Bookmark this page: It’s our glossary of automotive terms for car buyers. Anytime you or someone in your circles is in the market for a vehicle, check back here to learn the basics terminology for buying a car or to get a refresher. Buying a car can be exciting but also daunting, so it helps to learn a few words before you start.
Ontario law requires that car dealerships disclose in writing and plain language-specific issues with a car’s history, including significant accident damage.
All-in pricing saves you from pricing surprises at the dealership. All car dealerships in Ontario can only advertise all-in pricing. Generally, only taxes and licensing can be added to the advertised price.
Buying your next vehicle from an Ontario dealership means you can apply for compensation if something goes wrong. Purchasing privately does not give you access to this fund.
A car loan means a lender, such as a bank, lends you money to buy a car. Your loan is divided into equal monthly payments, including interest, and your vehicle is used as collateral.
This is a used vehicle that is sold by a dealership of the same make, thoroughly inspected, and then backed by a manufacturer’s warranty.
See certified pre-owned car, above.
In Canada, anyone selling cars for a profit must be registered with the government. In Ontario, the body that oversees car dealerships is the Ontario Motor Vehicle Industry Council. Those who illegally sell cars for a profit, but are not registered as dealers, are often referred to as curbsiders. BEWARE!
Warranties cover you for repairs and sometimes even replacement in certain situations. Extended warranties go beyond the manufacturer’s original warranty.
Financing refers to any arrangement with a lender—bank, leasing company, dealership, etc.—who will either loan you the entire sum of the purchase price of a vehicle or “RENT”you the vehicle in a lease.
Leasing is similar to renting but is a multi-year commitment. The dealership retains ownership of the vehicle and you pay a monthly amount to use it. These payments are typically less than the monthly payments of a loan.
A car that is free from any liens and therefore cannot be repossessed by the company—usually a financial institution—in case of non-payment. Registered dealers cannot sell cars with liens on them.
When you purchase a vehicle from a dealership, you may be allowed to trade in your current vehicle. The amount your current vehicle is assessed at is used to reduce the final price of your new purchase and the amount of HST you will be paying.