6 Tips to Ensure You’re Getting a Good Deal in Buying a Used Car in Canada

Depending on where you live in Canada, having a car can be essential for your way of life. In general, city centers and suburban neighborhoods are well-connected by public transit, but you may have difficulty traveling to work or going to the grocery store if you live further away from the city center or need to transport items or people for work.

If you’re looking to save money on your next car, you may want to consider buying a used car. In this article, we’ll share some tips on how to get the best deal on a used car.

6 tips to ensure you’re getting a good deal on a used car in Canada

1. Consider your needs and wants while deciding on the type of car

Think about the size of your family, the purpose of buying a car, and your budget when deciding what kind of car to get. Make a list of must-have and good-to-have car features, including fuel consumption or mileage, trunk space, safety rating, size of the car, and resale value. This will help you save time and narrow down your options.

2. Look at trends in the used car market

First, let’s take a look at the used car market and how to navigate it successfully.

The Modern Used Car Market

Here are some facts about the modern used car market that you need to know:

  • Sales are High. In Canada, about three million used cars are sold every year, making the used car market about 1.5 times the size of the new car market. This also means that the average car has three owners before it hits the scrapyard.
  • Supply is Cyclical. Immediately after WWII, there was a surge of new car sales as soldiers came home and started families. Demand for new cars was exhausted by the 50s, and people bought used until around 1961, when the older cars finally kicked the bucket. This cycle has repeated itself four times, with the most recent surge peaking in 2016. This means that lots of relatively young cars are hitting the market right now.
  • Fleet Sales are Increasing. Because the economy is in decent shape, companies are upgrading their fleets of company or rental cars. This has increased the proportion of former rentals in the market.

Buyers benefit when supply exceeds demand as prices tend to go down. An influx in fleet sales can cause an oversupply, which often leads to discounts being offered on popular models.

What to Know Before Buying a Used Car

This is followed by a list of three considerations. Before buying, you should take some cautions into consideration. This includes ____________, ____________, and ____________.

  • Flood Damage. Parts of the country have been hit hard by recent flooding, and it shows in the cars for sale. Increasing numbers of cars have flood damage, and this often does not appear on CARFAX reports. Undeclared flood damage is especially a concern when buying from private sellers. Be particularly wary if buying from someone who lives in a flood zone.
  • Odometer Fraud. It’s not a myth, and it’s on the rise among private sellers. With “how-to’s” appearing all over the internet, many private sellers are cranking back their odometers before listing their cars for sale.

Key Costs to Consider for the Purchase Price of a Used Car

There are a number of additional costs you must take into account when buying a used car that you may not have considered. We will list them all below.

Dealership Fees

If you’re buying a preowned car from a dealership, it’s likely that you’ll pay what’s known as “dealership fees.” This is an umbrella term for a variety of things. Some examples include:

  • Vehicle registration fee
  • License fee
  • Title fee
  • Documentation fee

Other possible expenses you may have to pay for include advertising, an emissions testing fee, or even a deal preparation fee. Most of these fees are just additional charges to get more money from you, but some costs are required by law.

You should research which dealership to buy a used car from, as some dealerships charge many more fees than others. These fees must be disclosed by the dealership when advertising.


If you are planning to buy a used car from a dealership, be aware of additional costs that could be added on. These could include extended warranties, anti-theft devices, and paint protection. Dealers may try to sell you these features before finalizing the sale, so be cautious. You likely don’t need these extra features.

Sales Tax

It’s easy to forget that you’ll need to pay sales tax when buying a used car. Be sure to research the tax rate in your area, as it varies from place to place.


When buying a preowned car, remember that the cost of insurance may be expensive. Make sure to factor this into the car’s overall price. The cost will vary based on things like:

  • Premium type
  • Coverage amount
  • Age and location
  • Marital status
  • Driving record
  • Vehicle age
  • Vehicle model and make
  • Average annual mileage

One of the most expensive aspects of owning a car is figuring out the cost. Make sure you do this before you make a purchase.

Finance Costs

If you are not Scrooge McDuck, you may need to finance some of your purchases, which will add to the cost. Get the best deal possible by shopping around with different lenders.

Fuel Economy

How much a car costs to operate will depend greatly on how much fuel it uses. Cars that guzzle gasoline will be more expensive to own.

Maintenance and Upkeep

Even though used cars are cheaper than new cars, you will still have to pay for tune-ups and repairs.

3. Browse options online before going directly to a dealer or a private seller

Once you have decided which type of car you want to buy, compare various makes and models online before going to a dealer or private owner. Websites that list cars for sale, as well as individual dealership websites, can help you start your research.

Spotto is a website that offers a convenient way to search for dealership listings in one place and get listings that match your search criteria delivered to your inbox on a daily basis.

Compare prices for the same make and model of car in your area or neighbourhood and read consumer reviews to find the best value and pricing. Check the seller’s reputation and exchange policies, warranties etc. before you buy.

