Personal Finance Tips

5 Things To Consider When Purchasing A Car

Let me be the first (well not really) to say it: cars are convenient! You can get to your destination with more ease! If you’re like me, you’ll also enjoy having alone time while listening to your favorite tracks or podcasts (it’s therapeutic if you ask me)

Having a vehicle makes it easier to bring groceries home, you get to stay warm on those wild winter or rainy days, you can have road trips, the list goes on (I’d make an amazing salesperson – NOT haha!).

While driving can make your travels easier, keep in mind that convenience comes with a cost – a hefty one. 

Car Story

I’ve shared this before in my debt-free post, but I leased a brand new car years ago. I managed to get something new that is deemed to be on the cheaper end where cars are concerned. The vehicle I leased was $23 000 CAD. I made a downpayment for the car and then paid around $200 per month for 4 years (that’s because of the downpayment I made).

Why Would You Lease A Car?!

I’ve gone through numerous ads and visited used car dealerships, but I really couldn’t find anything that was worth the price and that had decent features (I admit I’m picky lol). I wasn’t looking for a luxurious car, just something that could get me from point A to point B without causing me problems when I just bought it.

After coming up with nothing, I went to name-brand dealerships (Toyota, Mazda, Chevrolet, etc.) to see what I can find. I visited 5 or 6 dealerships that day and ended up finding my current car. $23 000 was the cheapest I could get amongst all the cars I’ve checked out. I ended up taking the car in the showroom because that was the only one they would offer for that price. I did ask for another color however the price difference was significant so showroom car it was! (it was simple and cheaper after all). I didn’t know that picking another common color could change the price tag. I assumed that was only applicable to the eccentric colors but I guess not!

Realistically, I couldn’t afford a new car. It’s because I lived at home while in school and had no household expenses which technically made it “affordable” to me. That’s why I made sure I got a vehicle that I could cover on my own.

Note: I went car shopping with my parents given that I knew little about cars at the time. Going alone was risky since it was easier to be swindled by a salesperson. 

Are You Keeping The Car Or Getting A New One?

Initially, I didn’t know if I wanted to keep the car I purchased. That’s why the idea of leasing wasn’t so terrible because I could give it back at the end of the term if I didn’t want it anymore (FYI canceling your lease will cost you big time!)

When my lease was coming to an end, I was given 3 options:

  1. End the lease and get another car
  2. Buyout the car (either outright or finance-to-own)
  3. Become a pedestrian (aka give back the car and that’s it)

I wasn’t opposed to option #3 because my costs would be lower, but I had to be honest with myself: for starters, everything I do is far from home thus my transit commute would be at least 2-3 hours one way. Secondly, I got used to driving. That was a luxury that I didn’t want to forfeit which is why I went with option #2. I didn’t even contemplate getting a new car by the end of my lease. I didn’t experience any issues with the car during my term so it was a no brainer for me to keep it. Plus in the 4 years that have gone by, the cost for a vehicle went UP! The cheapest one there was now $35 000 CAD. No thanks!!

If you cannot buy the car outright at the end of the term, you need to finance the car. I couldn’t afford the hefty price tag ($11,779.03 left to pay to be exact) so I went from leasing to financing. It was frustrating, to say the least. Not to mention all the interest, taxes and fees added to the buyout price. On top of that, it was required that I do a safety test on my vehicle before they allow financing which was an additional expense. I was sooooo over it! I chose the shortest financing term, which is 2 years and because I didn’t want a car note, I created a plan to get that car paid off ASAP. I paid it off in less than 6 months and now I have no car note – Ohhh happy day!

Note: whether you lease or finance, the dealership will run a credit check. Keep in mind that the interest rate you receive will be based on the results of the credit check. This can also influence whether or not you will get approved. 

Time For Tips!

Okay y’all, that was my car story in a nutshell. I wouldn’t advise anyone on what to buy but just know that it’s always best to go with what you can afford. Given that circumstances vary, here are a few tips to consider if you are shopping for a vehicle :

Please note that it’s only the financial aspects that I am mentioning. Other factors such as condition, mileage, etc. are not aspects I’m well versed on. I would strongly advise you to visit dealerships and sellers with someone knowledgeable about cars!

1. Think About It, Do You NEED A Car?

Yes, there are many perks to driving there’s no doubt about it. However, have you taken a look at your situation? Do you need a car? Don’t purchase one “just because”. Make sure the decision to purchase is beneficial to you before you make a grand investment. Remember, convenience is great, but it comes at a price.

