How to Buy a Used Car | Tips & Checklist | Finder Canada

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What to consider when buying a used car

Before you buy that used car you've got your eye on, make sure you're prepared.

In 2020, it cost $19,888 on average to buy a used vehicle. Every year the cost of getting and maintaining a used car is rising. In addition to this, buying a used car can be risky when you don’t know for sure how well the previous owner cared for it and when you may not have any leftover coverage under the manufacturer’s original new car warranty.

However experienced you are with purchasing vehicles, it never hurts to have a checklist when you start shopping for a used car. Before you test drive cars or looking at your financing options, read our handy guide so that you know what to keep in mind at each stage of the buying process.

6 tips for buying a used car

  1. Start with a budget. Knowing how much you’re able to afford upfront or on monthly repayments can help you narrow down your search for a car.
  2. Research models and makes. Look online to compare makes and models and narrow it down to a few choices that suit your needs.
  3. Consider maintenance costs. Used cars might require more repairs than old cars — and typically aren’t covered by a warranty. However, if you get a used car that’s only a few years old, it may still be covered by some of the new car warranty.
  4. Get a VIN check. Checking a vehicle identification number (VIN) can tell you if the car’s been stolen, in an accident, if someone still owes money on it and more. Companies like CARFAX and AutoCheck.com (for used cars sold in the U.S.) can help you with this.
  5. Have a mechanic look at the car. The only way to make sure that your car is in good shape is to have an expert check it out.
  6. Don’t be afraid to negotiate. The price of a used car typically has more wiggle room than a new car. Get an idea of the car’s resale value to make an informed argument for a lower price.

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11 questions to ask before buying a used car

1. Do you currently have the title?

When you buy from a dealership, it should be able to show you the title in the dealership’s name. But if you buy from a private seller, make sure they have a physical copy of the title and that it’s in their name. The title could still be in the lender’s name if they haven’t fully paid off their car loan.

If this is the case, ask about when they plan on paying it off. Otherwise, you won’t be able to legally buy the car. If the seller is unable or unwilling to provide proof of title, go somewhere else.

2. How has this car been maintained?

This question is especially critical for older cars, but every used car has a maintenance history you should be aware of. Ask if it was serviced by a dealership or an independent mechanic, and make sure maintenance is up to date — the owner’s manual should have a schedule. If you have any questions the seller is unable to answer, ask to speak with the mechanic who most recently serviced the car.

3. Are there any service records available?

Ask if the dealership or seller has service records for you to browse. Not only does this show that the car has been serviced and maintained — critical for the longevity of any vehicle — but you’ll also be able to note if there have been any mechanical issues in the past.

However, it’s not necessarily a deal breaker if the car doesn’t have a detailed service history available. After all, a dealership may not have received these upon purchasing the vehicle, and a private seller may not have kept detailed records even if they did regularly service their car.

4. What is this car’s accident history?

Similar to service records, you’ll want to ask for a vehicle history report. This should list any accidents the vehicle has been in and any repairs that have been made. But don’t stop there. Not every minor ding and scrape winds up on a vehicle history report. Ask the owner about any minor accidents the car may have been involved in that weren’t reported — even something as small as backing into a mailbox.

5. What is the ownership history?

Ownership history can vary widely between vehicles, but a good rule of thumb is that you want to find a car where the owner maintained it for several years before selling it. A long ownership history is preferable — it indicates the car has lasted and that there are likely no major mechanical problems that may be hidden. If the car has changed hands multiple times, you may want to reconsider buying it.

6. Is it still under warranty?

If you’re picking up a newer used car, ask the seller if it’s still under warranty. Some manufacturers will allow you to transfer a warranty to a new owner. And if you’re buying a Certified Pre-owned (CPO) car, it will likely come with its own warranty. You should also ask about any recalls the model may have had in the past.

7. Are there any features that don’t work?

It may not be the thing that stops you from buying a car, but you should still be aware of any broken or defective features. Things like a media player that doesn’t work, a blown speaker or a faulty AC system can all impact your driving experience.

8. Will I be able to take a test-drive?

If the seller is unwilling to let you test-drive the car, don’t buy it. The test-drive is one of the most critical components of buying any car, so you’ll want to be thorough when you take it for a spin.

Take note of the car’s performance, any components that don’t seem to be working properly and how you feel driving it. Starting the drive with a checklist of items you want to test is an easy way to stay on track — and potentially add more questions before you buy the car.

9. Can I have the car checked by a mechanic?

It can be a red flag if a private seller or dealership isn’t willing to let you get the car inspected by your own mechanic. This is true even for a dealership that has its own in-house mechanic. Ask if you can bring a mechanic to look at the car, visit a local auto repair shop as part of your test-drive or use a mobile inspection service. If you’re unable to get the car looked over before you buy it, you might want to find a more flexible seller.

10. Why are you selling this car?

This question is best for private sales. Some owners may have the answer ready — and it may be something along the lines of wanting to upgrade — but you should still go with your gut. If the story seems fake or too complex, consider the seller’s answers to the other questions on this page before you buy.

11. Why did you choose this price?

Finally, ask why the seller chose a certain price for the car. Did they do their research using the Canadian Black Book or the Kelley Blue Book? If it’s below market value, is there a reason? If it’s above market value, does it have any special features or add-ons? Do your due diligence and check with pricing guides yourself — it can mean the difference between getting a fair deal during negotiations and getting stuck with a used car that doesn’t hold its value.

Where can I find a used car?

You have options when looking for a used car.

