CAR SHOPPING
Ellen Roseman has some advice for anyone in the market for a new vehicle,
New car sales are soft in Ontario. As analyst Dennis DesRosiers says about the September numbers, “Central Canada is holding back the light vehicle market in this country.”
Overall sales in Canada are up 6.7 per cent this year, but Ontario lags with a 5.9 per cent increase and Quebec is up 2.9 per cent. The high dollar hurts our manufacturing operations.
What does this mean for consumers? You may face more pressure than usual when you go into a dealer’s showroom.
I recently heard about two elderly buyers signing contracts for cars they couldn’t afford. Family members were trying to reverse the deals.
Daphne McNutt’s 91-year-old father was sold a new Audi sports car by a dealer that financed the entire $48,000 price. He lives on a small income.
“The interest rate is 1.9 per cent. Financing is until 2016,” she said. “How they could approve him for a large loan? The dealer said if he had no debt and a good payment history, he could get credit.”
Leigh Archer said her 80-year-old great grandfather was sold a used Hyundai Sonata, even though he kept saying he couldn’t afford it.
“The salesman promised that the vehicle would tow his trailer. It would not. English is not his primary language,” she said.
“And the dealer manipulated the payments so that they looked like they met his budget. He was pressured to sign a car loan amortized over 11 years. With his poor health, he will not live to see the end of this loan.”
Once you sign a contract, you are legally bound to a deal. You may have to pay damages to cover the dealer’s costs, even if you withdraw a few hours or a day later.
Unscrupulous salespeople often make up reasons why they need a signature. Don’t sign or leave a deposit, unless you want to kiss your money goodbye. A young woman named Jaime traded in her 2010 Mazda for a 2012 model after the dealer wrote her a letter. She agreed to a six-year loan, despite her belief that she had a five-year loan before. “The dealer said ‘No, your 2010 is financed over 72 months.’ When I got home and looked at my old bill of sale, sure enough, it was over 60 months,” she said. The dealer refused to cancel the contract when she returned with her father, who had co-signed the 2010 deal. “They coaxed me into their office by telling me I would be getting exactly the same deal. I’m now stuck with this 2012 Mazda that I don’t want for another six years, when I could have had my 2010 paid off in three years.” Here’s how to avoid getting into a transaction that isn’t driven by your needs but by a dealer’s greed.
Never believe what you’re told without some double-checking.
If you’re trading in an older car, keep the deals separate. Work out the best terms for the new car first before talking about the trade-in.
Get information about the dealer’s wholesale cost and manufacturer’s financing, rebates and incentives. Paying a small fee for this data is worth the cost in helping you negotiate, says Viraf Baliwalla of Automall Network.
Take out a membership in a non-profit consumer group, such as the Automobile Protection Association Car Help Canada. Both give new vehicle price information and referrals to trusted dealers. The APA has a 30-day money back guarantee if you buy a used car from one of its recommended dealers in the Toronto area.
Vlad Bretgoltz used the APA’s buying service and got an Infiniti from a referred dealer at a prenegotiated price.
“A for-profit business has the intention to sell a car at all costs (and possibly receive a commission on the sale),” he said. “A nonprofit is interested in a fair transaction for the consumer.” Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or www.ellenroseman.com