How To Buy Used Cars In Canada - Practical Tips And A Step By Step Guide
Buying used cars in Canada has its advantages and disadvantages. The advantage is that you could get everything you are looking for in a car for a low price.
And the disadvantage is that you could end up with a clunker that breaks the moment you sign the registration transfer if you are not careful. You should know where to buy, what car you are buying, what questions to ask and how to inspect the car.
Ideally, you want a car that you can afford, a car that suits your needs, and a car that will not break for a long period of time (they all will, eventually!).
Decide what type of car you want
When shopping for used cars in Canada, you should take into consideration what is important to you. Do some research - ask people around, read car reviews.
You should take into account the size of your family, fuel economy data, the price to fix the car if it breaks, the car insurance for this particular car make.
Mileage is important, but you should also consider how the car was maintained. You could come across a car with low mileage but poor maintenance, and vice versa.
It is also important to consider the residual, or resale value of the car if you consider selling it later. Some cars depreciate faster than others.
How to find used cars in Canada
You have two options - you can buy a car from a dealer or from an owner. The easiest way to find a car is online.
Check local classifieds - Kijiji or Craigslist, for example. Both dealers and owners post their ads on multiple websites. Take your time and do some research - you don't want to make a rush decision.
Should I pay cash or use financing when buying used cars in Canada?
Financing can seem as an attractive option, especially if monthly payments are low. But you should really calculate the total amount you will have to pay - or you might end up paying double the car's value. And imagine if the car breaks in a couple of years, and you will still have to make your monthly payments even if you don't have it anymore?
- Inspect the car in the bright light
- Take the car for a test drive
- Ask for a Used Vehicle Information Package (owner) or a CarProof (dealership) and check if the car was suspended, unfit or wrecked
- Check there is no lien, or outstanding debt on the car
- Ask for a Safety Standards Certificate if you are buying the car as "fit"
- Ask about the car's accident history and get the accident summary information
- If dealing with an owner, bring a mechanic or take the vehicle to a mechanic
- Ask the seller for the vehicle permit with the completed Application for Transfer
- Check the vehicle permit and make sure the VIN on the permit matches the VIN on the car
- Ask for the Bill of Sale from the seller
- Bring the filled Application for Transfer into the Driver and Vehicle License Issuing Office in your city
- Pay fees and taxes
- Register the car in your name
- Pay the fees for plates and permit
- Present proof of insurance
Buying used cars in Canada from dealerships and owners
In Canada you can buy used cars either from a licensed dealership or from an owner. You should keep in mind that your best bet are cars that are 1-4 year old. Older than that will require more maintenance and service expenses.
Pros and Cons of Buying used cars in Canada from a dealership:
|Cooling off period (depending on province)||Yes||No|
|Provides clear title||Yes||No|
|Inspects and certifies a car||Yes||No|
How to Buy Used cars in Canada from dealerships
- Before you go to a dealership, have a clear idea what type of car you want, at what price range and whether for cash or financing
- Do not declare right away that you are paying cash - dealers really profit more if you use the financing option. If he asks you - just say you haven't decided yet. This might leave more room for negotiation, and you can get a better deal once the dealer agrees to your price.
- Ask the dealer to provide you with a CarProof report. It's a vehicle history report, read it thoroughly. Make sure the car is not stolen and there is no lien. You will also find out if the vehicle was involved in any accidents, and how serious. If the dealer is reluctant, there might be something not right about the car. Do not buy! (Note that dealerships do not need to provide Used Vehicle Information Package)
- If the CarProof report looks good, you might want to run an additional CarFax report too. CarProof and CarFax might have different data, but run together they will give you peace of mind.
- Research the market value of all used cars you are interested in. Dealers use the Canadian Black Book to determine the value of the car. The Canadian Red Book is for private sales, you can get a copy in a library or buy in a book store.
- Inspect the car yourself, or if you are not sure how, bring in a mechanic not associated with this dealership.
- Dealer may try to convince you to "upgrade" - buy a more expensive car, or a car with more features than you were looking for. It goes like this: "for an extra 10-50 dollars per month, you can have a 4-wheel drive, a V-6, or an Acura instead of Honda". Do not let emotions override your logic - think - do you REALLY need a 4-wheel drive?
- If still undecided, do not buy in a rush. The dealer might try to convince you that "this is the only car in this color", or "if you don't buy right now, it will be sold by tomorrow". Only buy if you are completely sure - do not let the smell of the car distract you!
- When you finally decided which car you want and everything looks good, follow these steps
Buying Used cars in Canada from owners
You should be aware that car owners do not offer you any warranty on used cars in Canada and you have no legal protection if something is wrong with the car. And you do not have a cooling off period. You are buying at your own risk, and have to be very cautious.
- You have to research the car history entirely, make sure it was not stolen and the title is clear. Ask the owner to provide you with a Used Vehicle Information Package - they are obliged to provide it.
- For your peace of mind, you can buy a CarProof report and a Carfax report. They do not replace the UVIP, however.
- Research the market value of the car. Use the Canadian Red Book.
- Before you come to see the car, ask if it was involved in any accidents and how serious. If the car was involved in an accident, it is not necessarily a sign that you shouldn't buy it, but you could use it to negotiate it's price. Remember also that it will be more difficult for you to resell it.
- Inspect the car in the bright light. If you don't know how, get a mechanic.
- Test-drive the car.
- When you finally decided which car you want and everything looks good, follow these steps for buying used cars.
Think of buying a new car instead?