I lived at home during university to save on housing costs, but commuting was taking a toll on me. The school I went to had a campus that isn’t that accessible for those who live outside of Toronto. On a good day, my one-way commute was 2 hours, but on bad weather days or traffic delays, it could easily go over 3 hours. I didn’t work near home either. I held on to this long commuting routine for 3 years before I grew tired of it. I needed a car. I was willing to cut any expenses and live minimally to make it happen.

 There’s no “that’s a good reason” or “that’s a bad reason” (exception: to show off/look cool is a bad reason; sorry) for getting a car. All I will say once more is to evaluate your circumstances. This isn’t a $50 bike you’re getting.

2. Figure Out How Much You Can Afford

I saved about $5000 in 3 years while I was commuting by bus. I was still a university student with other expenses so I found that pretty impressive lol. Although, I’ll admit that I did not give my budget much thought until I started researching all the associated costs of a car. I don’t know why I assumed I could get something super great and close to new with that much (a girl could dream right?)

 Needless to say, if you want to buy a used car for $5000, save more than that. If you can, go for $6000 (so you have $1000 in savings for it), higher even. You need to factor in the costs for license plates and the license plate stickers (can you believe a sticker the size of my thumbnail costs $120 PER YEAR!?!? Madness!!). You also need to factor in gas plus insurance and let me tell you something, those two elements vary greatly (another heap of madness if you’re in the Greater Toronto Area).

Now if you’re going the lease route, my experience was that the downpayment amount was optional (had to put something at least). I put down the $5000 I saved and as a result, my monthly payments were $200. While the downpayment amount was optional, I had no choice but to pay for the registration and license plate fees. I just included everything in the amount I put down instead of paying more. 

All of these fees for one car… I was astonished.

3. Browse Online Before You Shop IRL

This ties into my previous tip. To get a better idea of how much you can afford, hop online and browse for cars. Also, look at the reviews for different brands and models. The last thing you want is to get a car that is known for having problems!

This also helps for when you visit the dealership. If you have any questions about what you’ve seen online, you can have it all written down for someone to answer.

4. Do Car Insurance Quotes Online!

Many companies provide free car insurance quotes. If you have an idea of what car you want to get, I’d suggest you do a quick quote online. That way you get an understanding based on how much your monthly insurance payments will be. Keep in mind that insurance varies based on the vehicle, your driving history, licensing level, location, age, gender, etc. Don’t get me started on how ridiculous car insurance is in some parts of the Greater Toronto Area! (again madness!)

My insurance was higher when I first started driving versus now. Factors that contributed to the decrease in payments are the kind of coverage I choose, having a good driving record, getting my full license (if you’re not from my ends lol, it goes from G1 > G2 > G. G is full licensing).

Another factor that decreased my premiums (annual fee for insurance – all months combined) was the fact that I went from leasing to financing. To be honest it was a fluke. I called the insurance company because I had questions and when I casually mentioned that I got my G license, the clerk said: “oh we can recalculate your premiums!”. I am certainly not the one to contest a discount so hey! I tried to see if my premiums would decrease now that my car is paid off and I was told that it isn’t a factor (ugh sad)

Car insurance can seem daunting, but look at how much it will cost you monthly. Unfortunately, if you’re in the Greater Toronto Area, it’s not uncommon to pay ridiculous fees for car insurance. The highest I’ve paid was in the mid $300 (had a G2 then and just started driving). I thought that was expensive until I met people who have to pay $500-$600, even more for insurance. Not sure what’s going on in the insurance realm; all I can say is do your research and get good coverage!

5. Fuel Efficiency

Here’s what I told every salesperson who asked me what kind of car I’m looking for:

“I want the cheapest car that can get me from point A to point B and that’s fuel-efficient!”

Why? Because for starters I was a university student. If I could barely pay for my degree without a loan, there’s no way I could afford a car that costs more than my education. Also, if I’m going to be driving everywhere, I need something that requires less gas (therefore less money) to go the distance. 

Now I did not understand what this whole “km per L, cylinder, horsepower” talk meant until it was broken down to me lol. Either way, the car I got would last a little over a week before I need to refill. I drove almost every day so that was great. On top of that, I wasn’t paying more than $50 for gas. Efficiency for the win! Don’t get a gas guzzler!


That’s all the advice I have for today folks! I’m not trying to scare anyone, but you need to look at the big picture. Cars aren’t cheap. No matter what price you bought it at, it will still cost you somehow. Again, I am not advising anyone on which car to purchase and what condition to get it in. The tips I shared was for you to be more informed on the underlying costs! However, please live within your means. Your financial and mental health will thank you for that! It’s way less stress investing in something you can afford and can budget for. 

If you have a car and have any other money-saving tips, please feel free to add them in the comments below! Let’s help those looking for a car to be more informed and save as much as possible!

All the best,


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