Legal Issues Involved in Purchasing

The Purchase

• Lease?

• Loan?

• Outright purchase?

Each of the above methods has their advantages and disadvantages. Your credit rating may decide the above for you. A person with a poor credit rating may be charged 20% of the vehicle value or more if they purchase with a loan. Leasing offers the chance to own a new vehicle every few years; however, you never have equity (truly own it) in your vehicle and you are faced with a decision after your lease expires. As well, leasing limits how many kilometers you can drive and requires you to keep full insurance on your vehicle. To purchase a vehicle outright (use cash) means that you may be limited to a used vehicle and (as with loans) maintenance is more of an owner issue.

Once you have made your decision, it is now time to worry about the actual purchase.

If you are buying privately, you should have a lien check performed to ensure that the vehicle will be solely yours. This ensures that the car will not be taken away from you at a later date because the previous owner owed money to someone. If you are buying from a dealer, be aware of added charges, such as a documentation/preparation fees--these are usually upwards of a hundred dollars or more and can be waived if requested. If the dealer tries to sell you any aftermarket options (i.e. undercoating), you are better off to have it done by a shop that specializes in that process (it may be cheaper as well). If you sign a contract "as is where is "those are the conditions you get. ''As is where is" means there are no warranties offered. You get whatever you get even if it falls apart after the sale. "As is where is" is common on older, less expensive vehicles; however if it is a newer vehicle be cautious (try to get a warranty if you can).

Before you decide to purchase a vehicle from a dealership, ensure that you conduct some research on that dealership. Call the Better Business Bureau and determine the dealership's reputation. Also determine how long the business has existed. If they are new, they could potentially "go under." Your manufacturer's warranty will continue at another dealer, but any other special dealer offers would cease with the closure of the business (i.e. life time oil changes). If you have a vehicle already, check to see what type of trade in value they will give you. Perhaps it is in your best interest to sell in privately. Also check to see what type of financing rate the dealer will offer and what payment options are available.

Ask the dealership about their warranties:

• Do they service the vehicle for you? Is the warranty unconditional? If not, what are the conditions?

• What extras are included with the vehicle?

• How many vehicles do they have?

Compare this dealership to other dealerships that sell the same vehicles before you decide to purchase.

The most important thing to remember about a contract is to read it carefully before signing. Once signed, it is a binding legal agreement. Before you sign, read the contract completely. Make sure you understand fully what it includes and what it does not include.

Check that the contract includes:

• Your name and address

• Seller's name and address

• Make, model and year of vehicle

• Vehicle identification number (VIN)

• Odometer reading

• Statement that the vehicle if free of liens

• Price and how you will be paying

• Agreed price on vehicle trade in (if any)

• Special conditions (vehicle inspection required; deposit refunded)

• Any other promises, warranties; or statements made by the seller about the vehicle

Once you have signed the contract, you are committed to the deal. Before signing, be absolutely positive that every important detail about the vehicle has been included in the contract.

When you take delivery of your vehicle, make sure it is in the same condition it was when you test drove it. Be sure you have the owner's manual, a copy of the "Bill of Sale," and any other records that should accompany the vehicle.