Car Buying Guide

Svitlana Mazepa
Branch Manager Etobicoke Branch

When it comes to major expenditures, buying a car ranks as the second most important decision you have to make after purchasing a house. First, you have to decide what car you would like to buy. There are many things to consider such as make, model, colour, performance, price, reliability, repair cost but most importantly, decide on the price. This will save you a lot of time since you can then focus on the cars you know you can afford.

Buying a new car

If you decide to buy a brand new car you can think about negotiating the price. Because of the high profit margins, there is some negotiating room on new cars. If you are a good negotiator and are willing to spend an entire day at the dealership, you can potentially negotiate $1-2K off the price (or perhaps $3k on a 30-40K car).

The best time to buy a new car is either right when the new model comes out (around October) or at the end of the year when most dealerships begin to offer discounts for last year’s models. It’s not just the end of the year that brings discounts. Salespeople are most likely to give you a discount at the end of the day (they want to go home, not argue with you over the price) or at the end of the month or sales quarter as they are trying to reach a target to earn their bonus. They are likely to be more flexible at those times since the bonus might very well be bigger than the discount they are giving you.

Another way that you can get yourself a better discount it to apply for and get a car loan from a financial institution before you go in to negotiate with the car dealership. It sounds counter-intuitive, especially when dealers sometimes offer to finance your purchase at 0%. So how can a loan at 4 or 5% from a financial institution be better? Think of it this way, if you are able to negotiate an extra $1,000 or $2,000 from the price of the car by arranging your own financing (rather than through the dealer) then you can make up the difference in interest charges and perhaps even come out ahead.

Buying an used car

On the other hand, you can still enjoy the new-car smell and save 20-30% off the price of new car if you buy a slightly-used 6-month to 1-year-old car. Typically, the older the car the bigger the discount, but my recommendation if you are buying a used car, is to buy a car that is still under the manufacturer’s warranty at least for another 20,000 km. If you are buying a car more than 3-4 year old, you might find that along with the huge discount in price, you might be inheriting somebody else’s problems too. Make sure to arrange an inspection by an unbiased mechanic to make sure you are not buying a lemon.

Once you’ve decided on the price figure out make, model, and features by doing research on line. Autotrader, kijiji and e-bay are just some of the on-line resources to help you with your search. The next step is to visit a dealership to see what kind of deal you can get at your local dealer and to take a TEST DRIVE. Get a feel for the car, if you fall in love with it then you are ready to look around for one to buy. Be ready to spend some time looking for the best deal. If you are lucky it will take a few days, but it might also take a couple of months if you want to get the best deal.

In my opinion, the best way to search is to create an alert on Autotrader.ca and you will get an e-mail whenever a car matching your criterion is listed. Mind you not every car is listed on autotrader so it would be beneficial to visit other dealerships.

The benefit of scouting for the car yourself obviously is the PRICE. Once you see that the car is listed for less than any other car it is time to act. There are several reasons the car legitimately could be listed for less: off lease return; trade in; various family situations; re-built. 

It is time to contact the seller and try to negotiate. Since a used car’s price is already low they may not want to budge. They will probably tell you they have other offers. Most likely they are telling you the truth as other people are also looking for the good deals, but don’t let that spook you into making a bad deal. Once you’re happy with the car and the price make a $100-300 deposit to reserve the car.  

If you are buying through a dealer they will look after the paperwork themselves. If you are buying privately you need to do some homework. First you will need to obtain the VIN number from the owner. You will need it to get insurance, and to obtain a carproof report www.carproof.com/ and a used vehicle information package www.ontario.ca/driving-and-roads/used-vehicle-information-package. For around $50 you will get information regarding the title of the vehicle, liens, services done on the vehicle, vehicle damage report, bill of sale portion, odometer readings, etc.

Finally, everything checks out fine. If the vehicle you are looking to buy is still under the warranty you don’t really need a mechanic to check the car out. Now it is time to go to the bank and get a draft for the amount you’ve negotiated. You do not have to pay taxes on the spot if you are buying privately.

Once you have the bill of sale signed by the seller you need to get a safety certificate from a certified mechanic. You don’t need an emission test if the car is younger than 3 years old. The last step is to get an ownership and the license plate at the local service Ontario centre (be prepared to pay 13% HST, license plate fee and sticker fee) arrange the insurance and HAPPY DRIVING.

Lenders at Ukrainian Credit Union Limited are always happy to look into your situation and assist you with any of your financial needs. Visit our website to find the branch nearest to you, or if you live in the GTA, call me and I will be more than happy to help you out.

Svitlana Mazepa
Branch Manager Etobicoke Branch
Ukrainian Credit Union Limited
225 The East Mall, Toronto, ON M9B 6J1

Tel:  416-233-1254 ext. 225

smazepa@ukrainiancu.com