As Financial Literacy Month wraps up, let’s look at one of the most important steps in buying a car: getting vehicle financing. You've identified the vehicle you want, you've asked all the right questions, you understand how to read a contract: now you need to figure out the best way to pay for your vehicle.

We contacted two experts on vehicle financing, George Iny and John Raymond from the Automobile Protection Agency (APA) to answer some common questions car buyers have.

For the last week of Financial Literacy Month, we’re continuing our discussion on vehicle financing with experts from the Automobile Protection Agency (APA).  We’re looking at two issues: long-term loans and financing a vehicle if you buy a car privately.

The second post in our ongoing Financial Literacy Series for Financial Literacy Month is about negative equity. We answer what you can do to protect yourself against it, how to identify it, and what comes next.

What is Negative Equity in a Car Loan?

The answer to this question is very succinct: Negative equity means owing more for a car than what it’s worth. How you get into negative equity is more complex.

How to Get into Negative Equity

Let's say you decide to buy a car you really like. If you take out a three-year loan, the monthly payments will be very high. If you take out an extended-term loan lasting between six and nine years, the monthly payments become more affordable. However, by the time you pay off your loan, your car’s value will depreciate significantly. If you plan to keep your vehicle for a long time, depreciation may not be a problem. Over time, your needs may change since you made your purchase. You may want to trade it in for another car before you’ve finished paying off the loan, resulting in heavy additional costs. Let’s take a closer look.

It’s Financial Literacy Month! And while Financial Literacy Month in November is always important, this year’s theme of financial literacy in uncertain times really hits home.

If ever there was a time to get smarter about money, it’s now!

Let's kick off the discussion with how to budget for the vehicle you want to buy. Typically, the biggest expense when buying a car is the car itself, but what other expenses should you consider? There are gas and parking of course, but let's look at the additional costs, so you don’t get blindsided later on!

In our final Understanding Contract series, we’ll finish by reviewing two final sections.

Trade-In Description

This section should be filled out if you are trading in a vehicle. It will include your vehicle’s details (e.g. VIN, mileage), the amount the dealer is paying for your old vehicle, and information about any outstanding loan balances.

The Acceptance of Terms

This is the shortest section of a contract, but arguably, the most important. Both you and the dealer will sign here meaning you are legally agreeing to purchase the vehicle based on the contract’s terms.

 

The next section we’ll review is the Basic Vehicle and Options Section. Though short, this is where you will find Optional Extras such as trim packages or other upgrades that might include leather upholstery, heated seats or audio systems. Ensure when you read the contract all additional features you requested on your vehicle are listed.

In the Purchase Price and Payment section of a contract, you can expect to find itemized fees like freight and air conditioning (if you are purchasing a new vehicle), administration (if the dealer charges one) and the OMVIC fee. This is also where you should see your old vehicle's value if you are trading it in.  The terms below are meant to provide a general overview of car contract terminology – the corresponding prices are examples only.  Note: not all terms listed here may be on your contract. Contracts vary depending on whether you’re buying a used or new vehicle.

Vehicle purchase agreements or contracts can be confusing. To help you feel more confident, we will look at each contract section and explain the terms, so you can better understand the document you may agree to sign.

This week, we will focus on the Vehicle Description Section, typically found at the top of a car contract. In the graphic below, each term is numbered so it corresponds with the numbered definition below.

Some 38 per cent of used car-buyers and 46 per cent new-car consumers polled by Ontario’s Vehicle Sales Regulator (OMVIC) said they did not test drive the vehicle before purchase because they were unsure whether vehicle dealerships in the province would have necessary health and safety protocols in place. A salesperson was present in the vehicle for only 16 per cent of test drives.

In August, OMVIC asked the Automobile Protection Association (APA), an independent organization offering car-related resources for consumers, to survey consumers who purchased a vehicle during the pandemic. 

A car buyer contacted OMVIC’s Complaints and Inquiries team to ask about the OMVIC Fee. Can he opt out of the charge? 

