New car guide: buying, leasing and insurance

There are several things to consider when getting ready to buy or lease a new car. That’s often the first question: Should I buy, or should I lease? Read through this step-by-step approach to new cars. It’ll help you streamline the process and make car shopping enjoyable.

The pros and cons of buying vs. leasing

Let’s start with leasing. When, why and who does it make sense for?

The two biggest perks of leasing are:

  1. Lower monthly payments
  2. The ability to get a new car more frequently

Leasing makes sense and is a great option for those on a tighter budget. When you lease, you only pay for the amount the car will depreciate over the period of your lease.

What you forfeit when you lease is equity. Similar to paying rent for an apartment, when the contract is up, you walk away with nothing. You don’t have a car you can continue to drive or anything to sell to recoup the money you’ve invested.

If you have a budget that allows you to purchase a car, it’s typically a better financial decision. The downside is higher monthly payments, if you choose to finance the car.

Deciding to buy a new car? Do your homework

Financial experts often say buying a car that’s one or two years old is ideal. Cars depreciate quickly when they’re new, but that flattens out over time.

Step 1: What are you looking for?
Narrow down your choices. What kind of vehicle does your family need, and what fits in your budget? Create a shortlist.

Step 2: Make comparisons
What are the benefits of each model? Compare their features, safety ratings, and consumer reviews and reports. Look for reputable resources like Motortrend Canada, JD Power and the Insurance Institute for Highway Safety. There are also reports detailing which vehicles will have the lowest insurance premiums.

Step 3: Go for a test drive
This is the only way to truly know if a vehicle is right for you and your family. Do a walk around inspection of each car, adjust the settings in the driver’s seat and use a predetermined route with similar road conditions for each car. Test drives typically last 20 – 30 minutes.

Step 4: Negotiate your price
Some people love negotiating, some despise it, and many of us have no experience at all. The most important things to know are the manufacturer's suggested retail price (M.S.R.P.) and the dealer invoice price. They represent the basic range of your negotiating window; M.S.R.P being the high and dealer invoice price being the low. Sites like and can help you find the right price. You can also research potential factory rebates that haven’t been advertised.

Step 5: Buy your new car
Once you’ve settled on a price, you’ll need to decide on your initial down payment and what your monthly payments will be if you’re financing the balance. Online tools like this calculator from Auto Trader let you test to see what financing plan works best.

Don’t drive away without auto insurance

Your dealer’s insurance doesn’t cover your new car once you complete the purchase. Dealerships require you to have your own insurance before you leave their lot, especially if you’re leasing or financing the vehicle. To ensure you have coverage for physical damages from an accident, contact us before you drive your new car off the lot. Driving without insurance can lead to heavy fines. It can also affect your ability to get insurance in the future.

It’s important to make sure you have the right coverage. For example, you can get extra protection by adding our limited waiver of depreciation. This coverage protects against the loss of depreciation of a new car if, as the result of an accident, your car is beyond repair and must be replaced.

Also, remember that you can’t transfer your insurance from your old vehicle to your new vehicle by simply switching the licence plate.

Get The Co-operators mobile app free through App Store and Google Play. It’s a quick and secure way to access and manage your information, including your auto liability slip.