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Most people consider buying a used car an unpleasant experience. It can be difficult to find the vehicle you want and negotiating a price can be frustrating. There is always the concern that while you may be saving a lot of money versus buying a new car, you could be buying someone else's problems.

We will take you through the buying process, give you some pointers that will tilt the odds in your favor, and try to make the whole experience a little less confusing.

But remember an important fact. Ultimately, your instincts are your best guide. If something about the car or the deal just doesn't seem right, our advice is to listen to yourself and walk away, no matter what the car magazines, websites, or guidebooks say. You are the one looking at the car, you are the one talking to the owner or dealer and you will be the one that has to live with your decision.

First, we'll show you how to prepare for the purchasing process. We'll look at where to buy used cars, vans and trucks. Then, we'll give you some key suggestions on how to inspect and evaluate a used vehicle. Next, how to negotiate your price. Lastly, there is some information on your rights as a used car buyer.


Preparation is the single most important thing you can do to help ensure that you are successful in your used car or truck purchase. Sure, it can be a pain in the neck, but it may just save you years of regret.

When to Buy

The best time to buy a car is when you don't really have to! The benefits of planning ahead and taking your time cannot be emphasized enough. If your car or truck is due for some major work and you've decided not to put any more money into it, don't wait until the last minute to start looking for a new vehicle. You are far more likely to get a better deal on both sides of the equation (the vehicle you're buying and the one you're selling or trading in) when you have time to look around and have a vehicle that is still roadworthy to sell.

Drive a few different examples of the same model to give you a feel for what the vehicle should drive like. Driving only one or two examples may not give you a proper feel as to how the vehicle should drive. Time will also buy you negotiating power, enabling you to wait out a seller or simply walk away and find something better. Being without wheels can bring on enormous pressure to get them -- sometimes forcing bad decisions.

We fully understand that in the real world it's not easy to follow this advice, but it is the single most effective strategy you can employ. Below are some other important steps that will prove beneficial.

Determine Your Budget

How much do you want to spend? Before you embark upon the selection process, you need to establish your buying parameters. The amount of money you want to spend will greatly influence the type of vehicle you buy. Consult the used vehicle pricing data to set your buying parameters--and then stick to it! Buying a car often stirs up emotions that aren't particularly sensible. It's not always easy, but don't get caught up in the heat of the moment and make a decision you'll regret.

Narrow Your Choices

Consider your transportation needs and your lifestyle needs to help decide on the type of vehicle you should buy. Do you want a sedan or a coupe? A sport utility or a wagon? Make the decision! This will save you a lot of wasted time in your search. Don't just consider your immediate needs. Keep in mind that the same amount of money can get you into a late model cream puff compact or an older sport utility with a lot a miles, impending service bills and most likely a whole lot of extra cash for gas. Determine your priorities.

Now that you've decided the type of vehicle, you're confronted with dozens of makes, models and trim variations. Again, try to narrow down your list to a few vehicles.

A good place to start is the annual April auto issue of Consumer Reports, available in most libraries (remember those?). You can also visit their website. Check their frequency-of-repair data to determine if there may be one or more trouble areas in the particular model(s) you are considering. Focus on these areas when you go to look at the vehicle. Ask if they have been serviced or replaced.

Even if a vehicle seems to show good overall reliability you can still get stuck with a problem car. Do not rely solely on published data. Conversely, a model with relatively poor ratings may have received loving care throughout its life and be perfectly acceptable. Check with friends, neighbors, relatives, etc. If any of them had owned a similar model find out what their experiences were. After all that, don't forget that you will still need to have any used vehicle inspected before you buy.

A word of caution: with so much information available on the internet, it's easy to suffer information overload. To make matters worse, a lot of information is often misleading, contradictory or downright wrong. Manufacturers spend billions of dollars on branding and consumer influencing, and it often shows as owners regurgitate the latest ad campaign in various bulletin boards, blogs, or comment sections. And you can bet some of those comments come from people employed or paid to monitor the most popular sites.

This is also the time to check into the cost to insure the vehicle. There can be substantial differences among models.

Other sources to check are Transport Canada and the US National Highway Traffic Safety Administration (NHTSA). They have complete recall records for all cars sold in the US. You can get the information directly from their databases on the web. You can also call your local dealer or the manufacturer and ask if they can tell you if a specific example (you'll need the VIN number) is under a recall notice or if it has had all its recall work completed.

Manufacturer communications about a particular model (sometimes better known as Technical Service Bulletins, or TSB's) that have been issued by the manufacturer for the model(s) you are looking at. Some of these may involve mechanical work paid for by the manufacturer, either partially or in full. These reports are also available online at the above links. You can also contact the manufacturer directly and request a list for your records.


