This month we discussed what you need to know whether you buy privately or from an OMVIC-Registered dealer. Whichever way you choose to purchase a vehicle, educate yourself and learn about your rights—and risks—involved.

In our December 11^th blog post, we highlighted the protections that come with buying from a registered dealer. We created an infographic for this week’s post to remind you of those rights if you buy from an OMVIC-Registered dealer.

In our December 4^th blog post, we discussed the pros and cons of buying a car privately. Because you don’t get the same protections as buying from an OMVIC-Registered dealer, you should be vigilant.

For this week’s post, we created an infographic reminding you about what to know if you buy from a private seller.

For our final blog post of 2020, we’ll present you with another infographic to remind you of the benefits you get if you decide to buy a car from an OMVIC-Registered dealer.

Last week we discussed how to buy a car privately. This week we explain what you should know if you decide to buy from an OMVIC-Registered dealer.

Who are OMVIC-Registered dealers?

If someone wants to be a dealer or a salesperson in Ontario, they must register with OMVIC. It is the law.

To be eligible for OMVIC registration, dealers and salespeople must undergo background checks. They must pass an automotive law and ethics course covering the Motor Vehicle Dealers Act and the Consumer Protection Act. Georgian College offers courses to help prospective dealers get their license.

Does that mean every Ontario business trading in vehicles is registered with OMVIC?

No. It pays to check.

You have many decisions when purchasing a vehicle, but the first will undoubtedly be whether to buy from a private seller or a registered dealer. How will you know what is best for you?

For this first week of December, we'll review what you need to know before buying a car privately; next week we'll discuss the buying process from an OMVIC Registered dealer. In our final December installment, we'll compare both so you can make an informed decision about which one is best for you.

So, let's start with private sellers.

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.