Colin: "I bought a new car from an OMVIC-Registered Dealer last week. She charged me $10 for something called the OMVIC Fee. What is it? Could I have not paid it?" 

Recently a consumer named David wrote in to ask,  “I was planning to buy a used car, but my financing didn’t get approved, can I get my deposit back?"
There are two different financing situations that can affect whether or not David can get his money back.

A consumer contacted OMVIC's Complaints and Inquiries team to ask about all-in price advertising and dealer fees.

I recently purchased a used vehicle from an OMVIC-Registered Dealer and he charged me an administrative fee of $199. I questioned this and the dealer said it was a normal charge. I thought dealers couldn’t add fees. Doesn't this violate all-in-price advertising?

How has COVID-19 changed test drives? Is a deposit required?

This week, OMVIC’s Complaints and Enquiries team answer consumer questions about test drives.

Note: COVID-19 has changed test drives at many dealerships. If going to the dealership for a test drive makes you uncomfortable, research the alternatives.

COVID-19 has altered how many of us get from A to B. With fewer people taking public transit, more people are looking to buy cars, but the purchasing process has changed.

In early April, dealerships were closed due to the pandemic. In May they reopened, but with strict public health guidelines, which altered the car-buying experience not just for dealers, but also for consumers.

If you’ve bought a vehicle in the past five months, OMVIC and consumer watchdog group—the  Automobile Protection Association (APA) — wants  you to take a short survey about buying a car during the pandemic.

If you complete it, you could win a prize!

Thanks to technology, driver assistance has grown by leaps and bounds. It keeps us safe, helps us park, saves fuel and even lowers emissions. But what happens when smart technology backfires? Who do you call? Who can help?

The following question from a consumer illustrates what can go wrong when a car has a defect and the dealership can’t fix it and the consumer doesn’t know where to turn. 

Buying a vehicle, whether new or used, can be confusing—perhaps even intimidating. And while the thought of acquiring a new vehicle is exciting, the process can be stressful. So if potential car buyers feel unprepared,The OMVIC Academy will  ensure they become confident and informed.

OMVIC's Complaints and Inquiries team get a range of car-buying questions. Because they know consumer protection legislation inside and out, they can answer your queries or direct you to the correct department. 

Here are two questions the team received last week about the importance of getting what you want from a dealer in writing.

OMVIC makes information about dealers and salespeople who have been charged public in an effort to fulfill its mandate of consumer protection and industry professionalism.  We are sharing the Ontario Provincial Police's news release about an ongoing investigation of a former OMVIC registrant.

While data from Léger, Deloitte and Angus Reid shows 1 in 2 Canadians are worried making in-person purchases and nearly 1 in 3 unwilling to make a large purchase, Ontario’s Motor Vehicle Sales Regulator, OMVIC, wants consumers who are in the market for a vehicle to know that they can safely buy from registered dealers. These businesses have stringent health and safety protocols in place to protect staff and consumers.
Most of the province’s more than 8,000 registered dealerships are fully up and running, following workplace health guidelines mandated by the Ontario government. 

 Taking delivery of a new car is exciting and emotional, but as emotional as it is, you must do your best to stay grounded and take the necessary steps to make sure your purchase goes smoothly.

By law, anyone who trades in vehicles in Ontario must be registered with OMVIC, Ontario’s vehicle sales regulator—that’s every car dealer and salesperson.

We know that not everyone is going to buy a vehicle from an OMVIC-Registered dealer—some may choose to buy from a private seller—but buying from a registered dealer is ‘the safer way’ because of what you're legally entitled to.

If you’re looking to purchase a late model used vehicle, chances are you’ve checked out some of the online auto marketplaces such as Kijiji, AutoTRADER or others. While there are a lot of legitimate vehicles available through these sites, there are also online scams you should watch out for.

The best way to protect yourself against scams is to educate yourself, ask lots of questions, and learn to recognize red flags.

