Here are some tips to help with cars / automobiles / vehicles.
Registering a Car in Ontario
Before looking at buying, selling, leasing, car insurance, etc, here is a high level overview of what is typically involved with registering a car in Ontario:
- General Ontario Automobile Licensing information is available here: http://www.mto.gov.on.ca/english/dandv/vehicle/index.html
- A list of Licensing/Registration offices is located here: http://www.mto.gov.on.ca/english/dandv/officeloc.shtml
What is required
- Ontario Driver's License - Steps for getting an Ontario Driver's License are here: http://www.mto.gov.on.ca/english/dandv/driver/drvlicen.htm . A list of driver examination centres where you can get your driver's license is located here: http://www.drivetest.ca/en/loc/dec.aspx . You are required to provide documentation stating your legal name, date of birth and signature. Valid documentation is listed here: http://www.drivetest.ca/en/license/HowToApply.aspx .
- Original copy of the vehicle registration permit.
- Bill of Sale (if transferring ownership). The bill of sale must contain the Model, Make, Year & VIN and must be signed by the previous owner. If it is registered to one of your parents, then they simply state it is a gift of $0. Don't forget your chequebook to pay the HST or RST (13%) that is due.
- Drive Clean Vehicle Emissions Pass Report. May be required depending on the year of the vehicle and where you live. Report is valid for 1 year. I recommend taking your vehicle somewhere that only does testing, and not repairs. Repair shops might recommend fixes that aren't needed. In Ottawa, test-only places include Oil Changers and Pennzoil 10 Minute Oil Change. More information can be found on the Drive Clean website or the Ontario Ministry of the Environment website.
- Mechanical Safety Standards Certificate. This is required if transferring ownership or registering the vehicle in the province for the first time. If you are buying from a dealership, they will often take care of this for you. This certificate is only valid for 36 days. This generally costs $60-120.
- Car Insurance. You need to find Ontario car insurance coverage and provide the insurance company's name & policy number. You have to set up your Ontario car insurance to commence the same day that you register/license your car in Ontario.
- Odometer reading from your vehicle.
- Completed Application for Registration. Available only at the Driver and Vehicle Licence Issuing Offices. This can be done last, the day you go in to register your vehicle
Have you heard of car sharing? If you only need a car once in awhile and live somewhere that's convenient, maybe consider car sharing. If you live in Ottawa, then check out VRTUCAR.
Buying a New Car
- Negotiate. Never take the initial price the dealership is offering. Always ask for a better price.
- Try to negotiate a lower interest rate - fixing up your credit report first will help.
- It’s often recommended that you negotiate the final selling price of the car instead of monthly payments.
- Ask the sales person for the bottom line number that includes all taxes, freight, mandatory extras and miscellaneous environmental taxes and sales taxes. Dealers are often reluctant to provide this information, but will if you push. The amounts can vary by dealership, and can add unexpected costs.
- Try to negotiate in floor mats (great for the winter) and/or winter tires, or any other extras you might want.
- For a fee, unhaggle.com will do all the negotiating for you.
- For a fee, Car Cost Canada, will provide you with the wholesale invoice price for vehicles. This allows you to know how much a dealership is paying for its vehicles and gives you a better idea of negotiation room. In addition, sometimes requesting the report will lead to wholesalers contacting you with a deal at a more reasonable price than you can find at a local dealership.
- Keep in mind that a new car loses 10-15% of its value after it’s driven off the lot. “Most personal finance writers will tell you that buying a two year old car with low mileage is the best way to go. However, two year old, low mileage, accident free vehicles are hard to find at a good price.”
- Useful Edmunds article: http://www.edmunds.com/car-buying/10-steps-to-buying-a-new-car-pg12.html You can read more details on each step by clicking the “Previous” link. Keep in mind that it’s a US-based article though.
- Useful Million Dollar Journey article: http://www.milliondollarjourney.com/confessions-of-a-car-salesman.htm
Leasing a Car
Leasing a car is generally more expensive in the long run than buying. However, there are a few key advantages.
- If you will be using your vehicle for business purposes, then lease payments can be claimed as a business expense, whereas loan payments cannot.
- Assuming you trade in your lease at the end of each term for a new lease, then you won't have to deal with the long-term repairs that car owners will. And if your time is very valuable, then leasing may be cheaper from the low-maintenance perspective.
