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Buying a Car in Canada

Buying a Car in Canada

If you've recently arrived in Canada or soon to start your canadian adventure one of the pressing issues on your mind is probably transportation. "How different are the cars?" What do I need to know when buying a new car?" Read BritishExpats member "g_is_for_canada's" unofficial guide to the ins and outs of car buying in Canada.

1. Cars are a bit cheaper in general to purchase new, but used cars are quite expensive, and have tax added to them at the same rate as new cars, even if bought privately. Buying through a main dealer gives little assurance, as not all will be trade ins. They probably go to auction and buy any old rubbish they can sell. That's also why many used cars have no provided warranty.

2. Gas/Petrol is about half the British price, although fuel economy is lower. Cars tend to have larger engines even though their performance isn't noticeably better.

3. Insurance is 5x – 10x more money, especially as the maximum no claims discount is 40% in BC, not 65% like in Britain

4. There's no MoT equivalent, and you consequently get real piles of rubbish being driven about.

5. Salesmen are absolute nightmares. They just don't get it that you want to browse, and the nano second you look twice at a car they won't stop until you've bought it. I'm not one that easily bullied by salesmen, but my experience in Canada is really uncomfortable.

6. You're probably unaware of a majority of cars from which you'll get to choose.  You really need time to get familiar with the brands, but also you need to know what car will suit the life you may not have started living, particularly if you just recently arrived.

7. Negotiate on the price aggressively if you do find one you like. Get a mechanical report done by a main dealer if you can, unless buying from a main dealer. They'll always say to you "if you want cheaper cars, we have cheaper cars" but that's part of the psychology behind car sales. You can come back and play exactly the same game, "I'm only interested in this vehicle, and the maximum I can go to is $xxxxx including any taxes and charges." You don't have to be offensive to them, but just put a fact to them in black and white. By putting an offer to them you're giving them an option to make some commission.

For example you might add "Look, I realise that someone may pay the full price, but I'd like to put an offer to you and if you decide to accept it you can call me on this number." Now they WILL try every trick in the book like "That's below what we paid for it." But keep in mind that, whether or not this is true, (almost certainly NOT), that this isn't the issue. It's a trick to force you to up your offer on the assumption that nobody sells something for less than they paid. Stay focused on the issue which is that this is how much you are offering and the car remains unsold.

You can walk away although they probably won't let you leave without agreeing to it, but this gives you an excuse to leave without a bad feeling and you've left them something they didn't have when you arrived, which is an offer. Obviously don't do this unless you're prepared to honour the offer, or without making it clearly subject to certain conditions.

By the way, the other trick they'll want to try is to get you to put a deposit down for a vehicle that you're interested in. Again this is psychological. They'll probably say it's fully refundable if you change your mind, but you have to ask yourself what's the benefit to them of receiving a deposit ? They know that psychologically, when you put any commitment into something, it's makes it difficult for YOU to change your mind.

Just don't sign anything unless it's clear what you're signing. Please don't get fooled into anything. Try to recognise the tricks and turn them around to your favour. Be very suspicious and absolutely be prepared to walk away if you feel uncomfortable. I only put a deposit down to hold the vehicle while a main dealer was checking it out, and then it was something I would have been prepared to risk losing, (like $250), not the $5,000 they originally wanted.

Saying all this, I'm not trying to get at car salesmen as I know they're trying to make a living like anyone else. I actually have great respect for their techniques, particularly the way they play on psychology without perhaps having any theoretical training in this area. But when you purchase a car it's probably the first or second largest expense you'll face with lots of risk if it isn't right. To a salesmen you're probably one of 10-50 people he might speak to on that day alone.  You have to be prepared and keep control of the situation as he won't be looking out for you unless he's a buddy or family, (unlikely).

Now, regarding the temporary solution I promised. Here's what I did….

After the initial frustration with looking for cars, I decided to take time to learn about the models so that when I bought one it would be the right one. This took me 6 months, but only about a month after I really started to feel established in Canada.

To start your research ask people about their cars and the brands they recommend. Also consider a subscription to consumerreports.org (a bit like Which?). They provide details on vehicles and other product brands, but also consumer satisfaction reports from real owners. This is the most important thing, as many cars I was really attracted to would probably have left me regretting them, when reading real customer satisfaction ratings. Just because there's a lot of a particular vehicle on the road doesn't mean that they're any good.

Originally I'd got a rental car at weekends from Avis which had offices near where I was living. The weekend rates $30-40 per day were reasonable. You also have to pay for Collision Damage Waiver at about $20-25 per day, but if you have a Canadian gold credit card this is normally provided free as one of the benefits of the card.

As time went on I found the best deal of all was at Enterprise car rental, and I see the deal is still on. Basically they do a special 3 day weekend rate that works out at about $20 per day, unlimited miles. Only penalty is that you have to bring car back with same level of fuel which takes some planning but I never overfilled, and did take some liberties with this. I totally recommend the Enterprise car rental place in North Vancouver for Vancouver residents, even if you don't live there. You can get the sea bus from town, and then hop on a bus that drops you off almost opposite their branch. The downtown branches don't have this offer, so it's worth the trip.

As you only have the vehicle a few days of the week, you have to plan how you're going to use it. We used to go out for the day and then have a meal out, and the do our shopping at night.

One of the other benefits of renting a car is that you will get to not only practice your driving, but also you get experience with a number of major brands. There's absolutely nothing like having a car for a weekend to really put it to the test, especially if you're doing your food shopping with it. I really got to love the new model Pontiacs, particularly the names; Grand Am, Grand Prix, G6… Ironically I didn't end up with one as my main car, but I'm certainly considering one as a second vehicle. You also get to see how economical each vehicle is.

{mosbanner right}Someone at my previous workplace thought I was crazy doing this. His reasoning  was that the $300 or so per month I was paying for a rental car, would be the monthly payment on a vehicle which is mine to keep. While this is true, it's ignoring certain facts which more accurately contribute to the true cost of ownership. These include:

  1. Depreciation
  2. Maintenance
  3. Cleaning
  4. Storage
  5. Insurance
  6. Fluids such as transmission fluid and oil
  7. Breakdown cover

When considering all these costs, then taking the kilometres that you do, you can get a cost per km. This is alarming normally. The rental car option is certainly worth considering and overall I believe it's far cheaper than owning, as well as being more appropriate during your settling period.

Another option I know little about, is cooperative car ownership schemes which are available in Vancouver area. You have to work out if these are viable in favour of car rental (which in my case they were not).

This was taken from a recent discussion in our Canada Forum . There are more comments and discussions about this topic in this thread . Why not read more in our forum or better still join our community and contribute to this or other subjects yourself.