Consumer Tips - Major Purchases
Many consumers may be smart day-to-day shoppers but are less confident when it comes to a major purchase such as a home or car. Please read this section carefully, as the suggestions below can help you make a wise decision.
Houses
Experts say that most consumers spend more time on a visit to the grocery store than they do inspecting the biggest purchase of their lives - their home.
The best way to shop for a new home is to prepare a "must have" list. It is recommended that you spend a lot of time inspecting all the aspects of any home that you're serious about buying. When you have complaints about real estate agents, contact your provincial or territorial consumer affairs office or real estate association or commission.
Figure out what you can afford, based on a mortgage payment of up to 30 percent of your income. Talk to your regular bank, then compare mortgage rates, terms and conditions at a number of financial institutions. They vary widely. You can get a good idea of current prices in the newspaper. Decide which residential areas you want to consider and check the local prices.
Unless you're in a building trade, you won't necessarily see the faults in a home you're considering. Find a competent home inspector. Ask friends and neighbours for references. Be prepared to follow the advice the home inspector offers. He or she should always provide a written report. Keep in mind that home inspectors are not regulated and they are not liable for giving you incorrect information. To find an inspector, you can contact the Canadian Association of Home and Property Inspectors.
For more information on home buying, please see the "Buying a Home" section of the Canadian Mortgage and Housing Corporation (CMHC) website.
New Homes
Talk to your local branch of the Home Builders Association for general information. Many home builders associations provide brochures and sample contracts to help consumers understand the market.
Provincial consumer and housing ministries and their websites are also helpful. For more information on buying a new home, you can consult the "Homeowner's Manual" produced by the Canadian Mortgage and Housing Corporation (CMHC).
Condominiums
You may be considering a condo, but if you've never lived in one, you should check into all the restrictions and rules before you buy. Ask to see a copy of the corporation by-laws; they may include very specific conditions, such as whether you may put in a garden or hang seasonal lights outside. Talk to people in the community. Find out about maintenance fees and how often they have increased. Check whether there is a reserve fund in place for repairs and maintenance of major items, such as roofs, driveways and parking lots.
See also the Canadian Mortgage and Housing Corporation's (CMHC) "Condominium Buyers' Guide".
Motor Vehicles
Buying a new vehicle can be a big thrill, but that thrill can quickly wear off when the car is not as it was represented. Before you start looking for a car, van or personal-use truck, think about what you require. Keep in mind the distances that you typically travel, the road conditions (highways versus unpaved roads) and the types of loads you carry. No matter how appealing the sports car is, you'll end up unhappy if it doesn't do the job.
Choosing the right dealer can make a big difference in avoiding problems both during and after the purchase. Take the time to check potential dealers and always comparison shop. Each dealer may offer you a different "deal" on the same make and model.
Unfortunately, high-pressure sales tactics are still a problem in many areas. Don't let yourself be talked into something that you don't want or can't afford. If you're not satisfied, walk out.
Please remember that once you have signed a contract with a dealership or used vehicle seller, the contract is binding. As soon as both sides have signed, the seller is not obliged to let you out of the contract if you change your mind. There is no cooling-off period.
Make sure that you discuss all the options that you want and be careful of dealers who want to sell you a vehicle that's "loaded." Although options are generally sold in packages, there are some options you probably won't require and shouldn't pay for. When you buy near the end of the season, you may not be able to get all of your choices.
Carefully consider the question of whether to buy or lease. You can't beat an outright purchase paid in full, but few people can afford that option in today's marketplace. Whatever you decide, read the contract carefully. Compare possible financing arrangements available from a number of lenders. The difference in interest rates and prices may surprise you.
Don't forget that the cost of driving includes service, parking, insurance and fuel, and should figure into your budget. In urban areas, many Canadians find the option of renting a car only when they need it to be more cost-effective than buying.
When buying a used vehicle, consumers should always check the vehicle's history and have an independent mechanic inspect the vehicle.
Every so often, someone buys a car that is a "lemon." Check with your provincial or territorial consumer affairs office and auto protection agencies to see whether they can help. Also, the Canadian Motor Vehicle Arbitration Plan, listed in the directory of this book, provides binding arbitration that may be an alternative to court.
