Buying your first car in Ontario: 7 things to know

By Aneesh Chatterjee

Posted on October 18, 2021
car keys

Whether you’re new to the country or you’ve been here a while, a first car purchase is a big step for anyone. Cars are expensive, need a lot of maintenance and care, and driving is a huge responsibility. Even so, people still buy cars and still drive, because it’s nice to have your own freedom! If you’ve made the decision to purchase a car, here are some things you should keep in mind.

1. Buy second-hand

This might seem obvious, but it’s very important to stress that the benefits of buying a second-hand car far outweigh the novelty of a brand new vehicle. The first consideration is cost: Second-hand cars are cheaper. This isn’t just because the car has been previously used. Brand new cars come with a long list of fees, taxes, and additional charges on top of the market price of the car itself.

According to the Ontario Motor Vehicle Industry Council (OMVIC), all these prices must be included in the advertised price of a new car. These prices include freight fees, safety test fees, government levies like air and tire taxes, pre-delivery inspection fees, administration fees, and OMVIC fees (if a car dealership is listed under OMVIC).

These are simply the mandatory fees that come with the list price of a new car. Additional charges can include any add-ons like security and theft prevention products, warranties, pre-filled fuel, and tire protection. On top of the already-exuberant prices of many brand new car models, these fees will make a new car purchase extremely expensive.

old car

A second-hand car might have a lot of mileage and some wear and tear, but if you search diligently, you can find a good-quality, decent vehicle that will serve its purpose and save you a lot of money. While a second-hand purchase also comes with some additional fees, it’s still much lighter on your wallet.

2. Where should you look?

There’s a long list of online portals where you can browse used cars, and the price range is very wide. Some used cars can be found for $6000 or less, while others cross $10 000 to $20 000. Prices will depend on the make and model of the car, as well as the year of its release. Generally speaking, newer releases and flashy brands will cost more. What kind of car you choose is up to you, but making functionality your top priority could save you money as well.

Some prominent places you can search are:

These three websites offer listings that come with a vehicle history report from CARFAX, which you can request to view. As we’ll discuss later, history reports are also crucial to your first car purchase. CARFAX offers reliable reports, so search in these three websites if you want that added benefit.

If you want to expand your search, other popular platforms include:

Regardless of where you buy from, you should be able to access the car’s maintenance history and records. This is done by getting a Vehicle Identification Number (VIN), so always ask for the VIN before buying a car from anyone!

3. Accessing history reports using the VIN

Having a car’s VIN is one of the best ways to check that you’re making a legitimate purchase. As anyone can sell a used car, the previous owner’s testimony of the car’s quality may not always be reliable. They could be trying to get rid of the car by selling it to you, without telling you about some hidden issues it might have. This is why getting the car’s VIN is crucial.

The VIN plate (featuring the number) is usually located on the car itself: On the dashboard, the windshield on the driver’s side (inside the car), or on the driver’s door jamb, the surface which the driver’s door closes on. Older car models might have it in other places on the car as well. The VIN is also found on insurance documents, ownership documents, and service history. If you can’t locate the VIN plate, ask the car’s owner for assistance.

It’s important that you see the VIN plate for yourself. Check the actual plate number, and cross-reference with the number printed on any documents to make sure they match. This is because people can alter the VIN to hide the car’s service history, something often done when a car has been reported as stolen in the past. If the VIN doesn’t match on any of the documents or the plate, keep searching!

There are a few portals you can visit to check a VIN, some of which are: 

4. What to look for in a history report

What are some red flags in a car’s history? These reports include a car’s complete history, including previous owners, repairs, accidents, etc. Here are a few examples of things you don’t want to see in a history:

  • Vehicle title not in the seller’s name: If the car is not in the seller’s name, it means they’re not legally allowed to sell the car. Do not make this purchase.
  • Many past owners: If a car has passed through a long list of owners, it might indicate there’s something wrong with the car which isn’t being honestly disclosed.
  • Similar accidents: If there are multiple incidents of very similar accidents occurring, it might be caused by a malfunctioning component of the car. This is a potential safety hazard.
  • Odometer fraud: The odometer is a number on the car’s dashboard that shows how many total kilometers it’s traveled. Generally, if this number is too high, the car’s value goes down. Because of this, odometers are often tampered with to show lower numbers, enabling the car to be sold at a higher price than it’s actually worth. A history report will state the car’s actual odometer reading. If it doesn’t match the reading on the dashboard, it might indicate fraud.

For a full list of possible red flags in a history report, this article is comprehensive.

5. Before you buy: Pre-purchase inspection (PPI)


This inspection is performed by a licensed professional, and is essential for finding any hidden problems in the car you’re thinking of buying. While it’s not uncommon for used cars to have damage in the past, the inspector can check if this damage was repaired successfully, or if it’s still a problem. Moreover, if the seller claims there was no damage, but the PPI reveals there was, you can avoid doing business with a dishonest seller. You will have to pay anywhere between $100 to $200 for an inspection, but this is money well spent! If you end up buying a faulty car without getting an inspection, it could cost you thousands of dollars in repairs.

There are many places offering inspection services. Contact your local Canadian Tire or auto body shop and ask where you can get it done. You can also Google “motor vehicle inspection stations” to find what’s available near you. This form offered by the Automobile Protection Agency shows what needs to be checked in the car; if you want, you can print this out and take it to your inspector to discuss what needs to be evaluated.

6. Take it for a test drive

Test-driving a potential car is necessary to make sure you know what it feels like before you buy it. If the seller refuses to let you take it for a test drive, this might be a red flag. Test drives let you check the car’s brakes, parking, responsiveness, signals, wipers, headlights, and other internal features. You should plan a route before going on your test drive. This list offers comprehensive advice on how to plan an effective test drive.

7. Registration, bill of sale and taxes

The least exciting part of getting a new car is paperwork, but it has to be done. Additionally, this isn’t complete without taxes. In Ontario, for example, you have to pay 13 per cent retail sales tax (RST) on the price you paid for the used car—not to the seller, but to the provincial government. Keep this in mind when you’re budgeting your car search.

A bill of sale is the most important document when you’re buying (or selling) a used car. Much like a receipt, the bill of sale shows what you bought (like the year, model, and make of the car), the price you bought it at (for tax purposes), and the transfer of ownership proving it’s now your car. A bill of sale is also necessary for registering your car once you’ve bought it. For a full list of what needs to be stated on a bill of sale, follow this guide.

Finally, registering your car grants you your vehicle permit, license plate, and license plate sticker. You have to register a used car within six days of buying it. This is done at any ServiceOntario center. There are some fees involved: $32 for a permit; $59 for a license plate; for a license plate sticker, it’s $60 in northern Ontario and $120 in southern Ontario.

There’s a lot to learn about car ownership, so take your time and get all the help you can. You’ll be on the road in no time!

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