Below are some offline options to consider when looking to buy a car: -Your local newspaper’s classified section -Buying guides -Used car sales -Public auctions -Your local car dealerships

When buying a used car, it is riskier to buy from a private seller than a dealership. If you are planning to spend more than $3,000 CAD on a used car, it is advisable to go to a dealership. Before paying any money or signing any paperwork, if you are buying from a private seller, you should hire a mechanic for a full inspection. Private cars are generally sold as-is, so there are no refunds and no guarantees.

4. Plan your finances: Budget for car ownership costs

Aside from the costs of owning and maintaining a used car, you may have to pay for additional upkeep from time to time. Budgeting for these expenses will help you stay on top of your finances.

You can use the CAA’s Driving Costs Calculator to figure out how much it costs to operate your vehicle, based on your driving habits and current gas prices. The calculator will take into account the fixed costs of owning a car (like insurance and registration), as well as the variable costs (like gas and maintenance). You can also see the environmental cost of your car based on how much fuel it uses.

Key costs to consider for the purchase price of a used car:

  • Maintenance: Usually, an older car will be cheaper to buy, but over time you may incur more maintenance costs. If the car you’re planning to buy is out of warranty, it might be a good idea to set aside some funds to cover any unexpected repairs.
  • Fuel: A car with a good fuel consumption rating or mileage is usually expensive, but in the long run, it will save you money on fuel costs. 
  • Insurance: Compare insurance quotes from different providers for each vehicle you’re considering buying. Some cars (such as sports cars) attract a higher insurance premium. Remember, insurance quotes are also dependent on your total driving experience – a novice driver may have to pay a higher premium. Learn more about insurance in Canada.
  • Sales tax: This cost is usually added to the price of the vehicle at the time of purchase. Sales tax varies by the type of sale (dealership or private), is provisional, and depends on the value of the vehicle being purchased. 

The app “Drive” can help you keep track of when your car needs maintenance and schedule appointments with your dealership.

5. Do inspection and test drive

What to Look for When You Arrive 

When you arrive for your test drive, first inspect the vehicle. Look for the following red flags:

  • Paint job. Mismatched paint is a big warning sign of previous damage.
  • Frame warping. If the car doesn’t sit level or has warping under the hood, it has been in a major accident.
  • Uneven tire tread. The treads of all four tires should be equally worn. Uneven tread is a sign of deeper problems in the wheel alignment, steering, and frame. 
  • Tears on the upholstery. These are expensive to repair and should result in a discount.
  • Leaks, corrosion, or discolored fluids. Any of these are a sign of major problems in the fluid-bearing components. Transmission fluid should be pink or red, while oil should be light brown.

If the car meets your standards, take it for a test drive.

What to Look for in a Test Drive

When driving, do these tests:

  • Fold all the seats; open up all the storage space.
  • Take a route that includes all major features—hills, curves, highway, tight residential streets, rough roads, and even country roads (if they’re a regular part of your commute).
  • Do a three-point turn to test maneuverability.
  • Accelerate quickly on a long stretch, paying attention to how much power the engine puts out.
  • Brake both slowly and quickly.
  • Take a tough hill and listen for unusual noises or vibrations.
  • Check the mirrors for blind spots.
  • Use cruise control.
  • Turn on the AC.

Third-Party Inspection

You should always get a mechanic to inspect your car before you buy it. This will cost you around $100, but it could save you thousands in unexpected maintenance costs.

Document Check

The seller should provide these documents:

  • the Used Vehicle Information Package (UVIP)
  • Safety Standards Certificate
  • Ontario Drive Clean Emissions Test

You need the following documents to register your vehicle in Ontario: a Safety Standards Certificate and an Emissions test. If the seller does not have these documents, you will have to pay for new inspections. A Safety Standards Certificate costs $70 and an Emissions test costs $30.

6. Read up and be aware of provincial guidelines for buying a used car and accessories

When you buy a car from a dealership, the dealer usually takes care of all the paperwork and can tell you about different financing options. However, if you buy a car from a private seller, make sure the title and registration are transferred to you.

The process for selling a used car varies by province, so it’s important to check the website for your province or territory for more information.

Driving with children in the car: 

Transport Canada recommends that kids stay in the back seat until age 13 and that each Canadian province/territory has certain guidelines for driving with children in the vehicle. As such, it is not advisable to buy car seats second hand because they have expiry dates.

There are three types of car seats that you need to be familiar with: 

  • Stage 1: Rear-facing seat – legally required across Canada for all children from birth until reaching a weight of at least 20 lbs.
  • Stage 2: Forward-facing seat – must always be installed with the rear tether strap in use so that it doesn’t lift away from the back seat of the car in a crash.
  • Stage 3: Booster seat – it’s recommended to put this off for as long as possible because the seat is no longer doing any of the work to keep your child safe at this stage.


The prospect of moving to a new country is thrilling, and each day promises to be an opportunity for learning something new. Whether you’re already an experienced driver and/or car owner in your home country, or you’ve only recently gotten your driver’s license, familiarizing yourself with local norms and financing options will help you find the perfect vehicle for you and your family.


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