Feb 25, 2020

Your Guide On Buying A Used Car In Ontario

Are you thinking about buying a used car in Ontario? They are a great option, however, many people shy away because they are not educated about the steps to buying a used car. They are worried they’ll buy a lemon or get suckered into a bad deal.

Getting some advice for buying a used car is a great first step. To help you out, we’ve put together this used car buying guide. It packed with great tips, advice and important considerations.

Why Should You Buy A Used Car?

How To Buy A Used Car In Ontario

We’ve all heard the saying before – the minute a new car is driven off the lot, it depreciates in value. Just how much does it depreciate? According to Edmunds.com, a new $30,000 vehicle depreciates just over $2,500 in the first minute!

Better make that first minute of driving worth it!

On average, a new car depreciates about 11% the moment it’s driven off the lot, and it continues to depreciate between 15%-25% each year. So for a $30,000 car here is how much depreciation will cost :

  1. Cost Of Depreciation After Year 1 : Depreciates about more than $5000 – your new $30,000 car is now only worth $25,000.
  2. Cost Of Depreciation After Year 5 : Depreciates by almost $18,000 – for a loss of about 60% of the car’s original value.

Makes you want to buy a used car, doesn’t it? Good news – we are going to give you all the information you need to buy a used car.

Is Buying A Used Car For You?

Let’s start by saying that buying used is not for everyone. Buying a used car is very different from buying new. There are a lot more considerations and even risks involved. However, there are also a number of advantages to buying used.

In fact, more people are buying used cars in Canada than you may realize. According to Driving.ca, there are more than 22 million used cars on the road today, they make up about 65% of the market and it’s on the rise, a reason why car dealerships are so eager to buy back your car after a lease.

There are many situations where buying a used car makes sense :

  • You’re on a limited budget.
  • You need a second car for your household.
  • You are buying your first car.
  • You are buying a car for your new teen driver.
  • You want to keep costs down and make a sound financial decision.
  • You don’t want to get tied up in a long term lease or financing agreement.

What Are The Best Tips For Buying A Used Car?

Follow These Steps When Buying A Used Car In Ontario

Buying a used car is a process. There are certain steps you need to take to make a good purchase decision. Here are important tips to follow when buying a used car :

  1. Establish a budget.
  2. Determine the type of vehicle you want to buy.
  3. Narrow your selection to a specific make and model.
  4. Check reviews about the vehicle.
  5. Identify potential sources of used cars.
  6. Compare pricing options against industry averages.
  7. Check the vehicle history.
  8. Contact the vehicle seller.
  9. Take the car for a test drive.
  10. Get the vehicle inspected by a licensed mechanic.
  11. Negotiate a fair price.
  12. Get car insurance coverage in place.
  13. Close the deal and transfer ownership of the vehicle.

What Are The Most Important Things To Look For When Buying A Used Car?

There are always some important things to check when buying a used car. Not sure what to look for? Here is what to check when buying a used car :

  • Kilometers : The average vehicle accumulates about 15,000 to 20,000 kilometres per year. Look for vehicles with average to low mileage.
  • Reputation : Is the make and model you are considering known for reliability? Do used model have a long lifespan? When do issues with these vehicles typically arise?
  • Age and condition : How old is the vehicle? Is it in good condition? Does it need any work? What repairs/updates have been completed?
  • Vehicle history : Check the VIN number of the car to see if it’s been in any accidents, if there are recalls, or if there are liens on it.
  • Reliable seller : Issues could arise when buying a used car. Check out the seller. Ask about a refund and warranty if buying from a dealer.

What Are The Best Used Cars To Buy?

Some used cars are more reliable than others. There are some makes and models to avoid and there are some regarded as the best cars to buy used. The best used car largely depends on your driving needs and how you plan to use the vehicle. There are some makes and models known to be better used cars.