 

Did you know that in addition to cars, light trucks and RVs, OMVIC also regulates motorcycle sales?

If you’re considering hugging the curb and embracing clear blue skies this summer,  getting acquainted with your rights as a motorcycle-buyer is a very good start.

 

Few among us can buy a car with little preparation. For most, purchasing a vehicle is a sizable investment that demands significant research. Before deciding on which vehicle best suits your lifestyle and budget, you should know what your rights are.

OMVIC’s website is chock full of useful information to help you learn your rights, whether you plan on buying a vehicle from an OMVIC-Registered Dealer or a private seller. But why not get your feet wet first with a few questions from our interactive car-buying quiz? Test drive your car-buying smarts before you start perusing ads or visiting dealerships.

The plaintive cry of a loon. The echoing rumble of an approaching storm. The shrill mating call of a cicada. The exasperated (and annoying) whine of three backseaters wanting to know “are we there yet?” Ahh, the heartwarming sounds of a Canadian summer. As Canadians, we cram as much into our short summers as possible; and we love our summer toys. We ATV. We camp. We boat. And why? Cuz there’s no wifi ‘out there,' but the connection is unforgettable.

Now a skeptic might define camping as a vacation where you spend a fortune to live like a pauper; but true believers know, campers have s’more fun. But putting those wonderful graham cracker, toasted marshmallow, melting chocolate campfire delicacies aside, if truth be told, camping or boating can be expensive – very expensive.

 

Vehicles that would have been completely unaffordable two decades ago are now financially accessible. Many consumers can buy the car of their dreams, with no money down, for a monthly, bi-weekly (or even daily) payment that has somehow become “affordable.” But how? Did cars get cheaper? Are we all significantly wealthier? Or is something else at play?

 

Whether you choose to lease or purchase your next new vehicle, it’s crucial to make an informed and educated decision. Failing to do adequate research BEFORE your lease or purchase can have considerable financial implications. So if you’re considering leasing a new vehicle, ensure you understand how leasing works and decide if it’s right for you…

What is a Lease?

A lease is a long-term car rental since you’re only paying for part of the cost of the vehicle; you don’t actually own the vehicle unless you decide to pay the remaining amount at the end of the lease term. This remaining amount is called the “residual value.” Lease agreements are for a specific duration (typically 24-60 months) with a set monthly payment. Leasing is available for new and used cars.

 

Educating consumers on their car-buying rights is an integral part of OMVIC’s mandate. OMVIC believes that an informed consumer is a protected consumer. With our educational resources available online, consumers can improve their consumer confidence while staying safely at home.

 

Following the reopening of auto dealerships in the province, (by appointment only), Ontario’s Vehicle Sales Regulator, OMVIC has released a comprehensive COVID-19 Crisis Guidelines: Guidelines for Dealership Sales Operations to help motor vehicle dealers operate while protecting the health and well-being of their employees, customers and the public.

The framework for OMVIC’s guidelines came from the industry-specific recommendations created by the province, and its public health agencies.

 

Although there is much uncertainty in the marketplace these days, one thing remains the same: the more informed you are about your consumer rights, the better off you will be when the time comes to buy a car. 

As Ontario Vehicle Sales Regulator, OMVIC has a mandate to protect and educate consumers. We do this in several ways including offering free car-buying seminars to school or community groups in Ontario.

 

 

As Ontario's vehicle sales regulator, OMVIC provides consumer protection to Ontario’s car buyers and enhances industry professionalism among registrants. But let's dig a little deeper and find out the who, what, where, when and why of OMVIC.

Who is OMVIC?

OMVIC (Ontario Motor Vehicle Industry Council) is Ontario’s vehicle sales regulator. With a mandate to protect consumers, OMVIC’s office and field staff administers and enforces the Motor Vehicle Dealers Act and other consumer protection statutes on behalf of the Ministry of Government and Consumer Services.

 

As the current health crisis continues to evolve, some consumers have reached out to us with questions on navigating the changing marketplace. We’re featuring two questions related to COVID-19 on this week’s blog. 