  • Online dealerships. Sites that focus primarily on selling used cars often post photos and car history information for you to browse from home. You can find both licensed dealers and private sellers on these sites, meaning you have your pick of cars at prices you can afford.
  • Trading forums. There are forums where people sell their cars and where you could find a bargain. However, a private sale can be risky because you don’t know the seller, and the car’s history may not be fully reported.
  • Classifieds. There are dedicated websites like Kijiji Autos and eBay Motors where you can find a used car for sale in your area. But since you’re dealing with a private seller, you need to be careful and inspect vehicles before purchasing. Autotrader.ca is also a widely-used platform for both both private and licensed sellers to advertise vehicles for sale and is good place to look for current prices on the car(s) you’re interested in.
  • Used car dealerships. If you want a large selection of used cars, there’s likely a used car dealership or two in your area. At a dealership, your seller will be licensed and the car is often sold with a warranty. Ask people you know who drive used cars what dealerships they’d recommend working with. This is a good option for people who don’t want to risk a private sale.

How can I finance a used car?

If you’re looking to finance your purchase, you have a few options available to you.

  • Secured loan. A secured loan requires you to use your car as security, but in return they generally have lower interest rates. But beware — some lenders won’t offer secured loans for cars are more than 10 years old and have more than a certain number of kilometres on them. Lenders’ policies in Canada may vary, but in the United States, many experts recommend avoiding a used car with more than 100,000 miles on it (roughly 160,000 km) if you want financing.
  • Unsecured loan. An unsecured personal loan won’t require collateral, but you may find that the interest rates are higher because it’s more of a risk for the lender.
  • Dealer financing. If you’re buying a car from a dealership, then they may be able to offer you a financing option.

Compare your used car loans

Name Product Min. Loan Amount Interest Rate Loan Term Min. Credit Score Requirements
Car Loans Canada
$7,500
3.99% to 29.95%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Search thousands of vehicles online, including $0 down options, from dealers across the country and get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
CarsFast Car Loans
$500
4.90% to 29.90%
12-96 months
300
Min. income of $1,800 /month, 3+ months employed
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Loans Canada Car Loans
$500
0% to 29.99%
3-96 months
300
Min. income of $1,800 /month, 3+ months employed
Get access to financing from multiple lenders across Canada through a single application with Loans Canada. Bad credit, CERB and EI borrowers are considered.
Canadian Auto News
$7,500
4.49% to 29.90%
12-84 months
300
Min. income of $2,000 /month, 3+ months employed
Answer a few simple questions to get matched with affordable financing options. Auto loans are also available to those with bad credit, consumer proposals and bankruptcies to help rebuild credit.
Canada Auto Finance
$500
4.90%-29.95%
3-96 months
300
Min. income of $1,500 /month, 3+ months employed
Canada Auto Finance is a broker that connects borrowers with partnered local lenders. Financing for a new or used car is available for borrowers with bad credit, no credit, CERB, EI or bankruptcy.
Carloans411 Car Loans
$500
1.90% to 19.99%
Up to 72 months
300
Min. income of $1,600 /month, 3+ months employed
Get connected with suitable lenders through CarLoans411. Finance your next car, van or truck with loans available in amounts from $500 to $50,000. Check eligibility for this loan through LoanConnect.
LoanConnect Car Loans
$500
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Fairstone Secured Personal Loan
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What to know about buying a used car

Since used cars have been owned by at least one person, the condition of the car should be a top concern. Some cars can look almost new, while others can look like they’re on their last wheel.

For many, a used car is the best option for their budget. The previous owner has taken the greatest of the car’s depreciation, so the money you pay for the used car will be closer to the car’s actual value. Of course, there are risks that come with buying a used car.

A problem may not be immediately obvious. And since used cars often don’t come with a warranty, the manufacturer likely won’t cover the cost of the repair.

Before you buy a used car, research the make, model and year of the vehicles you’re interest in and know what types of questions to ask. Don’t hesitate to ask a licensed mechanic or car expert for their assessment of any vehicle you’re interested in getting. Also find out whether the manufacturer offers an extended warranty option that you can purchase to stretch the the new car warranty out a little while longer.

How to start a search for a used car

  • Don’t go for your first pick. It can be tempting to buy the first car you like. But be cautious — a car is a large ongoing expense, and it’s important to consider every option before you make your final purchase.
  • Research online and in person. As you start browsing your car options, do your research. Look online, in newspapers and visit a few used car dealerships. Test driving can make a huge difference in your decision.
  • Understand the market. Knowing the current prices makes it easier to know if you’re getting a good deal. Resources like the Canadian Black Book can help you valuate used cars that have caught your eye. It can also help you assess your own vehicle’s worth for trade-in purposes.

The used car buying checklist

You don’t want to drive off the lot with a used car that’s going to cost you money to repair. Always have a professional mechanic do a full inspection of your car before you sign any loan or purchase agreements, and when you’re looking for problems, keep these points in mind:

  • Everything sounds right on your test drive.
  • The brakes and car controls function well.
  • There’s no sign of damage.
  • The upholstery is in good condition.

You’ll also want to make sure the seller has these documents handy:

  • Transfer of ownership paperwork
  • Registration papers
  • VIN numbers and car history report

Compare used car loans

Bottom line

All of the factors that you have to consider when buying a used car can seem overwhelming, but putting in effort to learn what to look for before jumping into buying a vehicle can save you a ton of money and effort in the long run. Be prepared to do plenty of research on the specific make and model you’re interested in and educate yourself on how to negotiate so you can make an informed decision. Click here to compare used car loans so you can get driving faster.

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