A car ad has caught your eye and you are planning to go to the dealer to see more. Before stepping on the gas on this purchase, take the time to consider a few points.
Start by making a list of your needs so that you can choose something that you like that is within your budget. As you review your options, whether you’re getting a new, used or leased vehicle, think about your annual mileage, depreciation costs, the resale value and how often you are likely to change your vehicle.
To avoid getting into debt, review your budget and determine how much you can spend on payments for a car purchase or lease. Don’t forget to include all other costs, such as insurance, registration, driver’s licence renewal, parking, winter tires, gas and maintenance. The Financial Consumer Agency of Canada’s (FCAC) free online Budget Calculator can make this task easier. Industry Canada’s website provides information and advice for consumers who are about to purchase a vehicle.
Whether you are borrowing to purchase or leasing a vehicle, take the time to shop around at a number of financial institutions and dealerships to compare interest rates, payments and administrative or contract cancellation costs. Any money you have saved for your purchase will shorten your amortization period and reduce your interest costs.
Lastly, before signing a contract, make sure that you read it carefully and ask questions in order to clearly understand its contents. FCAC’s tip sheet, “Before you sign any contract: 10 things you need to know,” has other suggestions. This tip sheet and the Budget Calculator can be found on the Agency’s Web site at Itpaystoknow.gc.ca.
Julie Hauser; Media Relations Officer, Financial Consumer Agency of Canada