Ask The Expert

ASK AN EXPERT

A dealership who has nothing to hide will have no problem answering any of these questions. They should be happy you are asking.
Questions to ask the dealer when looking to buy a vehicle.

Q: What is the term (length) of the loan and what is the interest rate? Will there be anything to pay at the end of the loan?
A: There are loan types out there (not leases) that reduce your monthly payment but you owe a balloon payment at the end of the term. These are often called buyback loans. In most cases the amount you owe is much higher than the value of your vehicle when the loan term ends. You will be responsible for refinancing the vehicle at the end of the term usually at a higher rate. The difference between a loan like this and a lease is you can walk away from a lease at the end of the term buy you can’t walk away from your responsibility to pay off your “buy back” loan.

Q: Can I qualify for 0% financing?
A: If you have a decent credit rating and earn enough money to afford a car payment, you will likely qualify for 0% financing. Otherwise, you may be asked for a co-signor.
Q: What is the warranty coverage?
A: Car manufacturers allocate a cost to all vehicles sold to the dealerships. This is a cost like all other costs, steel, paint, tires, etc. But this cost is based on expected average repairs needed over the term of the warranty. The better the warranty coverage, the more faith the manufacturer has that their vehicle will have fewer problems.

Q: What fees will be charged on top of the purchase price?
A: This is a fair question to ask anytime you buy a vehicle new or used. There may be hidden administration fees, documentation fees, etc. These fees are different for every dealer and can become very significant when added together.

Q: What does Consumer Reports have to say about the reliability of your vehicles?
A: Ask the question to the dealer or check for yourself. Consumer Reports gives you some extra information that could be useful when deciding to buy a vehicle.

Q: What is the fuel mileage?
A: When researching your vehicle purchase, the fuel mileage is a significant cost to run your vehicles over the years. Your monthly payment plays a role in your decision to buy and so should the fuel economy as this is also a monthly cost.

Q: What does overall cost of ownership mean and how is it determined?
A: All costs to buy and run the vehicle are factored into the cost:
1. Cost of vehicle
2. Interest rate on lease or loan
3. Fuel mileage
4. Expected repairs and maintenance
5. Resale value
So while the monthly payment is a fixed and known cost all the other costs mentioned above will show you the true cost of owning your next vehicle purchased.

Q: How does your dealership rank for customer satisfaction in sales and service?
A: Buying a vehicle starts a relationship with your dealer for the next few years. Warranty work will have to be done there and service work should be done by the factory-trained mechanics. All car manufacturers rank their dealers across the country. It is a fair question to ask how the dealer you are dealing with ranks among their peers.

Q: Can I trade in my current vehicle?
A: Most dealers will take any vehicle you have on trade. They will try to resell some and others will be sold to a wholesaler, auction or junk yard.

Q: Should I wash or have my vehicle detailed when I bring it to the dealership to have it appraised for the trade-in value?
A: Not necessary. This will rarely have any bearing on the trade-in value of your vehicle.

Q: Should I lease or buy?
A: This depends on what your long-term plans are.
If you plan on keeping your vehicle for 10 years, I would recommend buying, here’s why:
1. In most cases, the interest rate over the term of your purchase is very good.
2. If you lease and plan on buying out your vehicle, you will have to finance the lease buyout price at the end of the lease, usually at a higher rate.
If you think you might like to trade your vehicle after 3-5 years, I would consider leasing, here’s why:
1. The manufacturer estimates what the buyout price is of the leased vehicle will be at the end of the lease term. If they estimate higher than what the real value will be than you as a lessee wins. If they estimate lower than what the real value will be then you can buy out your lease and resell it for a profit if you desire. Remember in a lease, you only pay the difference between the purchase price and the buyout price. If the buyout price is too high, the difference between the two prices is small and you pay less than if you were to trade in your vehicle over the same time period.
2. Instead of trading your vehicle, you let the lease run out and you don’t have to worry about how much you will get for your trade.
Factors to be aware of:
1. Is the interest rate better for a lease or purchase?
2. Are there better deals this month for leases or purchases?
3. What is the penalty for excess kilometers when I turn in my lease?
4. What damages am I responsible for when I turn in my lease.
Lastly, I would look at excess kilometer charges and damages as part of the overall cost of the vehicle. If you purchased a vehicle, the value of a trade would be determined by the amount of kilometers on the vehicle and the condition it is in.
As you can see, this is a complicated matter. Ask your salesperson or the sales manager to clarify anything you have questions about.

Q: What happens at the end of my lease?
A: You can buy it out for the lease buyout price at the dealership. OR, an inspector will check over your vehicle for damages and kilometers. If you are not over on kilometers and there is no damage, you simply bring the vehicle back to your dealership. If you are over on kilometers or there is damage, you will be billed for these excess costs after you return your lease.

Q: If I move to another province or out of the country, can I bring my leased vehicle with me?
A: You can bring your leased vehicle with you anywhere in Canada, no problem. However, if you move out of the country, you can’t bring your leased vehicle with you.

Q: Should I buy New or Used?
A: This depends on cash buy or loan, the interest rate on a used loan vs. new car loan, the price of the used vs a similar new vehicle and, warranty on the used vs the new.
ALWAYS compare a one- or two-year-old used vehicle to a new vehicle purchase. Sometimes the price and the interest rate on a one- or two-year-old vehicle is so high that the monthly payment is as high or higher than a new vehicle.
Here is an example to compare: Brand new 2025 vehicle with a monthly payment of $300 for 60 months vs a used 2023 vehicle with a monthly payment of $300 for 48 months. When the new vehicle loan is complete, the vehicle is 6-years-old (4 year loan plus 2-years-old when purchased). Plus, the new vehicle had bumper to bumper factory warranty for 3 years and powertrain warranty for the entire 5 years. The warranty on the used vehicle expired during the loan term. Also, the used vehicle had wear on the tires, brakes, etc when it was purchase.
When purchasing used, consider interest rate and price. There are good and bad deals when you compare to New vehicle purchases.

Q: How do I save HST on my trade-in?
A: You only pay the HST on the difference between the purchase price of the vehicle you are buying and the value of your trade-in. I.e. purchase price $20,000, trade-in $9,000. You only pay HST on $11,000.

Q: What do I need to do to maintain my warranty?
A: Regular maintenance should be detailed in your owners’ manual and your salesperson should go over this with you at the time of sale.