There are lots of places to buy used cars and trucks. Of the million used cars, vans and trucks that will be sold at the retail level in the US and Canada this year, about half will move through franchised and independent dealer lots and half by the owner's themselves, including the rental companies.

You will find pros and cons with each supply channel of used cars. We've highlighted the major ones below.


Dealers are regulated by various laws and regulations. They have to ensure that the vehicles they sell meet all basic provincial and federal requirements. That means the brakes, lights and emissions systems work properly. The car must also meet all safety requirements. While this does not assure your satisfaction, or even a reliable vehicle, regulations give you and the dealer a set of rules for playing the game. It is easier (though far from easy), to seek remedies if the vehicle you purchase has been misrepresented, intentionally or not.

Unlike a private party who may sell one used car every few years or so, one factor that all franchised and independent dealers have to consider is their reputation in the community. If they upset or intentionally mislead too many people, they will lose business. Often the most earnest advertisers are the dealers that can't rely on repeat or word-of-mouth business.

While it doesn't hurt to look at the many websites with dealer satisfaction indexes or consumer ratings, you have to be careful here, too. Fictional postings (good and bad) are not unheard of, and in fact, there's a whole industry centered around "reputation management"!

Franchised New Car Dealers

This is usually the most expensive option. New car dealers make a large portion of their profits from used vehicle sales. And with intense and unprecedented competition in the new vehicle sector depressing margins ever further, their determination to wring as much profit as possible out of used cars, vans and trucks is all that much stronger.

On the other hand, new car dealers have large selections, especially of the make they sell. Often, dealers get first shot at the best cars being auctioned by the manufacturers they represent. These may be one-owner "off-lease" vehicles or returns from rental firms or from other fleet sales.

Independent Used Car Dealers

Like new car dealers, used car dealers (independent dealers not affiliated with a manufacturer) have to ensure the vehicles they sell meet minimum federal and provincial requirements.

Because they do not have the overhead of a new car dealership and generally operate on thinner profit margins, you can often get a better deal from an independent. New car dealers capitalize on the perceived stability and prestige of a new car operation by charging higher prices. Used car dealers cannot.

Of course, there are downsides: First, low overhead means they usually do not have service or repair facilities or expertise in a particular make or model. You may be relying on a service department that does not know your vehicle particularly well. There are exceptions, of course.

Second, the quality of vehicle may be lower. Generally speaking, these dealers get auction leftovers or vehicles that have been wholesaled from another dealer. This doesn't mean the vehicle is bad, just that you'll have to keep your guard up. Hard-driven examples are far more likely to end up on these lots. An inspection by an independent mechanic is essential.

You may want to consider the used car dealer that specializes in one or two specific makes. Since they limit their service to one or a few makes, often they have developed a thorough understanding and expertise of the models they sell. Indeed, most have a backgrounds at marque-specific franchised dealers.

We recommend buying from used car dealers who have been established in your community for at least a few years, preferably at the same location. Ask for references. Be extra careful of transient operators and "Buy Here, Pay Here" or "Tote-the-Note" lots that offer second-rate vehicles and onerous credit terms, usually to people with poor credit histories.

Private Party Sales

Somewhat riskier than purchasing from a licensed dealer, often private parties offer the best deals. Newspapers, auto trader magazines, and, especially, the internet are full of cars, vans and trucks for sale by individuals. The biggest downside? Limited and often impractical recourse if there is something wrong with the vehicle or if it was misrepresented.

If you are considering this route, start at the least risky source: someone you know. Ask around and see if anyone is considering replacing their vehicle in the near future. You can offer a little more than a dealer would give in trade, so it's a win for all involved. This is an especially good strategy if you know that they had few problems with the car and took care of it properly.

If you end up hitting the classifieds and don't know the person, take a look at their house and how they dress. If the outside of their house is a mess and they are not clean in their personal habits, it is unlikely that they took proper care of the vehicle.

Always ask for service records. The ideal private party transaction is buying from the original owner who has maintained the vehicle properly and has the service records to prove it. The records will also give you a great deal of confidence in the odometer reading.

There are downsides: First, it's a good idea to ensure that you are really dealing with a private individual and not a dealer. There are thousands of front-yard dealers or "curbsiders". One way of weeding out these dealers is to respond to their advertisement by asking about "the car" without actually saying the model name. If they have multiple cars for sale, they won't know which car you are calling about and will have to ask. Second, unless you are buying a vehicle still under it's original warranty, you are not getting any guarantee. Third, in the absence of outright fraud, you have little recourse against a private party.

