Buying a car in Ontario involves more than just choosing a vehicle. From understanding provincial regulations to navigating financing options, this guide covers everything Ontario residents need to know to make an informed purchase in 2024.
Step 1: Determine Your Budget
Before shopping, calculate what you can realistically afford. Financial experts recommend keeping your total vehicle expenses (payment, insurance, gas, maintenance) under 20% of your gross monthly income. Factor in Ontario's higher insurance costs when budgeting.
Step 2: Check Your Credit Score
Your credit score affects your financing options and interest rates. In Ontario, you can get a free credit report from Equifax or TransUnion annually. Review it for errors and address any issues before applying for financing.
Step 3: Get Pre-Approved for Financing
Secure pre-approval from banks, credit unions, or specialized lenders before visiting dealerships. This gives you negotiating power and prevents dealers from marking up interest rates. Pre-approval typically lasts 30-90 days.
Step 4: Research Vehicles
Consider your needs: commuting distance, family size, cargo requirements, and Ontario weather conditions. Research reliability ratings, fuel economy, insurance costs, and resale values. Popular choices in Ontario include SUVs for winter driving and fuel-efficient sedans for city commuting.
Step 5: Test Drive and Inspect
Always test drive vehicles in various conditions. For used cars, get a professional inspection and request a CARFAX or CarProof report. In Ontario, dealers must provide a Used Vehicle Information Package (UVIP) showing liens, previous owners, and accident history.
Step 6: Negotiate the Price
Research fair market values using Canadian Black Book or VMR Canada. Negotiate the purchase price separately from financing and trade-ins. Ontario has no provincial sales tax on used vehicles sold privately, only on dealer sales (13% HST).
Step 7: Review Financing Terms
Compare your pre-approved rate with dealer financing. Read all documents carefully, understanding the interest rate, term length, total cost, and any fees. Ontario law requires clear disclosure of all financing terms.
Step 8: Complete Registration
In Ontario, you must register your vehicle within six days of purchase. You'll need proof of insurance, the vehicle permit, and payment for registration fees. Visit a ServiceOntario location to complete registration and receive your license plates.