I purchased a car on Friday from a relative and now I’m wondering how I would go about registering the car and paying taxes during the pandemic. 

Private sales still need to be completed through Service Ontario. They have a list of locations on their website indicating which ones are open. 
OMVIC has a lot of great resources including checklists, videos and tips for anyone interested in buying a car privately. Visit Tips for Buying Privately to learn more.

 

Pandemic or not, life happens.

Normally, when a consumer wants to buy a car, Ontario’s Vehicle Sales Regulator, OMVIC ‘s recommendation would be that they make an informed choice, whether that is buying privately or buying from a registered dealer. Should consumers opt to go the private sales route, they should know that they are forgoing the consumer protections available to them when they buy from a registered dealer.

But, on April 4, in response to preventing the spread of COVID-19, the Ontario government reduced the list of essential workplaces that can remain open. As a result, motor vehicle dealers’ showrooms across the province were ordered to close until further notice. Though many dealers in Ontario are able to sell vehicles online, not all dealers have the capability and resources at this time to do so.

 

COVID-19 has changed life for all of us, staying in is the new normal and much of our contact is virtual. For car-buyers, this means researching, and potentially completing the entire vehicle-purchase process,  online or remotely. Because this trend is growing in popularity, OMVIC has added resources to its website so that car-buyers can be informed and protected.

 4/14/2020

Message from John Carmichael, OMVIC CEO and Registrar

COVID-19 is an unprecedented crisis for our stakeholders– dealers, salespeople and consumers – and for Ontarians and the world. OMVIC is committed to the health and safety of its staff and its stakeholders. OMVIC will continue to operate from remote sites and work with its stakeholders in these challenging times. While some service levels have been impacted, OMVIC remains committed to maintaining a fair and informed marketplace by protecting the rights of consumers and ensuring fair, honest and open competition for registered motor vehicle dealers during these challenging times.

The impact of COVID-19 will require all of us to adapt and have flexibility with what lies ahead. I have no doubt that we will be successful in facing these challenges.

When Thaya Gengatharan, OMVIC’s Director of Registration, received a detailed questionnaire from the Women & Automotive Leadership Forum some weeks ago, she assumed it was some sort of feedback survey.

She filled it in and then forgot all about it.

It wasn’t until people dropped by her offices to congratulate her that Gengatharan realized she was one of the recipients the 2020 Women & Automotive Leadership Award.

Each year, Cherokee Media, publisher of the AutoRemarketing Canada magazine, selects and honours accomplished women who work in the Canadian automotive sector and are leaders.

 

An Oakville dealership and four of its staff were fined a total of $21,500 for breaching the Motor Vehicle Dealers Act (MVDA) Code of Ethics.
Oakville Chrysler Jeep Dodge Ram Ltd., Reg Nimeck, Gordon Nimeck, Andrew De Clavasio and Camillio Comparone were disciplined by OMVIC, Ontario’s vehicle sales regulator, for failing to comply with Ontario’s all-in price advertising regulation.

 

A Toronto General Motors (GM) dealership, Dean Myers Chevrolet Ltd., and 1125278 Ontario Limited, o/a Dealerwerx Leasing, both located at 3180 Dufferin St., North York, have currently closed their doors after the appointment of a receiver, Deloitte Restructuring Inc. (Deloitte), by the Ontario Superior Court of Justice. The application for appointing a receiver was made by the Royal Bank of Canada.

 

When it comes to buying a vehicle in Ontario, it is crucial consumers do their research before making a purchase. Whether buying from a private seller or an OMVIC-Registered Dealer, homework will help prepare consumers to buy a car.

 

 

From time to time, we feature a consumer question on the OMVIC blog, like this one, “If I sell a car by myself, or put it on Kijiji, does that make me a curbsider?

The simple answer is no—selling a car does not automatically make someone a curbsider. Anyone is entitled to sell his or her personal vehicle—that is, a vehicle that was purchased and owned for personal, family or household use. Curbsiders are in the business of selling cars. While they usually pose as private sellers, they buy cars, not for personal use, but to resell.

