New to Ontario? Learn the language of car buying before you shop

Imagine finding a vehicle you like, sitting down with the seller, and hearing terms like APR, UVIP, lien, certified pre-owned, or subprime financing. 

Even experienced car buyers can come across unfamiliar terms that make the process more confusing than it needs to be. 

Understanding a few common car-buying words and phrases before you start shopping can help you make informed decisions, ask the right questions, and avoid costly mistakes. 

Start with the regulator

One of the first terms you should know is regulator. 

A regulator is an organization that oversees an industry and ensures businesses follow the law. In Ontario, OMVIC regulates motor vehicle dealers and salespersons , investigates complaints, takes enforcement action when necessary, and helps consumers understand their rights. 

Think of a regulator as a trusted source of information before you buy and a source of important consumer protections when you buy within the regulated marketplace. 

Its job is to help create a fair marketplace and provide consumers with the information they need to make informed decisions. 

Common Ontario car-buying terms

Private seller versus OMVIC registered dealer 

A private seller is an individual selling their own vehicle. 

An OMVIC registered dealer is legally registered to sell vehicles in Ontario and must follow specific consumer protection laws and requirements. This means when you buy a car from an OMVIC registered dealer you are entitled to certain protections.  

Illegal seller 

An illegal seller is someone who buys and sells vehicles for profit without being registered as a dealer. These individuals, also known as curbsiders, often pose as private sellers and hide important information about a vehicle’s history or condition. 

Bill of sale 

A bill of sale is the written agreement between you and the Registered Dealer. It outlines the details of your purchase, including the vehicle you’re buying, any agreed-upon features, upgrades, warranties or other promises, and the total purchase price. 

If you found the vehicle through an advertisement, make sure the price on the bill of sale matches the advertised price, with only HST and licensing added. 

If you’re financing the vehicle, the bill of sale should also include key financing details, such as the interest rate and payment terms. 

It should also include any required disclosures about the vehicle, such as information that could affect your decision to buy. OMVIC requires certain disclosures to be provided in writing as part of the bill of sale. Learn more about required disclosures here. 

Disclosures 

Disclosures are important facts about a vehicle that must be shared with the buyer and included in writing on the bill of sale. These may include previous use, branding, significant repairs, or other information that could affect your decision to purchase the vehicle. 

Certified pre-owned 

In Ontario, a certified pre-owned vehicle (CPO) is a used vehicle that has been inspected and certified through a manufacturer’s (such as Ford, Toyota, Subaru, etc.) official CPO program. To qualify, the vehicle must meet specific standards set by the manufacturer and undergo a comprehensive inspection. Because each manufacturer operates its own CPO program, the eligibility requirements, inspection process, and benefits can vary by brand.  

UVIP (Used Vehicle Information Package) 

A UVIP contains important information about a used vehicle, including registration history and other key details. In Ontario, only private sellers are required to provide a UVIP when selling a used vehicle. When buying a car from an OMVIC-registered dealer, a UVIP is not required, but purchasing one on your own is still a smart step before you buy.  

Vehicle history report 

Think of a vehicle history report, such as a Carfax, as a background check for a vehicle. It can provide information about reported accidents, registration history, liens, and other records that may affect the vehicle’s condition or value. 

Where a UVIP tells you about the vehicle’s ownership and registration in Ontario, a vehicle history report helps tell you what the vehicle has been through over its lifetime. 

Lien 

A lien means the vehicle hasn’t been fully paid for. If money is still owed, the lender may have a legal right to the vehicle. 

When you buy from an OMVIC registered dealer, you’re protected under Ontario law. Dealers are required to ensure the vehicle is free of liens. If you later discover there’s a lien on the vehicle, contact OMVIC’s Complaints and Inquiries team. 

Before buying a used vehicle, check for any liens. You can do this through ServiceOntario or by reviewing a vehicle history report that includes lien information. 

As-is 

An as-is vehicle is sold without guarantees about its condition, and it may not even be roadworthy. If you purchase a vehicle as-is, you accept responsibility for any repairs or issues that arise to make it roadworthy. 

MSRP 

MSRP stands for manufacturer’s suggested retail price. It is the vehicle manufacturer’s recommended selling price for a new vehicle. As the name suggests, it’s only a suggested price. Dealers are not required to sell a vehicle at the MSRP and may charge more or less than that amount. 

APR 

APR stands for Annual Percentage Rate. It represents the total yearly cost of borrowing money to finance a vehicle, expressed as a percentage. Unlike the interest rate, the APR includes the interest rate plus certain borrowing costs and fees, giving you a better picture of the total cost of financing. 

If you’re financing a vehicle in Ontario, the financing agreement and bill of sale should clearly outline the financing terms, including the APR, so you understand the total cost of borrowing before you sign. 

Finance versus lease 

Financing means you are making payments to eventually own the vehicle. 

Leasing means you are paying to use the vehicle for a set period before returning it or potentially purchasing it at the end of the lease. 

Credit score 

A credit score is a number lenders use to assess borrowing risk. Your credit history can affect both financing approval and interest rates. 

Prime versus subprime financing 

Prime financing is generally available to buyers with stronger credit histories and often comes with lower borrowing costs. 

Subprime financing is intended for buyers with limited or challenged credit histories and often carries higher interest rates. 

Term and amortization 

The term is the length of your financing agreement. 

Amortization refers to the total period over which the loan is repaid. Longer repayment periods can reduce monthly payments but may increase the total amount paid over time. 

Primary applicant and co-applicant 

The primary applicant is the main borrower on a financing agreement. 

A co-applicant shares responsibility for the loan and may help strengthen a financing application. 

No cooling-off period 

One of the most important rules to understand is that there is no cooling-off period for motor vehicle purchases in Ontario. Once you sign a contract, you may be legally bound by its terms. 

Learn before you sign 

Buying a vehicle is one of the largest purchases many newcomers will make. While the process may be different from what you’re familiar with, understanding the language of car buying can help you navigate the marketplace with confidence. 

Before you shop, take time to learn the rules, understand your rights, and know who you’re buying from. 

Start with OMVIC. Look twice. Buy smart.