Guide To Buying a Used Vehicle

Here are the steps to follow when buying a used vehicle to avoid getting a lemon (click on each one for a more detailed explanation):

1. Visually inspect the vehicle

Do a visual inspection of the vehicle to determine its overall condition. Do your inspection in daylight so that you can see it more clearly. Flood lights will make the vehicle look shiny and can hide defects that show up in the sunlight.

Body:
Check all of the panels and roof for any scratches, dents, blistered paint, or signs of rust. Make sure to look in the wheel wells, the panels under the doors and the bottoms of the doors as well. Make sure that the paint colour is the same on all of the body panels. Mismatched paint means it was probably in an accident and was repaired.

Doors:
Lift up on each door gently to see if they are loose and check the rubber seals around the doors for signs of rotting or tearing.

Tires:
Check to make sure that all 4 tires match. If you notice different brands, ask why they were replaced. Check the tread to see that there is even wear across the width. If the vehicle has less than 30,000 kms on it then it should probably still have its original tires on it. If not, ask why they were replaced. Look for signs of bulges, cracks, or scuffs on the sidewalls of the tires and for any dents or cracks on the actual wheels.

Check out the tires

Normal Signs of Wear and Tear:
If the brake pedals are worn and the steering wheel is tattered but the odometer only reads 60,000 km, then you should start to get suspicious. The odometer might have been rolled back.

Interior:
When you open the door be aware of any odours. If it smells moldy, musty, or mildewy than that could be a sign of a water leak. Look under the floor mats to check out the carpet beneath for signs of wear.

Seats:
Try out all of the seats, testing out the adjustments to make sure that they work and look for signs of excessive wear or any rips in the upholstery.

Suspension:
Push down on each corner to see if it just rebounds once. If it bounces up and down, then it could need new shock absorbers.

Lights: |
Turn on the lights (headlights, signal lights, interior lights) and have a friend check to see that they are all working

Make sure all the lights are working

2. Take the vehicle for a test drive

If you are buying from a private seller then they may not want you to take it for a test drive or they may want to go with you. During the test drive you should:

Test out the brakes to see if they work well or if they are soft.
Park on a slope and see if the parking brake works.
Take notice how the suspension reacts when you go over a bump or a speed bump.
Pay attention to how the steering reacts. Is there a vibration when you are turning corners? Doe the steering weel shake or rattle at different speeds. Does it pull to one side?
Listen for any strange noises and how loud the engine is.

If you are taking an electric vehicle for a test drive, make sure it is fully charged so you can check its projected range. If it is a hybrid, check the display to make sure that the battery is charging and discharging while you are driving.

3. Check the vehicle's history and service records

It is a good idea to use a website such as CARFAX to get a record of the used vehicle's history and it maintenance reports. CARFAX will provide you with a comprehensive vehicle history report put together from sources such as:

Insurance companies
Dealerships
Service shops
Police records

A CARFAX service report will let you know whether or not the previous owner took good care of the car and it will help you determine whether the price they are asking is fair. The service report will show you information like:

How often the vehicle was serviced
The odometer readings at the time of each service
When the vehicle had oil and filter changes
When any alignment checks were performed
When electrical filter checks were done

Seeing the service record will help you uncover possible problems with the vehicle and you can ask the seller about any service gaps. It will also help you determine whether there is more wear and tear on the vehicle that what the report shows. It will also include information about things like:

A CARFAX report will cost somewhere between $40 and $50.

The above video will talk about how you can check for signs that the odometer has been rolled back

4. Make sure the seller is the legally registered owner

The registered owner and the legal owner of the vehicle are not always the same individual. The legal owner is the only one who is allowed to sell or dispose of a vehicle.

You can tell who the legal owner is by looking at the vehicle's registration card. The legal owner's name is the one that appears on the right side of the registration card and the registered owner's name appears on the left side.

5. Make sure the VIN on the vehicle matches the one on the owner’s permit

VIN stands for vehicle identification number and it is the identifying code for a specific vehicle. Every automobile has its own unique ViN number.

Most cars have their VIN number stamped on the front of the dashboard on the driver's side. You can see this number by standing outside of your vehicle and looking through the windshield. The VIN could also be located on the driver's side door pillar. Just open the driver's door and look in the area where the door latches to the vehicle.

This video will show you where to look for the VIN number on a vehicle

6. Get it checked out by a mechanic you can trust

Take your vehicle history and service report to a licensed mechanic you trust to check it out for you. If you don't already have a mechanic you can trust, here are some steps that you can take to find one that is close to you.

1. Ask Your Family and Friends

The best place to find out about a reputable mechanic is from your friends or family members, the people you trust. Find out who has had good experiences with mechanics and follow their recommendations.

2. Check Out Google Reviews

If you don't have anyone you can ask, go online to check out the Google reviews for the mechanics you are considering. This will help you see what other customers think about them and it will give you a good idea about any possible issues you should be aware of.

3. Find Out Who Services The Big Businesses

Taxis, government vehicles, and company cars all need servicing and you can be sure that these bigger organizations have done their homework in finding a good mechanic to service their vehicles. They all need dependable vehicles and can't afford to have them breaking down.

