Cars: In the Driver’s Seat

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“Caveat Emptor” is Latin for “Let the buyer beware”. Never is that more relevant than when you are talking about buying, insuring and licensing a car.

In Canada, the auto industry is a complicated one. You can buy a new car, buy a used car, lease a car – or did you want a truck, SUV or motorcycle? Once you pay for the car or get a loan to pay for the car or lease the car, you need to insure the car, license the car, license yourself and look at roadside assistance…. all that and you haven’t moved an inch!

There is a wide selection of cars to choose from. In Canada, car dealers are the same as everywhere else in the world… be careful and do your homework before you start shopping!
Before you select the manufacturer, make, model or year of the vehicle that you prefer, take into consideration the cost of insurance. There can be HUGE differences (thousands of dollars per year) depending on where you live, the purpose of your vehicle (business or pleasure), your driving record, the kind and colour of vehicle you drive and the insurance benefits you choose.

A new vehicle is very likely the second largest purchase, next to a home, that you will ever make. It’s important that you take your time and make sure you’re purchasing the right car for you.

Step 1: Determine what kind of vehicle you need. Do you need a mini-van or sports car? Do you have a large family or small? Do you need a pickup truck to haul things for your job or just a sedan to drive? It’s all about your taste and what you want.

Step 2: How much can you afford to spend? Will you be buying the vehicle with cash, financing or leasing? There are many funding options available and there is help for newcomers to finance vehicle purchases. For example, Scotiabank has the StartRight resources for newcomers and RBC has banking services available in 14 different languages.
If you pay cash you may be eligible for dealer and manufacturer rebates on new cars. If you take a loan from the car company you may be eligible for low interest rates as an incentive. If you lease, you will have lower monthly payments but will also have restrictions on how much you can drive the car each year. There are many options to consider.

Step 3: Once you’ve set your budget and chosen a few cars, it’s time to look at them in person. Plan a day to check out vehicles, going to several places and looking at your options up close.

Step 4: Get in the driver’s seat – literally! Take the car for a test drive. Dealers will allow you to take the car for a ride, to see how it handles and if you are comfortable. Afterwards, take the time to ask questions and find out about the vehicle including gas efficiency and safety records.

Step 5: Making an offer to purchase a vehicle can be an intimidating process. Just because the cost of the car is on the window, that may not be the price you will be asked to pay. If you’re nervous about negotiating be sure to stick to your budget, perhaps take along a friend for support and know that you can always walk away from a deal before anything is signed.
If you decide to purchase a used car you can start your search on the Internet. There are many options and it’s not difficult to find cars (with reasonable expectations) to fit both your needs and your budget.

Many places sell used cars: new car dealerships sell trade-ins, used car dealers sell many makes and models of cars and individuals may also sell cars directly. However you decide to purchase your used car, the Ministry of Transportation, www.mto.gov.on.ca has an entire section devoted to recommendations and rules for this (enter “buying a used car” in the search window). Read up BEFORE you sign a contract to purchase because it is very difficult to exit a deal once it has been signed.

As a newcomer, insurance companies don’t have a record of your driving history. In their eyes you are the same as any brand new driver.

Ontario has “No Fault” Auto Insurance. This means that when an accident occurs, it does matter who caused the accident. Confused? No-fault insurance doesn’t mean the company lets you off the hook if you cause an accident. If you are found to be at fault, it will go on your record and you will have to pay in future premiums.

No-fault insurance really means that if you are injured or your car is damaged in an accident, you deal with your own insurance company, regardless of who is at fault. You don’t have to go after the at-fault driver for vehicle damage reports and for the health care and income replacement benefits to which you are entitled.

When shopping for insurance you can do one of several things:

  • Find a licensed insurance broker. They may be able to put together your home, auto and even life insurance policies to get better rates
  • Search on line – many companies provide on line quotes
  • Work with who you know – your bank or credit card company likely offers insurance to their customers.

To get driving you will have to localize your license because you can only use your out of country driver’s license for 3 months. Depending on your experience and the country where you obtained your license, you have to take different steps to get an Ontario license. The ministry of transportation website can provide you with all the details on what you need to do, based on your home country and driving experience. Ontario also has a graduated license system and again, based on your experience, you may be starting at ground zero and treated like a brand new driver.

Patience throughout the process of car ownership is the key to success. Once you’re behind the wheel, hands at 10 and 2, it’s an easy ride on open roads!

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