Auto
A
car is one of the most expensive purchases many consumers make.
According to Alex Law of 123.com,
the average price of a new car sold in Canada for 2007 is $32,210.
It’s very important to know how to make a smart purchase.
What To Do Before You Buy Or Lease
• Check publications at a library, bookstore or on the Internet
that discuss new car features and prices. These may provide
information on the dealer’s costs for specific models and options.
• Shop around to get the best possible price by comparing models and prices in
ads and at dealer showrooms. You also may want to contact car-buying
services and broker-buying services.
• Plan to negotiate on price. Dealers may be willing to bargain
on their profit margin, often between 10 and 20 percent. Because the price
is a factor in the dealer’s calculations regardless of whether you pay cash
or finance your car — and also affects your monthly payments — negotiating
the price can save you money.
• Consider ordering your new car if you don’t see what you want on the dealer’s lot.
This may involve a delay, but cars on the lot may have options you don’t want —
and that can raise the price. However, dealers often want to sell their current
inventory quickly, so you may be able to negotiate a good deal
if an in-stock car meets your needs.
Take into considerations the added costs of maintaining a vehicle such as:
• Insurance
• Repairs
• Fuel
• Maintenance
• License plate renewal
• Parking
• Parking tickets
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Leasing
Vs. Financing A Car
The
following chart illustrates some of the pros and cons of leasing
or financing.
|
Lease |
Finance |
| You
do not own the vehicle. The vehicle remains under the name
of the Leaser. However, if you decide not to purchase, you
must return the vehicle at the end of the lease. |
You
own the vehicle and ownership is under your name. The finance
company may have a line on car until it's paid in full. |
|
Lease
terms are usually around 2 to 4 years. |
Loan
contracts are usually signed for 4 to 6 years. |
Type
of
Vehicle |
The
shorter term and lower monthly payment of a lease agreement
allow you to drive a new a more expensive vehicle every 2
to 4 years. |
Higher
monthly payments make driving a new or expensive vehicle every
2 to 4 years impossible. |
Up-front
costs |
Up-front
costs include a refundable security deposit, down payment,
first month's payment, taxes, license and registration fees,
and other fees |
Up-front
cost include down payment, taxes, license, registration fees
and other fees |
Mileage |
Most
leases apply a vehicle mileage limit. You will be charged
extra if mileage exceeds the contract limit when the vehicle
is returned. |
Unlimited
mileage
|
Monthly
payments |
Monthly
payments are calculated based on the vehicle's depreciation
during the lease term. Payments are usually lower. |
Monthly
payments are based on total amount of the purchase price including
interest charges, taxes and other fees. |
Insurance |
The
insurance premiums are usually higher |
The
insurance premiums are lower |
Maintenance |
Lessee
is responsible for the maintenance of the vehicle during the
lease term. |
Borrower
is responsible for the maintenance of the vehicle. |
Future
Value |
The
lessee faces the risk of the future market value of the vehicle. |
Borrower
has the risk of the vehicle's market value when you trade
or sell it. |
Vehicle
return |
Lessee
will need to return vehicle at the end of the lease. There
may be some end of lease charges. |
You
keep the car.
|
Early
termination |
You
are responsible for early termination charges and penalties
as stipulated in the lease contract. *Will affect your credit
rating if you do not meet the lease agreement |
You
are responsible for paying of the loan. * Will affect your
credit rating if you do not meet the loan agreement. |
Excess
wear |
You
might need to pay extra charges when you return the vehicle
if the lessor determines that vehicle wear and tear is over
the contract limit |
No
Limit, however, more wear and tear equals lower resale or
trade in value for your vehicle |
End
of term |
At
the end of lease, you can return the vehicle and walk away,
or purchase it for the residual value. |
The
vehicle is yours, the finance company removes lien. |
| |
•
A new vehicle more often
• Pay taxes only on your monthly payments , not the
full purchase price
• Affordable monthly payments
• Option to purchase at end of lease |
•
Pride of Ownership
• Unlimited usage
• Registration under your name
• Availability of longer terms |
|
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Did
You Know?
• In 2000, a new stolen and wrecked vehicle national program was
started to help make roads safer and to reduce auto theft.
• Police must report the theft to the Registry of Motor
Vehicles (RMV) the database is updated accordingly.
• A vehicle that is identified as stolen on this database
can only be changed when the vehicle is recovered by police.
• Potential buyers will now know from the vehicle registration
if the vehicle has been in a major accident.
• Consumers can also be certain that it is only after
inspection requirements are met that rebuilt vehicles are permitted
back on the road.
• A vehicle can be branded “stolen”, “salvage”,
“non-repairable”, or “rebuilt” on a
national database after police report the status of the car
to the RMV.
• To find out if the used car you are thinking of buying
is branded, you should the certificate of registration and permit
should include branding information.
• In order to get rid of an old vehicle you need to complete
a Damaged Vehicle Report and file it with an RMV location.
The vehicle will be branded according to the information you provide
on the report.
• To get more information visit an RMV office near you
or call 1-800-898-7668.
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Tips
On Saving Fuel
With
gas prices being the highest they have ever been, here are some
gas-saving tips, to increase your fuel economy and to reduce pollution.
Don’t
speed- Driving 100 km/h instead of 120 km/h will increase
your fuel economy by about 10 percent. Pride yourself on being
slow.
Avoid
"metal to the petal" starts-Flooring the gas
pedal wastes gas and leads to drastically higher pollution rates.
Anticipate
stops- So your vehicle can coast down. Accelerating hard
and braking hard wastes gas and increases pollution.
Keep
your tires properly inflated- For every 3 pounds below
recommended pressure, fuel economy goes down by about 1 percent.
Avoid
rush hour, if possible- Stop-and-go driving burns gas
and increases emissions of smog-forming pollutants.
Travel
light- When ever possible, clean out your trunk. An extra
100 pounds in your trunk can reduce fuel economy by about 1 percent.
Combine
trips – Run multiple errands at once.
Turn
off the air conditioning, if possible- AC increases fuel
consumption; at high speeds, open windows; use vents when ever
possible.
Check
your car’s air filter monthly.
Drive
less- Give your car a rest by taking public transportation,
riding a bike, car pooling, or walking.
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