If you lease or buy a car from a registered dealer in Ontario, you will be presented with a sales contract to sign. This contract is legally binding, so you should read it carefully before making a commitment.
When a sales contract is signed by a salesperson, the sales manager and the buyer, it is considered binding for both the buyer and the seller. Also, Ontario law does not acknowledge any sort of "cooling off" period. This means that after a buyer signs a sales contract, they can't just change their mind and decide not to honour it. Instead, there are steep penalties attached to cancelling a contract.
What You Will Find in a Sales Contract for a Purchased Vehicle
On a standard sales contract from a registered auto dealer in Ontario, you should see the following:
The assigned interest rate will also be disclosed in the contract. And before you sign the sales contract, you should understand exactly how much you will be paying in interest. You should also know your monthly payment amount and the final cost of the vehicle. This total amount should include all of the required payments, plus interest and all fees.
An Important Part of the Sales Contract for a Leased Vehicle
If you opt to lease your car, there is one major thing that you will want to look for in your auto lease agreement. This is the maximum kilometres that you will be allowed per year. You should also know the amount that you will be charged should you put excess kilometres on the vehicle.
Before leasing a car, you should have an idea of how many kilometres you expect to drive each year. If you know that you will go over the amount stated in the contract, you should let your dealer know. Usually, it is less expensive to have extra miles included in the original contract than to pay fees at the end of the agreement.
Sales Contracts and the New Motor Vehicle Dealers Act
The new Motor Vehicle Dealers Act (MVDA) brings additional transparency to auto sales contracts. Now, contracts must state that consumers have access to the Canadian Motor Vehicle Arbitration Plan (CAMVAP). This is a not-for-profit corporation that acts as a neutral third party in settling disputes between consumers and car manufacturers. Typically, these disputes involve alleged manufacturer defects and warranty issues.
How Understanding Sales Contracts Helps Both Parties
As a customer, fully understanding the legal obligations that are attached to your sales contract will keep you out of trouble down the road. On the other hand, dealers want to avoid misunderstandings that might lead to a soured relationship with a customer.
Therefore, when you're buying or leasing a vehicle, if anything in your contract doesn't make sense, ask your salesperson to clarify before you sign. They should be more than willing to explain any part of your agreement that is unclear.
Credit Issues and Financing Options
If you need to buy a car with damaged credit or no credit, you may be worried about whether or not you will be approved for an auto loan. This is understandable, but Canada Auto Loan can help. We can match you with a dealership in your area that can give you your best chance at an approval.
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