We don't want to paint all curbsiders with the same brush. Many are just trying to make a little extra income and do care about their reputation. Because of their extremely low overhead, they can offer good vehicles at prices most dealers can't meet. The problem for the consumer is that it's often difficult to weed out the bad ones.

Rental Companies

Generally, rental car companies will sell most of their cars at the end of their service period through wholesale auctions. Or they may have an arrangement with the manufacturer to return them. Rental vehicles are often also available directly from the rental companies. 

Approach them as you would a new car dealer. The cars have likely been well-maintained (although maintenance requirements are quite low for new cars) and many have low mileage. Many also have factory warranties that are still valid. An unknown is that some examples may have been abused -- especially high performance models. You never know who's been behind the wheel.

Consumer Auctions

It's likely that you can find an auto auction in your area that is targeted at consumers. You can get a good price, but not if the vehicle is in demand on that day. Do not assume that just because you can buy it at an auction that you will get a good deal, because that is absolutely not true. Often these vehicles are rejects from wholesalers or other dealer auctions.

A problem with some auctions is that you may not get a good chance for a thorough inspection or test drive. Also, you may not have the chance to get out of a deal if the car is a lemon or is not what you thought it was. Be sure you understand what your rights are before you make an offer.

As a result, we do not recommend buying at these auctions unless you fully understand the risks, and know what you are doing when it comes to inspecting a vehicle. Bring a mechanic if you can.


Now you are at the point of physically looking at and test driving vehicles. You should be looking for reasons NOT to buy the car! Do all you can to verify its history. Inquire about accidents, major repairs, previous owners and what the vehicle was used for. Was it used as a tow or plow vehicle? Those two activities accelerate wear on major components.

If buying from a private party or if the car had been serviced by the selling dealer, ask to see service records.

Although you should have any used vehicle inspected by a qualified mechanic before buying, there are some things you can check out on your own that may help you spot a clunker that isn't worth pursuing.

It is always a good idea to verify information with a a vehicle history report. We offer Carfax reports on our website, and it's been proven over the years to be beneficial for millions of car buyers.


The body should be straight and have uniform color. Paint that looks like an orange peel generally means that an inferior paint job has been applied. In a late model car that may indicate that it has been in an accident.

Check for rust along the body and under the car. Too much rust can eventually destroy a car. Once it starts it can progress very quickly. Determine if undercoating has been recently applied, as that could be masking a number of problems, including rust.


Check the transmission fluid. It should be pink, not brownish. You can smell it to make sure there's no burnt odors. On automatics, gears should change smoothly. On a manual transmission, gears should shift without any loud noises, especially grinding. If the clutch only activates at the top of the pedal's range, it could mean that the clutch is due to be replaced. That can be expensive.

Cooling System

Check the engine compartment for leaks and the floor of the passenger compartment for moisture. Both could mean that the cooling system is faulty. Check all the hoses and around the engine in areas such as the intake manifold and cylinder heads.

Take the cap off the radiator (CAUTION: Don't do this when the engine is hot - check the owner's manual for specific instructions). The coolant fluid itself should be clean and free of floating debris. Dirty fluid means the car has not been well maintained or has an internal cooling system problem.

If you want to get crazy, bring a small turkey baster or long eye dropper and extract some coolant. Squirt it into a clear glass and examine the contents. The fluid should have a viscosity greater than water, be free of debris and have a oddly translucent look to it.


The engine should start quickly and idle smoothly. If you have someone with you, have him/her push down on the accelerator to rev up the engine. Check the exhaust for smoke. If it's just you, check the rearview mirrors. Blue smoke is a warning sign as it can indicate excess oil consumption. The engine may need rebuilding or replacement. Lots of white smoke (not just a trace on a cold day) means that the coolant is leaking into the engine, which could be expensive to repair.

With the engine running, put good sized piece of cardboard or poster board under it to check for leaks. If you see any within a few minutes, it could be a simple fix such as a gasket or something far more serious and expensive. Do not consider purchasing the vehicle until you find out what is the cause of any leak(s).

Turn the engine off. There should be no run-on, it should stop immediately.


Bounce on all four corners. If any corner takes more than 2 bounces before it stabilizes, it may need new shocks or struts.

Test Drive

First, always test the brakes before moving. The pedal should feel firm. Drive the car over a variety of road conditions and speeds. Don't be rushed or pressured into a short test drive. Ideally, the seller will let you take the car out yourself. At the very least, spend 15 minutes behind the wheel. Be sure to save at least for some part of your test at highway speeds and try to drive over roads you are familiar with.

