The Ultimate Guide to Buying a Used Car in Ontario

By Arthur Dubois | Published on 29 Jun 2023

a hand on the steering wheel of a car

    So, you want to buy a used car in Ontario but don’t know where to start? Purchasing a used car comes with many daunting and overwhelming steps. However, with the right knowledge and preparation, you can make informed decisions and get the best value for your money. In this guide, we’ll take you through all the essential steps of buying a used car in Ontario.

    Understanding the Used Car Market in Ontario

    Before you start your search for the perfect used car, you need to understand the market in Ontario. Knowing what’s popular, in demand, in stock and seasonal factors affecting prices will keep you focused and within your budget.

    Ontario ranks as the most populous province in Canada, and it has a thriving used car market. With more than 12.8 million registered vehicles on the road, you have plenty of options when looking to buy a used car. However, with so many options available, navigating the market can feel overwhelming.

    Certain car models and brands are more popular in Ontario than others. Generally, drivers favour Japanese car brands such as Toyota and Honda for their reliability. Meanwhile, luxury European models, such as BMW and Mercedes-Benz, hold their value well. However, remember that popularity can also affect prices. If a certain model or brand is in high demand, such as Ford, you may pay more to purchase one.

    When shopping around, you’ll also want to consider fuel efficiency. Ontario has some of the highest gas prices in Canada, so a car with good fuel economy can save you money.

    Seasonal Factors Affecting Prices

    In addition to demand and supply trends, several other seasonal factors can affect the price of a used car in Ontario. For example, convertibles may be more expensive in the summer as people buy them for summer road trips. Meanwhile, SUVs tend to sell for more in the winter since they help cope with treacherous driving conditions.

    Further, consider the impact of Ontario’s harsh winters on a used car. Salt and other chemicals used to melt ice on the roads cause rust and other damage to a car’s undercarriage. This can affect the car’s value and increase the cost of maintenance.

    In conclusion, carefully consider Ontario’s used car market’s demand and supply trends, popular car models and brands and seasonal factors. By doing your research, you can find a great deal on a used car that fits your needs and budget.

    Preparing for Your Used Car Purchase

    Buying a used car in Ontario can save you money, but be prepared before you start your search. These tips will help you get started:

    Setting a Budget

    Before you start looking for a used car, set a budget. Determine how much you can afford to spend on the car itself, as well as any ongoing maintenance costs. Keep in mind that you may need to invest in repairs or upgrades on your purchase, so leave some wiggle room.

    To get started, use an online car affordability calculator. These tools can help you figure out how much you can afford based on your income, expenses and other factors.

    Identifying Your Needs and Preferences

    When it comes to buying a car in Ontario, think carefully about the type of vehicle you need. Make a list of your needs and preferences for your used car. Consider the size, style and features with value to you. Do you need a car with good gas mileage? Do you need a lot of cargo space? Do you want a car with a backup camera or other high-tech features?

    Once you have a clear idea of what you want, you can start searching for cars that meet your criteria. This will help you narrow down your search and find a suitable car more quickly.

    Research Your Car Financing Options

    Planning your financing options marks an essential first step before delving into Ontario’s used car market. The approach you take towards getting a used car loan can drastically influence your car-buying experience and financial obligations. Here’s an overview of different car financing paths.

    Traditional Banks Financing

    Banks are often the go-to for used car auto loans. While interest rates can vary, those with good credit ratings may secure a favourable deal. However, bear in mind that banks’ approval processes can be slower and stricter, especially for those with lower credit scores. Therefore, for this option, start early and come prepared for a meticulous review of your financial history.

    Online Car Loans Lenders

    In our digital age, online car loan lenders, such as Car Loans Canada, have emerged as a speedy, user-friendly alternative. They make application processes simple with faster approval times, while accommodating towards individuals with subpar credit scores. On the downside, the trade-off for convenience could result in higher interest rates. So, shop around and compare loans before making a decision.

    Used Car Dealerships Financing

    Dealership financing offers another viable avenue, especially due to its convenience. Essentially, it provides a one-stop solution for your vehicle purchase and financing. Dealerships tend to partner with a network of lenders, enabling them to present you with multiple loan offers. However, you must proceed with caution. Their financing could come with higher interest rates and more rigid  loan terms. Therefore, even though immediate financing might seem attractive, always thoroughly read the fine print and understand your commitment.

    How to Choose a Used Car Dealership 

    Buying a used car in Ontario can save you money while still securing a reliable vehicle. However, finding the right dealership can make for a challenge. Please consider these things before choosing a used car dealership.