 

Red roses, chocolate hearts, intimate dinners—it’s the clichéd, yet still wonderfully sentimental view of Valentine’s Day. But not all lovers are so lucky; in fact Valentine’s Day break ups have become de rigueur, ranking just behind spring break splits and the period “two weeks before” Christmas. WikiHow even has an eight step guide on “How to Break up With Someone on Valentine’s Day.”

It happens; not all relationships are built to last. Our love wanes. We grow bored. New models tempt us with exciting features, better handling, firmer suspensions; it’s irresistible. Yes, there’s nothing quite like the stimulating, even obsessive, love affair…with a new car. But how do you “break up” with your old ride?

 

So, you think you've found a nice used car. No accidents, good price…and only 131,000 kms. Roxy (not her real name) thought so too. Which is why in early 2019 she contacted the private seller and paid him $5,400 for the car. 

Unfortunately, the seller turned out to be a curbsider, an illegal, unlicensed dealer posing as a private seller, and the car—well, apparently it had discovered the fountain of youth, because it actually had more than 230,000 kms on it. 

Curbsiders often sell vehicles that are undisclosed rebuilt wrecks or odometer-tampered,” said John Carmichael, CEO and interim Registrar of OMVIC, Ontario’s vehicle sales regulator.  "And we have recently seen a significant uptick in the number of vehicles with rolled-back odometers sold by curbsiders.

 

Consumers with car-buying or OMVIC related questions are encouraged to reach out to OMVIC’s Complaints and Inquiries team via email (consumers@omvic.on.ca) or phone 1-800-943-6002 ext.3942. However, consumers don’t have to wait until they buy a car to get in touch. In fact, sometimes the questions aren’t even about buying a car, like this one last week: 
“Would I be allowed to take the OMVIC Certification Course only for general education purposes?”

 

Falsifying documents and failing to disclose significant accident histories of vehicles sold has resulted in a Newmarket car dealer having his licence suspended for 120 days. 

Ontario’s Vehicle Sales Regulator, OMVIC, issued a Proposal to Revoke the registration of Premium Cars Wholesale Ltd., 17065 Yonge St., Newmarket, after receiving serious complaints from numerous consumers and one dealer. Premium appealed the proposal to the Licence Appeal Tribunal, LAT, which, after a ten-day hearing, ordered the suspension.

 

Everybody has their own list of concerns when it comes to buying a car. These concerns can be as specific as whether the car colour comes in a matte or, if you’re buying used, how many owners the vehicle has had. OMVIC suggests you start a conversation with the dealer to determine whether the vehicle you’re interested in will be a worthy investment.

 

OMVIC received this question from Cathy, a consumer, who purchased a used vehicle from an OMVIC-registered dealer.

"I bought a used car. Had the car for one day and noticed the coolant was low, only to find out the coolant was leaking into the motor. What right do I have as a consumer?" Cathy.

 

Let’s cast one final look back at 2019 before it disappears from the rearview mirror forever!

As we head boldly into an exciting new decade, remember that when it comes to buying a car in Ontario, OMVIC’s commitment to your consumer protection and education remains as steadfast as ever.

 

Thinking about decking the driveway with a new set of wheels this holiday season? Before you go dashing all the way to the dealership or checking out the nice and naughty list in the online car classifieds, find out if you’re a Dasher or a Blitzen! Take OMVIC’s ‘smart’ car buyer quiz to find out.

 

Ah December, the holidays are here and a new year looms.

There’s a spirited hustle and bustle unmatched by any other season…. but then comes the rest of the interminably long, dark, soul-sapping winter. We graupel (that’s a pun, not a typo btw) with blizzards, white-outs, treacherous driving, Vitamin D deficiency; and, the excitement that led up to the holidays is replaced by a pining for spring…. a spring that seems an eternity away. Our coping skills are put to a frosty test.