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OMVIC Blog: Car Buying Tips

Questions to Ask Before Buying a New Car from a Registered Dealer

Jul 26

Thursday, July 26, 2018  RssIcon

Questions to ask before buying a new car from a registered dealer

The new car you’ve seen at the dealership makes your heart pound; your pulse race and the thought of driving it makes you a little giddy. It must be love. You know what they say, first comes love, then comes…car ownership. However, before the dealer can pronounce you ‘car owner and car’, you need to take a step back and ask some serious questions.

Because, let’s face it, buying a new car is a lot like getting married: if you don’t do proper research and ask the right questions you can end up making an expensive mistake you’ll regret for years.

So, think of OMVIC as your marriage coach—here to help you start that discussion that will ensure the relationship between you and new your car is a happy and long lasting one.

Here are five key questions about the buying process to get you started:

What financing is available?

Most people spend a lot of time researching the vehicle they’re going to buy and very little on how they’re going to pay for it. Don’t let this happen to you—ask the dealer, and yourself, a lot of questions!

Consider whether you want to finance or lease. If you’re going to lease it, which is like a long-term rental, find out what the penalties are if you go over the mileage, or what happens if you want to end that lease early. Both can have expensive ramifications.

With financing, ask about the rates that the dealership has; compare them to rates from your bank. If the dealer is arranging financing, ask for a copy of the application.  Also ask how many lenders the dealer is submitting your credit applications to because, depending on how it is done, multiple credit applications could have a negative effect on your credit score.

If you are considering an extended term loan (5 to 8 years), decide if it will make sense for you.  If you’re a consumer who drives long distances—financing a new vehicle for 8 years probably doesn’t make much sense. Consider this: you financed your car over 8 years and you’re a commuter who drives 35-40,000kms per year; after just four years, the car could have up to 160 kms on it, it’s long out of warranty, and it’s not even half paid off. If the original loan was for $35,000, you probably still owe ~$18,000 but the car is only worth $8,000, thanks to depreciation and the high mileage.

 You have what we refer to as negative equity. Should you decide to trade that car in on another vehicle, a dealer is going to take that negative equity and roll it into the loan for your new car. And negative equity snowballs when consumers repeat this process over and over. So make sure you ask yourself if a long term car loan is right for you.

For more tips about financing, visit:

2. Will you include conditions on the Bill of Sale?

If you have conditions, you have to ask the dealer if they’re willing to include them on the contract; whether the conditions are “subject to finding acceptable insurance no greater than_________ per month” or “subject to spouse’s approval.” Of course, the dealer isn’t legally required to put these conditions on the Bill of Sale, but if they won’t, you may want to consider buying from a dealer who will.

3. I know this is a new car, but are there any outstanding recalls?

Recalls can be issued at any time and can affect new vehicles, so ask the dealer to check for outstanding recalls and if there are any issues, have them addressed before delivery.

4. Do you have the car in stock?

If the dealer doesn’t have the exact vehicle in stock, it may have to be ordered from the manufacturer or the dealer may have to try to locate the vehicle you want at another dealership and acquire it from them.  Why is this important? There can be delays that will affect delivery and sometimes, if a vehicle is located at another dealer, it could have additional options on it that you weren’t seeking, which would affect the price of the vehicle.

5. Are there any extra fees other than HST and licensing?

This question is a litmus test. While dealer fees (e.g. freight (new cars only, admin fees, etc.) are generally legal, they have to be included in any advertised price (note: they will be itemized separately on the contract). If an OMVIC-Registered Dealer tries to  add fees to the advertised price, other than for HST, licensing and options you have selected,  shop elsewhere and report the dealer to OMVIC (1-800-943-6002 ext.3942)

We understand that, like falling in love, buying a new car is an emotionally charged experience, but being informed and communicating (asking smart questions) will help you stay grounded, like the best marriages.

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