Thinking Of Buying a Car? Make Sure You’re Ready Before You Sign

Buying a vehicle is exciting, but it’s also a big decision. In Ontario, once you sign a contract with a registered dealer, it becomes legally binding. That means you can’t simply change your mind and walk away. 

Some salespersons may try to pressure you into a quick decision by saying there’s only one vehicle left or asking you to leave a small deposit to “hold” the car. 

Remember: you don’t have to make a decision on the spot. Take time to ask questions and thoroughly review contracts before signing. 

You have the right to understand every part of the agreement, and to walk away if something doesn’t feel right. 

Here are the top five things to check before signing a vehicle purchase agreement: 

1. All-In Price Breakdown

Under the Motor Vehicle Dealers Act (MVDA), dealer advertisements must clearly display the all-in price for a vehicle. This means the advertised price of the vehicle must include all fees and charges, except for HST and licensing. The total price on your bill of sale should match what was advertised. 

Check for: Administration fees, freight, PDI (pre-delivery inspection), tire levies, and other fees that should already be included in the final advertised price.  

Visit OMVIC’s  all-in price advertising page to learn more about your rights and what to look for in vehicle advertisements.  

2. Get Disclosures in Writing

Verify the vehicle’s make, model, year, VIN, odometer reading, and any history disclosures, especially if you’re buying used. Dealers must disclose in writing whether the vehicle was in any accidents over $3,000, if it’s been rebuilt, or if it was used as a rental, taxi, or emergency vehicle. 

If the vehicle is not currently in stock or must be factory-ordered, make sure the delivery timeline is clearly stated. Understand if the vehicle will be ordered from elsewhere, and ensure the contract reflects any conditions related to that process. 

Protect yourself before you buy; double-check the details and don’t be afraid to ask questions. Make sure all required disclosures are in writing and the contract clearly outlines timelines and conditions. Learn about mandatory by visiting OMVIC’s mandatory disclosures page.   

3. Financing or Lease Terms

If you’re financing or leasing, read the terms carefully. This includes the interest rate (APR), payment schedule, term length, and total cost after interest. You should also see any optional add-ons like extended warranties or rustproofing clearly listed—and not included without your consent. 

Protect your purchase by reviewing all finance and lease terms carefully. Understand the full cost and make sure everything is clearly documented. Don’t rely on verbal promises. If it’s not in writing, it’s not enforceable. Learn more about financing disclosures at omvic.ca.  

4. Refund, Cancellation Policy and Liquidated Damages

There is no cooling-off period in Ontario. Once you sign a contract with a registered dealer, you are committed to the purchase. This is why it is so critical to carefully read the entire contract and any associated documents (like a financing agreement) and only sign them when you’re absolutely sure you want to go ahead with the deal. 

It’s important to check whether the dealer allows cancellations under specific conditions.  

Look for a liquidated damages clause—this outlines the penalty you could face if you try to cancel the contract. This fee can be substantial, so know exactly what it means before signing. It often also includes forfeiting your deposit. 

Get It in Writing 

No matter what a dealer promises—whether it’s a free oil change, specific delivery date, or repairs—make sure it’s written into the contract. Verbal assurances are not enough and may not hold up if issues arise later.  

When Can a Contract Be Cancelled? 

Under Ontario law, a vehicle contract can typically only be cancelled if: 

• The dealer agrees to the cancellation in writing. 

• A condition in the contract (e.g., financing approval or trade-in valuation) is not met. 

• The vehicle was misrepresented with the dealer failing to disclose required information under the MVDA (the vehicle was branding status or previous use). 

• The dealer misrepresented the vehicle or violated consumer protection legislation. 

Remember to always read the full contract and financing terms carefully. Ask about cancellation policies and look for a liquidated damages clause, which could mean losing your deposit or facing other penalties. Visit OMVIC’s resource page to learn more about cancelling a purchase agreement. 

5. Trade-In Details (If Applicable)

When trading in your vehicle, the bill of sale should clearly show the trade-in value, any remaining loan balance on your vehicle, and how this impacts the final price. Make sure these details are correct before you sign. 

If your trade-in has a lien and the dealer agrees to pay it off, they are responsible for clearing it completely and right away. Always follow up with your lender to confirm the lien has been paid. 

Be sure to contact the dealer if the lien has not been cleared. If it still isn’t resolved, reach out to OMVIC’s Complaints & Inquiries Department for help. 

Need Help? OMVIC Is Here for You

Before you buy or lease a vehicle, give OMVIC a call. Our experts can help you understand your rights, review your options, and answer any questions. If something doesn’t feel right or you’re unsure about a dealer’s practices, don’t wait, contact us first. Call us at 1-800-943-6002 for additional information or visit OMVIC.ca to access resources that can help you navigate the cat-buying process.  

Your rights matter, let OMVIC help protect them.