buying your first car
When buying your first car, whether it’s new or pre-owned, you’ll have a lot of decisions to make: what type of car will fit your budget, the type of car you want (SUV, truck, passenger car, etc.), and whether to lease or finance the purchase. We created a handy guide to cover all of these things in order to make the process easier for you.
BUYING A NEW VEHICLE
The process for buying a new vehicle in Ontario is pretty straight forward. The basic steps are the following:
- Set your budget: decide on how much money you want to spend.
- Research ideal vehicles within your budget: many vehicle brands have a ‘build and price’ section on their website.
- Compare and review models.
- Test drive the vehicle you have selected: make sure it fits your lifestyle and expectations for storage, leg room etc.
- Look at your options for leasing or financing.
- Look into your insurance needs; some models may have higher premiums based on your age.
- Finalize the purchase and paperwork.
- Register the ownership.
BUYING A USED VEHICLE
Buying a used car works almost the exact same as buying a new car. There are some differences, mostly to do with the different sources of used vehicles and the nature of pricing, payment, and condition. These are itemized below:
- Payment Options — You can finance used vehicles depending on the age of the vehicle.
- Pricing — Prices are set by the seller and the market.
- Condition — You have to consider the condition and history of the vehicle (was it in an accident); you should be able to request the CarProof (history on the vehicle.
- Sources of Inventory — You can buy from private sellers, used car lots and dealerships.
- Documents — There are unique documents relevant to purchasing and registering ownership of a used vehicle.
Fun Fact! Buying a Certified Pre-Owned vehicle is a great way to get a car only a few years old, still close to brand new, sometimes still under warranty: it comes with a fully documented service history and is much more economical since new cars depreciate in the first few years of ownership.
USED VEHICLE INFORMATION PACKAGE
One of the most important documents involved in the used car buying process is the Used Vehicle Information Package (UVIP). It contains all the important details and information about the vehicle’s history, including:
- Basic Vehicle Information — The year, make, model, colour, body type, etc.
- Registration History — A list of how many owners have been registered to this vehicle and the vehicle’s available history.
- Application of Transfer — The seller and buyer must both sign to transfer ownership.
- Bills of Sale — Section that the seller must fill out to establish the date of purchase and selling price.
- Lien Information — If there is still an existing loan remaining on the vehicle that the buyer might inherit on purchase.
If you are buying a used vehicle make absolutely sure that the seller has and shows you the UVIP to look through before you even think of finalizing the purchase because it is against the law if they don’t.
HOW TO BUY A VEHICLE AS A FIRST TIME BUYER
There are a few things you will encounter in the process that you might not know about.
- Credit History — A good credit score / credit history is the first major component in purchasing or leasing your first vehicle. If you have limited credit / no credit history the purchase or lease process may become more difficult. Do not fret though, some dealerships offer a 1st time buyer / recent graduate program that can assist you with your first purchase / lease. In some cases a co-signor (parent) may be required.
- Insurance — Is a must on any new / used vehicle purchase or lease. Proof of a valid insurance policy will need to be provided when you pickup your new vehicle.
- Driver’s Licence — A valid G2 or G licence is a must when your are purchasing or leasing a vehicle. You cannot purchase a vehicle with a licence from another country or with an international driver’s licence.