Taking over a Lease
A convenient way to try out a car without committing to buy it right away, is to take over someone's lease. It's ideal to find a low mileage vehicle, with less than a year remaining in payments, with the plan to buy out the vehicle at the end of its lease period. Some people will even add cash, and/or offer to pay the $500-1000 in lease transfer fees. Places to look for lease takeovers include http://www.kijiji.ca , http://www.leasebusters.com and even Facebook Marketplace.
Buying a Used Car (in Ontario)
- See the Ontario Ministry of Transportation website for lots of useful information: http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml
- If you're buying a used car in Ontario, make sure you request a used Vehicle Information Package (UVIP) from the seller. Sellers are required to buy the UVIP and provide it to all prospective buyers. More info on UVIP is here: http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml . These are often provided by https://www.carproof.com
- When you transfer ownership at the time of registration, you will be required to pay HST to a dealership or RST (13%) on a private sale. The tax will be applied to the higher value of the Canadian Red Book wholesale value or the purchase price. There are some situations that can be tax-free.
- Don't forget that the car may need a Mechanical Safety Standards Certificate (valid for 36 days) and Emissions Test, depending on the vehicle and your location. In addition, it's always a good idea to have a mechanic you trust take a look at the vehicle. Even better would be to the seller agree to have your mechanic perform the mechanical safety.
Car Value in Canada
You can estimate the value of your car in Canada by:
- Canadian Black Book - determines values according to the major dealer auctions across the country. They take into account kilometers, appearance, and mechanical condition.
- VMR - type of car, year, and kilometers
- Canadian Red Book - Based on sales in Toronto
Buying right after a move
If you're moving to a new location, and will need a vehicle right away, there are a few roadblocks you should keep in mind. It might be easier to buy a vehicle before moving or give yourself enough time to get settled in your new location first...
- Depending on where you move, you may need proof that you live there in that area. This can take some time, especially if you're doing an unofficial sublet and don't have an established mailing address right away.
- Getting a loan may require proof of employment and earnings. If you're changing jobs, it might take your new employer a few weeks to get you properly on the payroll and be able to provide such a letter.
- In Ontario, you need an Ontario's drivers license, and getting one requires proper documentation that you live in the area, which can make lining up all the ducks a bit tricky.
Moving to Ontario from another province
If you already own a vehicle and are moving from another province to Ontario, then here are some helpful tips.
- The specific steps for 'Licensing a Vehicle that is Registered in Another Jurisdiction' are located here: http://www.mto.gov.on.ca/english/dandv/vehicle/rgoutcan.htm
- To exchange an out-of-province driver's license , then go here for instructions: http://www.drivetest.ca/en/license/ExchangeOutProv.aspx .
- If your car was rebuilt in your province, then it is more tricky & expensive to transfer your car because it will be "branded" as salvage material and "unfit" to drive. You will need a structural safety (costs ~$400) and documentation from your home province. Contact the Driver and Vehicle Licence Issuing Offices for more information.
There are many companies that offer car insurance. If you haven't had any accidents, then it's pretty easy to get online quotes. Prices can vary greatly. I've had almost a dozen vehicles over the years, and I've found the quotes can differ by up to $1000/year. Each company uses different scoring methods to come up with your quote, so it may pay off to shop around. Some companies to consider:
- Bel Air (Top 3)
- CAA Ontario
- The Co-operators
- Johnson (Top 3)
- State Farm
- TD Meloche Monnex. (Top 3) Note: They offer nice discounts for university graduates from Canadian universities. To access the discount, you'll likely have to visit the alumni benefits page / office of your university.
- Your employer may offer discount rates, for example, the Public Service Alliance of Canada (PSAC) offers car insurance here: http://www.psac-groupinsurance.com
There are also car insurance brokers who will shop around for you to find the best car insurance rate. I've heard mixed stories as to the benefits of car insurance brokers, but if you aren't interested in putting in the effort to get quotes yourself, 2 recommended Ottawa brokers are:
- John Shea Insurance Brokerage. (Ottawa)
- Baxter Bennet & Publow, 613.739.1809. (Ottawa)
- Most new cars include roadside assistance for the first few years for free.
- Some car insurance companies also include roadside assistance, however, you are responsible for finding the support and covering the costs up front.
- If you aren't covered by roadside assistance, a nice comparison of Roadside Assistance options is located on the Million Dollar Journey site here: http://www.milliondollarjourney.com/roadside-assistance-comparison.htm
- Also, Rogers provides roadside assistance for $5 per month, but you have to have cell service to use it (it’s linked to your phone). All you have to do is dial #AUTO. (#2886)