T is for transportation
Before buying a car, you should calculate the expenses and understand the vocabulary used in financing contracts.
There are many costs associated with buying a car.
The most common expenses:
Gas
Variable cost depending on the vehicle, the number of kilometres you drive and the price of gas.
To estimate your car's gas mileage:
- Fill up the tank.
- Divide the cost by the number of kilometres you can drive on the full tank.
Maintenance
Variable cost depending on the vehicle and the number of kilometres you drive. Proper car maintenance will optimize fuel consumption, reduce emissions and extend the life of your vehicle.
Maintenance schedules recommended by car dealers and manufacturer websites usually include services like changing the oil and filter, rotating the tires and cleaning the brakes.
Occasional repairs
You can't always predict when your car will need repairs, but you can expect them to occur pretty regularly. Getting repairs taken care of right away also helps extend the life of your vehicle.
Insurance
The cost of annual renewable insurance depends on the type of vehicle, how experienced the driver is, the driver's age and place of residence, coverage desired, etc. You can request an insurance quote before buying a vehicle. Learn more about car insurance.
Tires
Good tires can reduce your risk of an accident and your car's fuel consumption. In Quebec, winter tires are required between December 15 and March 15. Tires must be replaced every 2, 3 or 4 years according to use.
Driver's licence
Your driver's licence is renewable annually, and the cost varies according to the number of demerit points on your driving record.
Registration
Your car registration is renewable annually. The cost varies according to the owner's place of residence, type of vehicle and how it's used.
Miscellaneous expenses
Accessories, windshield wipers, maintenance products, car washes, parking, etc.
To learn more, visit the website of Société de l'assurance automobile du Québec (SAAQ).
Down payment or deposit
A sum paid by the purchaser to the seller as a promise to buy. Down payments are sometimes non-refundable.
New car taxes and fees
Not included in the price: dealers may charge environmental fees on the sale of new tires.
Included in the price: transport costs and air conditioning excise tax.
Loan fees
The real cost of a loan includes capital, interest rate, insurance (optional), administrative fees, etc. This information must be clearly indicated on the financing agreement offered by the dealer or financial institution.
Warranty
Legal: Under the Consumer Protection Act, vehicles purchased from a retailer must be used for normal purposes for a reasonable period of time determined by the price paid. Before offering an extended warranty, the retailer must:
- verbally provide the purchaser with information about the legal warranty
- give the purchaser a written document that explains the legal warranty
- tell the purchaser whether the vehicle comes with a manufacturer's warranty and how long it lasts
Extended: An optional warranty that extends the standard warranty on the vehicle, for an additional cost.
Monthly payment
A monthly amount that goes toward paying back a loan. It includes payment for some of the capital, interest and finance charges.