Broker for dealer auto auctions

The first question is whether to buy from a private seller or a registered car dealer. 

When buying a vehicle privately, you buy “as is”—and if the seller misleads you about the car’s history or condition, or if anything goes wrong after the purchase, you have no recourse whatsoever. Buying from a registered dealer gives you access to more protections and services.  

• Dealers must be licensed by a governing body, such as the Ontario Motor Vehicle Industry Council (OMVIC), and comply with its code of ethics, as well as consumer protection laws. OMVIC holds dealers and salespeople to certain standards, and it has an enforcement strategy for non-compliance and illegal sales. 
• Dealers rely on repeat business, so it’s in their best interest to treat customers fairly and provide good service. That doesn’t always happen, of course, but private sellers have no such incentive. 
• Dealers offer many value-added services, such as vehicle financing, used car warranties, in-store licensing, vehicle trade-ins, and maintenance and repairs. 
• Buying from a dealer can remove a lot of the hassles of buying privately (we’re speaking from personal experience here).    

The bottom line: Dealer prices might be a bit higher than those on classified advertising sites, but as the saying goes, you get what you pay for.  

Costs to consider

Once you’ve decided on a vehicle, shop around to get a feel for current prices. Then break out your calculator: there’s more to a vehicle’s cost than its sticker price. Add up the overall cost to own, including insurance, gas, maintenance, taxes and—if you’re getting a car loan—interest fees.

Before financing your purchase, compare the rates offered at the dealership and your bank. Most dealers offer financing on used vehicles for most buyers, regardless of credit rating, and they help to arrange loans with prime or subprime lenders.

Warning signs for used cars

As with any big-ticket item, you should be aware of the warning signs that a vehicle may not be worth buying.

• Ask the dealer for a Carfax report. It shows the vehicle’s history including previous owners, accident claims, flood damage, and provinces the vehicle has been registered in.
• If a vehicle has extensive modifications, proceed with caution. Some modifications could void the vehicle’s warranty, if it still has one, and they could also affect the vehicle’s reliability.
• Watch out for cars with suspiciously low kilometres. The average daily driver will clock around 20,000 kilometres per year, so if a four-year-old vehicle only shows half of the expected 80,000 kilometres, you should find out why.

Inspecting the vehicle

Never rely solely on what anyone tells you about a used car’s history or condition. Again, ask for a Carfax report, and learn to look for simple signs of excessive wear and you’ll save yourself a lot of trouble.

• Mismatched paint could mean the car was in a collision and may have underlying damage.
• If the width of the gap between the doors and frame isn’t consistent, this could indicate frame damage.
• Uneven tire treads could be a sign of poor steering alignment, which is usually fixable but could mean an unanticipated cost.
• Excessive interior wear on seat upholstery, floor mats or door panels might point to a previous owner who didn’t properly maintain the vehicle.
• If you notice any leaks or strange smells from inside the vehicle or under the hood, ask more questions to find out the cause.

Negotiating the deal

When negotiating with a dealer or private seller, keep these things in mind: 

• Decide in advance—not while negotiating—how much you’re willing to spend. 
• Don’t be afraid to walk away if you feel uncomfortable or pressured.
• If the vehicle price is non-negotiable, try asking for some extras, like free rustproofing or winter tires.
• The bill of sale will show a price breakdown, including the vehicle’s sticker price, administrative fees, licensing fees, taxes, extra services and more. Take the time to read it carefully and ask the dealer to clarify any numbers you’re unsure about. 
• Similarly, when discussing vehicle financing with a dealer or a bank, they’ll give you a lot of numbers, including interest rates, monthly payments and residual value. If there’s anything you don’t understand, ask them to slow down and explain it again.