According to Edmunds.com, here are some of the best used cars worth considering :

  • Used Sedans : Nissan Maxima, Mazda 3, Toyota Avalon
  • Used Hatchbacks : Scion iM, Volkswagen Golf, Hyundai Elantra GT
  • Used SUVs : Mazda CX-5, Ford Edge, Kia Sorento
  • Used Trucks : Chevy Colorado, GMC Canyon, Ford F-150
  • Used Hybrids : Toyota Prius, Chevrolet Volt, Hyundai Sonata Hybrid
  • Used Luxury Vehicles : BMW 3 Series Sedan, Hyundai Genesis, Audi A6

Are cost and insurance rates important to you? Be sure to check out the cheapest used cars to insure.

How To Buy A Used Car In Ontario

There are many different approaches to buying a used car. Once you have an idea of the type of vehicle you want, you need to research the cars history, test drive it, get financing in order, and negotiate with the seller.

How Do You Research A Used Car’s History In Ontario?

So, you have an idea of the type of car you want, now it’s time to spend some time researching the list of cars you are considering. The good news is there are countless resources today you can use to learn about the vehicle you are considering. Here are some to use :

  • Friends and family : If you know someone who has or has had the vehicle you are considering, ask them about the pros and cons. You might want to ask them if you can test drive their car.
  • Transport Canada : This will provide you with information about recalls and other news.
  • Consumer Reports : This is one of the best resources online to read reviews and reports on vehicles.
  • Autos.ca : Another great online resource to compare car models, read reports, reviews, and gather other information about vehicles.
  • Car Proof : If you are considering a specific vehicle, Car Proof offers a number of tools and resources to help you learn about a vehicle’s history.

What Should You Consider When Test Driving A Used Car?

Always test a vehicle you are considering, new or used. A test drive is more than just driving around the block and seeing if the car is comfortable to drive. It is an opportunity for you to inspect, assess, and test out the vehicle.

It’s always a good idea to bring someone else with you to provide you with a second opinion. Try to bring someone who knows cars. Here is what to consider during your test drive :

  • Desired car features : Beforehand, know the features that are important to you.
  • Take notes : Consider bringing a notebook to write notes about the vehicle.
  • Inspect : Do a thorough visual inspection of the car – interior and exterior.
  • Sit inside : Get in the car, assess your comfort level with the seats and ergonomics. Make note of the interior features, size, etc.
  • Test drive : Assess how the car feels. How does it drive – hit the brakes, accelerate, put it in park, drive in reverse.
  • Take your time : Don’t rush the process – give yourself enough time to properly assess how it feels to drive the car and how it runs.
  • Go to your mechanic : If possible – take the car to a mechanic to check under the hood.

How Do You Negotiate When Buying A Used Car?

If you’ve found a car you want to purchase, it’s time to negotiate. Rule number one is to always negotiate. The asking price is very seldom the firm final price. It’s called an asking price for a reason.

Here are some tips for negotiating :

  • Know the current market value of the vehicle : Use Kelly Blue Book, Auto Trader, and Canadian Black Book to get a good idea of how much you should pay.
  • Consider value for the price : There may be other things such as the inclusion of winter tires, low mileage, wear and tear that will factor into the price.
  • Know your budget : Know your budget and stick to it. But this doesn’t mean you have to tell the seller what your top dollar is during the negotiation.
  • Eliminate emotion : Negotiate based on logic and have confidence in your offer.
  • Don’t be afraid to counter-offer : Negotiations are about going back and forth, so don’t be afraid to counter any offer made by the seller.
  • Avoid making a rash decision : Always give yourself enough time to weigh your options and make a decision.
  • Be prepared to walk away : You have other options, and if the deal is not what you want, walk away. Never agree to a deal that makes you uncomfortable.

What Are The Financing Considerations When Buying A Used Car?

There are two main payment options when you buy used :

  • Pay in full
  • Finance

Keep in mind that financing a used vehicle will increase the overall cost of the vehicle as you will have to pay interest and other finance fees. If you plan to finance, shop around to find the best option. Consider the dealer, your credit union, or your bank to get the lowest financing rates.

What Questions Should You Ask The Seller About The Used Car?

Ontario used car buying guide

Gathering as much information as possible is the key to making a solid used car purchase. One of the best ways to do this is to ask the seller questions – lots of them!

Not sure what questions to ask? Here is a good start for what to ask when buying a used car :

  • Reason for selling : Why are you selling the car?
  • Accidents : Has the vehicle been in an accident?
  • Repairs or modifications : Has anything been repaired, replaced or modified on the car?
  • Owners : How many owners has the vehicle had?
  • Fuel efficiency : How is the gas mileage on the car?
  • Maintenance : Did the car have regular oil changes and maintenance?
  • Warranty : Is the vehicle still under the manufacturer’s warranty? If an issue exists, can it be fixed before the purchase?
  • Cash discounts : Will they consider a cash discount?
  • Certified pre-owned : If the car is certified pre-owned – ask to see a copy of the inspection report.
  • Trade-in : If you are buying from a dealer – are they willing to take a car as a trade-in?

Ask as many questions as you have. If the buyer gets annoyed, agitated, or is trying to close the deal quickly, it could be a sign they are hiding something. Remember, you can always walk away.

When Is The Best Time To Buy A Used Car?

There isn’t a single best time to buy a used car in Ontario. In general, there are certain times that are better than others. Here are some good times to buy :

  • At the end of the day, week, and month : Buying at the end of the day, week, or month can help you with negotiations. Sellers have a greater sense of urgency, opening the door for more concessions.

  • End of the quarter or fiscal year : Sellers will be more motivated to make sales targets. They want to shed inventory and are more willing to slash prices.

  • Buy toward the end of the year : Car sales are typically slower in fall to the end of the year. December is regarded as the slowest sales month, making it a great time to shop.

  • Major promotions : It can be worthwhile to hold out for dealers to offer have major promotional events. You’ll have greater flexibility and options and there is more incentive for the dealer to sell.

Where Are The Best Places To Shop For A Used Car In Ontario?

There are many places where you can shop for used cars. Today, the internet has become one of the most popular options to shop for a used car, but it’s not your only option. Auto dealerships, used car lots, newspaper ads, local auctions, and private sales are also options to consider.

Here are some of the best online sources where you can start your search for a new used car :

Becareful When Buying Used Cars Online

As with any other purchase you make online, you need to be careful about who you do business with. Watch out for unlicensed dealers, online scams, and sellers looking to take advantage of you. Here are some quick tips :

  • Seller : Always verify a seller’s credibility.
  • Verify VIN : Verify the VIN number of the vehicle and have it inspected.
  • Checkout car : Never buy a car sight unseen – always check it out in person.
  • Car information : Get as much information as possible about the vehicle<./li>
  • Don't pay in advance : Never pay before you get the vehicle.
  • Compare : Compare car pricing and options using multiple websites.
  • Too good to be true : If the deal seems too good to be true, then it probably is.

Remember, if something doesn’t seem right, then it’s probably not. The beauty of buying used is that even if you back away from a deal, there will always be another one.

Buying A Used Car In Ontario From A Dealer

Buying a used car from a dealership is a common option if the online route is not for you. Dealerships can offer a variety of vehicle options, but they are often limited in terms of make and model. One thing they can offer is assistance with financing.

Many dealers also offer warranty packages for used cars. But, like with any other type of business, it’s important to do your homework and check out ratings and reviews of the dealership you are considering.

How To Buy A Used Car From A Private Owner

Purchasing a used vehicle from a private owner is a little different. If you are interested in purchasing the car, ask to see the sellers used vehicle information package. Make sure you carefully review the vehicle history.

Test drive the vehicle and have it inspected by a mechanic. If you purchase the car, make sure you take the package with you. Get the vehicle permit and bill of sale. You will need the plate portion of the vehicle permit to complete the transfer of ownership.

Learn more about car ownership in Ontario.

What Is the Cost Of Buying A Used Car?

When you buy a used vehicle, it’s important to be aware of all costs involved in buying used, not just the purchase price. Additional cost considerations include :

  • Car insurance
  • Mechanic inspection fees
  • Financing charges
  • Dealership fees (if you purchase through a dealer)
  • Warranty and other add-ons

When purchasing a used car from a dealer, review your bill of sale carefully for additional or hidden fees when buying a used car – registration, title, dealer, license, advertising, emissions, and other fees.

Car Insurance Considerations When Buying Used Car In Ontario

Tips For Buying A Used Car

An often overlooked consideration when shopping for a used car is auto insurance. Once you have an idea of the vehicle(s) you are interested in purchasing, it’s always a good idea to get a car insurance quote.

Then you will have an idea about how much it will cost in insure the vehicle, especially if it’s a vehicle that is very different from the make or model you are used to driving.

Knowing how much it costs to insure a vehicle when exploring your options allows you to get a better sense of the total cost of driving (payment, insurance, gas) per month, something that can factor into your approach to negotiating.

How To Buy Insurance For A Used Car?

You can follow the same process to purchase insurance for a used vehicle. You can call your insurance broker or compare quotes online. As always, it’s best to shop around and compare your options for used car insurance coverage.

How Does Insurance Work When Buying A Used Car?

It’s advisable for you to speak with your broker and get car insurance in order before buying. You cannot drive your vehicle without insurance coverage in place. Most dealerships with require proof of insurance to complete the purchase.

What Are The Benefits Of Buying Used A Car?

Many people still have a distorted view of the used car buying process. They envision buying a beater that always breaks down and is riddled with mechanical issues. This is not the case today (in most instances).

Buying a car today is vastly different from when your parents bought used many moons ago. Here are the benefits of buying used :

  • Cost effectiveness : Purchase price is one of the main factors for people buying used. Many of us simply can’t afford to or don’t want to spend $30,000 on a vehicle. The average price of a used car in Canada is half of this, at about $13,000.
  • More options : Buying used opens up your options. You can buy vehicles from multiple dealers, different makes and models, and different years.
  • High quality used vehicles : There is no shortage of high quality, low kilometre cars to choose from, many of which are just returned after a lease.
  • You can get exactly what you want : When you shop for used, you can get exactly what you want. Whether you want a ’09 Honda Civic, ’05 Ford F-150, or ’12 Nissan Pathfinder, you can find one.
  • You can find a car within your budget : You can also shop based on budget. Whether you want to spend $5000, $15,000 or any number in between, you can find many great vehicles that will fit within your budget.
  • Better investment : Used cars don’t depreciate in value as quickly as new. You will retain more value, and you will be able to recoup more of your money if you decide to sell.

What Are The Disadvantages Of Buying A Used Car?

There are some potential drawbacks of purchasing a used car :

  • Reliability : Used cars can be less reliable than new vehicles.
  • Less current features : They may have less current vehicle feature options because of older model year.
  • You get a lemon : There is the potential you could get a lemon.
  • Higher loan interest rates : Typically higher interest rates when you finance a used vehicle.
  • Warranty : No warranty if purchasing from a private seller.

Ontario Used Car FAQs

Still have questions about how to buy a used car? Check out these common questions about buying used, insurance, ownership, costs, and more :

Do You Need Insurance Before You Buy A Used Car?

Yes. You will need to have valid insurance before you can drive. It’s recommended to get proof of insurance to complete your transaction.

How Do You Protect Myself When Buying A Used Car?

Get as much information about the vehicle as possible before buying used. Get a vehicle history report, get the car inspected by a licensed mechanic, ask the seller a lot of questions, test drive the vehicle, and make sure you follow all transfer of ownership rules.

Can You Buy Gap Insurance On A Used Car?

Yes. You can purchase gap insurance from car dealerships and through financing companies. Learn more about gap insurance.

Should You Buy A Used Car That Was A Rental?

Many recommend not buying used cars that were previously rental vehicles. Rental vehicles typically are driven harsh and have a lot of wear and tear.

Should You Buy A Used Car From A Dealership?

A dealership is one of the many sources where you can purchase a used car. Like anything else, there are good dealerships and poor dealerships. Be diligent and shop around to find the right used car.

Can You Buy A Warranty For A Used Car?

Yes, dealerships often offer you the option to purchase a warranty for your used vehicle.

How Much Is A Used Car Package In Ontario?

The used vehicle information package is $20. It can be purchased online through Service Ontario here.

What’s The Difference Between A Used Car Or A Certified Pre-Owned Car?

Certified pre owned vehicles tend to be more expensive because they go through a more detailed inspection process. An extended warranty is also often offered as well as incentives and financing options.

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