It's also a good idea to find a really rough road to find out how well the suspension performs and if there are any squeaks or rattles not noticeable on smooth roads. Make a note of any unusual or obtrusive noises, rough operation, and things that simply don't feel right. A common malady is broken tie-rod ends, which usually results in a clunking in the front end over even minor bumps. Figure about $100 a side to have them replaced.

When you get back, leave the car idling for another 5 minutes and check the temperature gauge. Check your impressions of the test drive against our inspection checklist

  • Rippling or "orange peel" paint
  • Rust
  • Mismatched paint/overspray
  • Poor paint job. Likely previous accident if late-model car
  • Expensive body repairs needed
  • Previous accident likely
  • Transmission
  • Fluid is dark and foul-smelling
  • Noisy
  • Automatic does not shift smoothly, manual clutch engages only at top of range or makes grinding sounds.
  • Transmission may need replacement. Car may not have been well-maintained
  • May need major transmission work, or it could be a simple adjustment
  • Cooling System
  • Evidence of leaks in engine compartment or moisture on floor of interior
  • Coolant fluid is dirty
  • Coolant smell inside the car/fogging from defroster
  • Cooling system is leaking and needs repair
  • The owner may not have properly maintained the car
  • Heater core could be leaking
  • Engine
  • Blue smoke
  • Heavy white smoke
  • Black, sooty smoke
  • Oil spots under car
  • Loud knocking
  • High pitched squeal
  • Ticking related to engine speed
  • Excess oil consumption.
  • Coolant is leaking into engine. May be a faulty head gasket
  • Timing off, carbon buildup
  • Anything from a simple gasket or seal to a major internal engine problem
  • Could be worn internal parts
  • One of the accessory belts, low coolant/ water pump
  • Worn or stuck valve lifter; low oil level
  • Suspension
  • Continues to bounce after pushing down on a corner
  • Clunking, grinding or thumping sounds
  • Clicking sound from front
  • Worn struts or shocks Worn struts or shocks.
  • Tie rods, ball joints or bushings are worn or have failed
  • CV joints, bearings
  • Steering
  • Pulls to one side under braking at higher speed
  • Play in steering wheel before steering engages
  • Steering column feels loose
  • May need alignment. Braking system needs inspection
  • Steering rack or other components worn
  • Brakes
  • Too much play, feels squishy
  • Vibrates or shudders when braking at higher speeds
  • Grinding noise when brakes are applied
  • Need brake system work
  • Rotors may need turning or replacing
  • Pads completely worn.
  • Calipers need adjustment or replacement
  • Tires
  • Uneven wear, excessive wear on inside or outside tread
  • Needs alignment.
  • Could be the result of previous frame work

    After you have performed these tests, you can decide whether the vehicle is worth considering. If a number of problems appear, especially problems with the engine or transmission that can be expensive to repair, you probably want to walk away.

    If it seems to have few or no problems, record the VIN number on the vehicle for use in ordering a history report and for verification of the final paperwork. The next step is to negotiate a price.


    As distasteful as it may be to some, negotiating is the key to getting the price you want. Dealers are masters at the game of negotiating; they do it every day. Your best weapon is information and preparation, but don't expect to outwit or outmaneuver the dealer - they've seen it all. Your best bet is to show the dealer you are serious about purchasing a vehicle and are sincere in your offer. Grandstanding, losing your temper, or wasting the dealer's time benefits no one. A simple "Thank you for your time, but I simply won't pay that price. Here's my number if you change your mind. Good day." often works wonders if you follow up by walking out the door. It is this very distaste for negotiating and confrontation that gives rise to the myriad of car buying services that promise you a "fair deal". A fair deal for who? Your concern should be the BEST deal for YOU! If the dealer doesn't think it has any fairness in it, he'll simply choose not to sell you the car at that price, and you go from there.

    When buying from a dealer, we strongly recommend paying no more than the retail numbers on our website. It may not be unusual to see asking prices hundreds or thousands over our retail level. Buying at that level would make any dealer very happy. It is not unusual for a dealer to mark up even moderately priced used cars three, four, or even five or more thousand dollars. Some of the upper end luxury cars may be marked well beyond that. Do not be afraid to haggle aggressively. Dealers may feign indignation but rest assured, they will not be offended.

    If you are buying from a private party, you should pay under retail and as close to wholesale as possible.

    Finally, make sure the deal is subject to a professional inspection. In other words, make sure that if your mechanic or diagnostic service finds a problem, you can either deduct the cost of the repair from the agreed price or, if the seller is a dealer, have the problem fixed at no cost to you.


    If you have a mechanic you trust, he is probably the best choice for inspecting the vehicle. He should not be affiliated with the dealer or seller as you want to be sure of objectivity.