Ask a local taxi company what auto repair shop they use

4. Ask Questions

Her is a list of questions that you can ask your potential mechanic:

How long you have been in business?
How many years of experience do you have?
What warranties or guarantees do you offer?
What certifications do you have?
What types of parts do you use?
What vehicles do you specialize in?
Do you charge for estimates do you guarantee them?
Do you have a free shuttle or courtesy car service?
What are your labour rates and do they differ depending on the type of job?

5. Take A Look Around The Shop

Is it full of happy, satisfied customers and smiling mechanics? Are the working areas clean? This can be a sure sign of the quality of the work done.

6. Do An Honesty Test

Take your vehicle in when there is nothing wrong with it and see if they come up with a list of repairs that need to be done immediately.

7. Start With Something Small

Take your vehicle in for a something small like an oil change or a tire change. If you are happy with the service, you can try them out on something larger and trust their opinion when you are purchasing a used vehicle.

Find a mechanic you can trust to take a look at the used vehicle

7. Make sure you get a Used Vehicle Information Package

The seller of the vehicle is required by law to provide you with a used vehicle information package.

This package will give you important information such as:

Important details about the vehicle like the year, make, model, colour, body type, cylinders and power
The registration history of the vehicle in Ontario. This will include the names of all present and previous owners, their city of residence and odometer reading
Information about the vehicle currently attached to that plate number
Vehicle lien information
The average wholesale value of the vehicle. This is the minimum value on which Retail Sales Tax (RST) will apply
Retail Sales Tax (RST) information
Whether it has been completely dismantled or crushed
The bill of sale section

Source: Ontario.ca

The Used Vehicle Information package will also contain information about the condition of the vehicle such as whether it is mechanically unfit and hasn't received a Safety Standards Certificate.

The seller must give you a used vehicle information package

Safety Standards Inspection Certificate:

You need to get a safety standard inspection certificate if you are transferring a used vehicle to a new owner, unless the new owner is your spouse. To see a description of all the parts of the vehicle that are inspected during the safety, click here. A vehicle needs this certificate in order to be licensed.

Make sure to check the lien/debt information in your package. This will tell you if there is a debt or money that is still owing on the vehicle. If there is a lien still on the vehicle, make sure that the owner pays that debt before you buy it otherwise you will be responsible for paying it or the claimant has a right to the car.

You can contact the Ministry of Government and Consumer Services, Personal Property Security Branch, for more information:

Toronto area: 416-325-8847
Toll-free: 1-800-267-8847
TTY: 416-326-8866 (for speech/hearing impaired).

The vehicle needs to have a safety inspection

8. Documents to Get from the Seller

When you are buying a used vehicle make sure you get the following documents from the seller:

The vehicle portion of the owner’s permit (registration): The seller needs to fill out the and sign the the Application for Transfer section that is located on the reverse sid of the vehicle portion of the owner's permit. The seller will fill in your name and address as well as the mileage and date of sale. The seller needs to keep the "plate portion" of the registration.

The Used Vehicle Information Package: Make sure the seller gives you the used vehicle information package and check to see that it includes all the documentation we listed above. link to section above

The Bill of Sale: Check to see that the bill of sale has been signed and dated by both you, the buyer, and by the seller. It also needs to include:

Vehicle identification number (VIN)
Make and year of the vehicle
The power source for motor vehicles (gas, diesel, electric)
Body type, colour and model (if available)
Your name and address as the buyer of the vehicle
Name, address and signature of the current owner/dealer or the leasing company (seller)
Sale or purchase date
Purchase price including taxes collected and HST/GST number if applicable*

*Some exemptions may apply. For example, if you are transferring a vehicle to a family member as a family gift, then they don't have to pay the retail sales tax on the transfer. They will, however, have to provide the Sworn Statement for a Family Gift of a Used Motor vehicle in the Province of Ontario. This form is available online at ServiceOntario.ca or in person at your nearest ServiceOntario centre.

If you give your car to a family member, you don’t have to pay sales tax

The bill of sale must be an original document. It can be pre-printed or handwritten. It can also be a pre-printed bill of sale with a handwritten HST/GST number.

If the bill of sale is completed by a company or a dealership, it needs to be printed on the company’s or dealership’s letterhead

You can have a photocopy or facsimile of the bill of sale if either:

The original bill of sale is viewed and photocopied at a ServiceOntario centre
The original bill of sale and the photocopy are viewed at the ServiceOntario centre
The facsimile is sent directly from the seller to the ServiceOntario centre

No other photocopy or facsimile versions of the bill of sale are acceptable.

9. Used Car Tax Rate in Ontario

Regardless of whether you purchase your used vehicle from a dealership or privately, you will have to pay tax on it. The only exceptions to this are as follows:

If you are transferring your vehicle to a close family member as a gift
You are a qualified diplomat or
You have indiginous status that qualifies you for tax expemption

In Ontario, you will have to pay 13% HST on the vehicle's purchase price or the vehicle's wholesale value, whichever is more. The Ontario Ministry of Finance determines a vehicle's wholesale value based on the Canadian Red Book.

Even if you pay less for your vehicle than what the Red Book values it at, you will still have to pay tax on the Red Book value. You do, however, have the option of getting the vehicle appraised. If your appraisal is lower than the Red Book value, you will pay tax on the whichever amount was higher: what you paid or the appraisal value.

Sources: