Here’s a handy guide of things to look for when buying a used car.
Carefully evaluating a used car’s history before buying is one of the most important steps you can take to protect yourself in a purchase. This is equally true whether you buy a used car from a dealership or from a private seller. If you go the dealership route, the staff there will do some of the legwork for you and can help you interpret what you’re seeing. But no matter how you’re buying, you should be aware of what to look for when buying a used car. It’s critical that you perform a full background check yourself before making a purchase as large and important as a vehicle.
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This article examines how to evaluate a vehicle’s history and what to look for when buying a used car. We’ll go over the tools you’ll need to perform a full analysis as well as key details to review before you agree to buy.
Most important: Get a vehicle history report
Many aspects of assessing a used vehicle’s history depend on having access to a vehicle history report. You should request a vehicle history report from the dealership or seller early in your communications. If the seller does not have a vehicle history report available, it’s important that you purchase one yourself.
If you live elsewhere in Canada, you’ll need to purchase a vehicle history report from a third party such as Carfax. You’ll need to pay for these reports, but this cost is minimal compared to buying a car that can’t be registered or taking on someone else’s debt.
You’ll likely need to pay extra to have vehicle lien information included in a history report. It’s worth the extra cost to have access to this information. You’ll find more about liens and why it’s important to look for them below.
Equally important: Book your own inspection
If you’re buying a Certified Pre-Owned vehicle (CPO) or you’re buying a used car from a dealership you trust, you can consider skipping this step. But no matter how many safety inspection reports or assurance you’re given by the seller, nothing replaces the peace of mind that comes from having the car you’re buying looked over by a mechanic you trust.
We recommend getting an independent inspection even if the seller already has inspection paperwork. You have no way of knowing how thorough or scrupulous the seller’s mechanic might be, and it’s important that you have the chance to get unbiased info and ask plenty of questions.
Completing the two key steps will give you most of the information you need to make a confident used vehicle purchase. Continue reading to learn how to apply the information you’ll gather in your research.
What to look for when buying a used car
Step 1: Verify that VIN matches on the car, the ownership paper, and the vehicle history report/UVIP
Step 2: Make sure the odometer reading on the car matches the paperwork, and consider whether it’s reasonable
An odometer reading can tell you a lot about a vehicle. For a start, if the odometer reading in the car is way off the number given in the ad you answered and/or the UVIP/vehicle history report, take that as an enormous red flag. This is especially true if the car’s odometer reading is significantly lower than what’s listed in the reports. In this case, it could mean the odometer has been rolled back to make the car more appealing. This trick is sometimes used by fraudsters to get more money for a vehicle than what it’s truly worth.
On average, a used car should have roughly 20,000 kilometres on its odometer for every year of its life. For example, it’s normal for a four-year-old vehicle to have 80,000 km on the odometer or a six-year-old vehicle to have 120,000 km.
If the car you’re considering has a higher odometer average than 20,000 km/year, ask the seller why. If the seller seems trustworthy, has been the only owner, and says the kilometres were mostly accumulated in highway driving, that’s less of a wear and tear concern than a long-term, long-distance city commute or getting no explanation at all.
If the car you’re looking at has a lower odometer average than 20,000 km/year, it may have sat idle often during its lifetime. This can cause issues such as a weak battery, dried seals, or fluids that need to be refreshed. Be sure to have your mechanic look for these issues when performing the pre-purchase inspection. And if the vehicle’s wear and tear doesn’t match the odometer reading, don’t rule out that the odometer may have been rolled back and you’re dealing with a fraudster.
Step 3: Verify the ownership history
If the name you were given when you answered the used vehicle listing doesn’t match the name on the vehicle’s ownership papers, consider this a huge red flag. This is one of the earliest indicators you may be dealing with a curbsider. Learn what a curbsider is and how to deal with the situation below.
If the current ownership checks out but the car has changed hands frequently, this could indicate it’s been causing problems for its owners. You’ll also want to look for extra damage or wear and tear on vehicles that were once owned by fleets or rental car agencies as these cars are sometimes driven harder than average.
What is a curbsider?
A curbsider is someone who sells cars for profit as a business while masquerading as a private seller. With the exception of estate and power of attorney situations, private sellers cannot legally sell vehicles they don’t personally own. Curbsiders are bad news because they’re known for engaging in dishonest practices to make more money from the vehicles they sell. This may include rolling back a car’s odometer reading, or trying to hide that its status means it can’t legally be registered or insured.
How do you know you might be dealing with a curbsider? If any of the information on the documents doesn’t match the information you’ve been given verbally or in a vehicle listing, that’s one clear sign. If you’ve been dealing with a private seller and you arrive to test drive a vehicle at a location that looks like a business with multiple vehicles parked out front, this should raise your suspicions as well.
Step 4: Review the car’s accident history
Most vehicle history reports will indicate whether a car has been involved in one or more crashes. Be sure to check how many incidents have been reported and what damage and repairs have been done. This doesn’t always mean you should walk away entirely, but certain types of damage are more likely to compromise a car’s structural integrity or affects its longevity. Have your mechanic examine these repairs in detail to ensure they were performed correctly.
Step 5: Check the vehicle’s status
A vehicle history report will have a field indicating the car’s vehicle status or title status. This field should be marked as clean, meaning the car has never been written off for any reason by an insurance company. If the status is marked as salvage, rebuilt, flood damaged, or otherwise, this needs your close attention.
Never buy a vehicle with a title status of salvage or flood damaged. A car with this status cannot be registered or insured. The only exceptions are if you intend to rebuild the car yourself or use it for parts (and a flood damaged car should never be used in either case).
If the car you’re looking at has a title status of rebuilt, this means it was once tagged as salvage and has been repaired well enough to be considered road-worthy. Before you buy a rebuilt vehicle, it’s important to have it thoroughly inspected, check what your insurance costs will be, and verify that it’s priced accordingly. Rebuilt vehicles can be more prone to issues, so consider carefully whether you can handle unpredictable repair expenses before buying.
Step 6: Check for liens
If you buy a used car with a lien against it, you become responsible for that liability once you take ownership. It’s therefore very important that you verify a vehicle’s lien status before you buy. In Ontario, you can find this information on the car’s UVIP. Third-party reports may also contain this data. You might need to pay extra for it, but this fee is far more affordable than finding out you’re suddenly responsible for paying off someone else’s loan.
Step 7: Ask for the car’s service records and confirm recalls have been addressed
It’s a good idea to ask the seller to provide any service records available for the vehicle. If the seller has been the car’s only owner and is detail-oriented, you might get lucky and receive a full service history. But it’s more common that a car has had multiple owners or record-keeping has been lax, meaning a portion of the service history is missing. The safest approach is to assume maintenance was not completed regularly for any period for which service records aren’t available. Ask your mechanic to check for any important scheduled maintenance that may have been missed based on this information.
Similarly, a vehicle history report may list any recalls issued for the car and indicate whether they have been addressed. Review this information carefully. (You can take the car in yourself to have missed recall work done after you’ve purchase it. Pointing this out to the seller may give you leverage to negotiate the purchase price.) If your report doesn’t list recall information, you can check Transport Canada’s Motor Vehicle Safety Recalls Database and cross-reference it against any service records you have available.
Step 8: Confirm the vehicle’s warranty status
If a used car you’re considering is relatively new and/or CPO, it may still be covered under the manufacturer’s new vehicle limited warranty, powertrain warranty and/or an extended warranty. You can check this by asking the seller for the paperwork provided at the point of sale. Remember that warranty terms apply to both age and odometer readings. A four-year-old car with 101,000 km on the odometer would no longer be covered by the manufacturer’s five-year, 100,000-km warranty. Be sure to ask the seller whether an extended warranty was purchased for the vehicle that may still apply.
If anything seems off, walk away
Each of the steps outlined above serves to alert you to potential issues when buying a used vehicle. If at any point in the process you spot a red flag that makes you uncomfortable, don’t hesitate to walk away. From safety concerns to financial implications, the risks of going through with a used car purchase that doesn’t give you confidence are just too great. And as the saying goes, if a deal looks too good to be true, it probably is.
Continue to Section 8: What to look for while test driving a car
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