advertised. Also known as "All-In-Pricing", this includes the price of the vehicle and all other charges (except taxes).

Customers will no longer need to factor in administration costs when looking at vehicle ads. “Administration” fees, also known as “documentation fees,” can be catch-alls for a variety of the dealer’s paperwork costs, and can range up to several hundred dollars. Now these costs will be displayed upfront in advertisements.

When buying a new car, you may also be billed for industry-specific taxes, pre-delivery preparation costs, freight costs and anti-theft window etching products. Combined, these fees can add thousands to the advertised price of a vehicle. These fees and costs must be disclosed separately on the bill of sale and in dealer advertisements.

Note: The exception to this is taxes. RST and GST can be omitted if the ad specifies they are not included. Also, manufacturer ads are not covered under these changes, only Ontario-registered dealers.
 

4. Steer Clear of Prohibited Words

Terms such as “going out of business,” “closing,” “bankrupt,” “fleet sale,” “factory price,” “invoice prices,” “supply limited” or “limited time only” imply a vehicle is being sold outside of regular business practices. Dealers can’t use these terms without a full explanation of the situation. Also, dealers whose names include the word “wholesale” are, in reality, retail dealers selling at retail prices.
 

5. Lease or Finance?

Leasing a vehicle may mean you pay less per month than financing the same vehicle, but you have to remember that at the end of the lease, you don’t own the vehicle. Also make sure you understand your lease-end obligations. Do you have to buy the vehicle, or do you get to return it? What are the penalties for excess mileage or excess wear and tear?
 

6. Warranties

Some ads for used vehicles may say “warranty included.” If the warranty is included or you consider buying one, make sure you understand the basics. What’s covered and what’s not? What is the term of the warranty expressed in time and kilometres? Is there a lifetime claim maximum? Also be wary of terms like “bumper-to-bumper,” “inclusive,” “all-inclusive” and “total.”
 
Some warranties may require that you activate the warranty after purchasing the vehicle by calling a special number or paying an activation fee. If you fail to activate the warranty, you may not have coverage. Virtually all warranties will require that you follow a regular servicing schedule and keep your service records. Finally, find out whether the warranty requires that you have warranty work done at a specific location.
 

7. Verify All Fleet Vehicle Disclosures

Late model vehicles offered at an attractive price may be former rentals. Dealers are required to disclose former daily rentals, taxis and police cruisers in advertisements and must also disclose a vehicle’s accident history.

A contract can be cancelled by a customer if this information is not disclosed even if the dealer operated in good faith and did not know.
 

8. Classified Advertisements

Some people prefer to buy privately, but be aware that studies have shown more than 25% of classified ads may be posted by curbsiders (unregistered dealers posing as private sellers who sell misrepresented vehicles to unsuspecting consumers). When you buy privately, you’re on your own with very little recourse if you discover the car has been misrepresented to you.
 
By law, private sellers must obtain a Used Vehicle Information Package (UVIP) from the Ministry of Transportation and show it to prospec-tive buyers. Be sure to see the seller’s UVIP before you finalize any purchase. If the seller doesn’t have the UVIP or if the ownership is in a different name, walk away from the deal.
 

9. Remember: Contracts are Final

Advertisements may get you interested in a vehicle, but a contract obligates you to buy that vehicle and is also final. Ontario law does not provide a “cooling off” period if you change your mind. If you are buying the car subject to certain conditions, those conditions should be clearly stated in writing on the front of the contract. Also take the time to read the contract carefully – it’s both your right and your respons-ibility. If you don’t understand something, ask the dealer for clarification. You can also try to negotiate terms that are better suited for you and ask for amendments to the contract.

However, if certain items were never disclosed to customers, a contract can be cancelled but only if certain criteria are met. For example - if a dealer failed to disclose the vehicle was previously a taxi or daily rental vehicle - this will trigger a customer's right to cancel a contract based on non-disclosure.

10. Do you Know Your Ride?

Know Your Ride is a secondary school program that teaches Ontario’s students about the dangers of buying vehicles privately. The program consists of a DVD for use in classrooms and is supported by materials for both the teacher and student. Copies of the DVD and its accompanying teacher’s kit have been made avail-able in every high school in Ontario. To watch Know Your Ride and order materials for your classroom, click here.