    If you do not have a mechanic, try the the CAA. They have inspected and certified repair shops for both inspections and repairs. Contact your local CAA office or visit their website for specific information.

    Some repair shops may have ASE (National Institute for Automotive Excellence) certified mechanics whom have completed formal repair and diagnostic training. Usually they will display the ASE logo at their establishment. Make sure their certifications are current, and that the mechanics certified will actually inspect your vehicle. While this is largely a US organization, many Canadian mechanics have been certified here as well.

    Be sure to get a written estimate of repair costs from the mechanic or diagnostic center specifying the work that needs to be done. If repairs are needed, go back to the dealer or seller and use it to get a lower price or a free repair.



    Newer used vehicles may have a factory warranty that can be transferred to you. In many cases, but not all, you will need to sign a warranty transfer. Check with the manufacturer's consumer information line for this information.

    Extended warranties will most likely be offered by a dealer, but at a price. You may be able to use an extended warranty as a bargaining chip. You may be able to get the warranty added to the deal at no additional cost as an incentive for you to buy the car. Unfortunately, warranties not backed by auto manufacturers have at best, a dubious reputation. Find out who underwrites the warranty work, who authorizes work to be performed, how many years the company has been in business, and where they are located. Check with your state's attorney general's office for any complaints against them. Finally, always check with your mechanic to make sure if he will accept work under a specific warranty program.

    While many warranty programs are legitimate, we seen too many consumers burned by fly-by-night operations that stay in business only long enough to compensate their management with fat salaries and generous expense accounts.

    Dealer Books/Websites

    Both dealers and private parties will always be looking to maximize their gain, whether buying or selling. When you visit a dealer, they may have a number of dealer price guides that they will use to justify a price.

    In general, dealer-oriented guides that are used by dealers and manufactureres tend to have high retail prices with large markups over wholesale prices. They usually represent the price that a dealer would love to get. Dealers will most always take less than the retail prices in either of these guides or their original asking price. Conversely, these guides also tend to lowball wholesale prices, increasing the spread, and thus the profit, of any deal.  Look up the value or ask to see the wholesale value in their source for the car you are buying as well.

    Many guides now throw all kinds of numbers at you. Now, we would never imply that this is done to confuse the average consumer, so at the end of the day remember that the only two values that really matter are the wholesale value and a market-based retail value.


    Just as with new cars, you can finance the purchase of a used car. First, you should shop around for the best deal from banks, credit unions or other finance companies as well as the dealer. Compare interest rates and terms.

    In general, interest rates are higher for used cars than for new cars. Avoid high-interest rate "tote the note" or "buy here, pay here" used car lots that deal with buyers with bad credit. In addition to high interest rates, these operators frequently charge much more than the car is worth.

    Used Car Leases

    There are still some lease programs available for used cars, generally from dealers. This was popular for a time, but has fallen out of favor. Like a new car lease, be sure to ask for the capitalization cost. It should include all fees and related charges plus the agreed price of the vehicle. Check also for loosely defined "wear and tear" clauses, residence restrictions and excess mileage charges. If you drive less than 10,000 miles a year, you may be able to get a better lease deal.

    In general, we do not recommend leasing a used car. After all, a major benefit to leasing a new car is that the warranty period is as long as the lease term. That means any defects will be covered. With a used car, the warranty (even an extended warranty) may expire before the lease is completed. The last thing you want to do is put money into someone else's car. An exception would be manufacturer-sponsored leases on late model "certified" cars, particularly luxury models, that are backed by an original manufacturer's warranty for the term of the lease.


    The rules for insuring a used car are the same as for a new vehicle. If you have any questions on your province's requirements, contact your province's insurance regulator, or call your local insurance agent.

    If the vehicle is older and does not have much value, you may want to ask your insurance agent about not purchasing collision insurance in order to save money on your insurance bills.

    Titling and Registering the Vehicle

    All Provinces require an unencumbered, free and clear title to the vehicle. You will also need proof of insurance. Check with your insurance representative or visit your province's website for rules and regulations regarding titling, registration and insurance.

    Province Inspection

    Each province has different requirements for safety inspection., but generally a used vehicle must pass some sort of an inspection before ownership transfer or within a certain time period after purchase. Consult your province's requirement through our province transportation links. 


    Canada has no national lemon law. Provincial laws are weak at best.  Probably your best bet is to go through the Canadian Vehicle Arbitration Plan (CAMVAP).

    Your case is strongest if you can show written proof of misrepresentation by the dealer. Without written proof it may be difficult, although not impossible, to make your case.

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