    Dealership Reputation

    Before you shop at a dealership, research its reputation. You don’t want to end up buying from a company with a history of poor customer service or shady business practices. Look for reviews and ratings from previous customers and consider their level of customer service and after-sales support. You can also check with organizations like the Better Business Bureau to see if it faces any current complaints.

    It’s also a good idea to visit the dealership in person and speak with the sales staff. Do they seem knowledgeable and helpful? Are they willing to answer your questions and address your concerns? A good dealership operates transparently and upfront about the condition of their used cars. In the end, they will work with you to find a vehicle that meets your needs and budget.

    Car prices

    Choosing a used car dealership also requires a careful look at the pricing of its vehicles. Competitive pricing is a hallmark of a good dealership, but you must balance price with the vehicle’s condition and value. In your search, you may encounter dealerships offering strikingly low prices. However, don’t get lured in solely by the allure of a bargain. 

    A very cheap car could signal underlying issues or high mileage, leading to higher maintenance costs down the road. Make sure to compare similar models across different dealerships to get a feel for the market – and a fair deal.

    Trade-in Value

    It can pay off to choose a dealership that offers a favourable trade-in option for your existing car. In this process, the dealer assesses the value of your current vehicle and reduces the cost of your new car accordingly. Overall, it can significantly streamline your buying journey. Not only does it remove the stress and potential complications of private selling, but it also decreases the total amount you’ll need to finance.

    So, the best dealership isn’t just one that has the car you want, but also one that will give you a fair, market-based value for your current vehicle. Before choosing a dealership, get an independent evaluation of your car or use online valuation tools to estimate its worth. This will give you a benchmark for trade-in negotiations. 

    Online Dealerships Vs Traditional Dealerships

    Online used car dealerships like Clutch are making waves in Ontario, offering an alternative to traditional dealerships. While dealerships provide immediate test drives and trade-ins, Clutch stands apart due to its unheard of 10-day/750-km return policy. Furthermore, each vehicle in Clutch’s inventory undergoes a 210-point inspection, with a free CARFAX report included.

    Ultimately, choosing between online platforms and traditional dealerships hinges on personal preferences. Those valuing convenience and transparency might favour online platforms. Meanwhile, traditional dealerships may appeal to those who prefer in-person inspections and price haggling. 

    Dealership Financing Options

    Not every buyer requires dealership financing, but for those who do, the flexibility and breadth of options significantly impacts their experience. Some dealerships offer rigid, cookie-cutter financing plans, while others present a more extensive suite of options. The second choice tends to accommodate a range of budgetary constraints and credit situations. 

    Overall, seek to find a dealership that’s upfront about the conditions of their financing plans. This includes transparency about interest rates, the length of loans and any penalties associated with early repayments. Beware of dealerships that draw customers in with the allure of low monthly repayments. Typically, they extend the loan’s lifespan, leading to increased interest payments over time.

    How to find a used car in online 

    Embarking on the journey to purchase a used car marks a crucial first step: online research. In today’s digital era, you must conduct a thorough investigation of potential purchases online for a good price. As you comb through the myriad of available options, attention to detail makes your best ally. Any anomalies – such as “too good to be true” prices, evasive sellers or missing information – should immediately raise flags.

    Used car websites, abundant in Ontario, cater to both private sellers and used car dealerships. Ideally, they provide detailed listings that can be easily navigated and filtered based for make, model, year, price and location. This online landscape simplifies the process of finding the ultimate car for your needs. Check out this overview of the best used car websites in Ontario.

    1. Clutch

    Clutch grew out of the frustration of its founder, Stephen Seibel, to buy a car from a dealership in 2016. He set out to reinvent how Canadians buy cars and the company has thrived.

    Since then, the company has aimed to modernize the used car market with stress-free online car buying experience. On its site, you can explore hundreds of cars, sell your own and apply for financing or warranties.

    2. AutoTrader

    AutoTrader began as a paper publication in 1975 and moved online as the marketplace did the same. It lists tens of thousands of vehicles but you have to sort through them to find the used models. However, it does have a separate section for electric vehicles.

    You also sell your car on this platform and read endless reviews and advice. All the cars, trucks and SUVs appear in one menu, so you sort through options by make, model, location and other filters. It also operates Auto.ca and its francophone sister site AutoHebdo.net.

    3. CarGurus

    CarGurus began in the United States in 2006 when TripAdvisor co-founder Langley Steinert saw an opportunity in the automotive aftermarket. The company has since expanded to Canada and the United Kingdom.

    Its separate new and used car listings arise from data-based insights on car pricing, dealer reputation and vehicle history. For used vehicles, it calculates fair retail prices based on comparable current and previous car listings in each market. The CarGurus Instant Market Value factors in millions of data points including make, model, trim, year, mileage, options, location and vehicle history. From this calculation, it rates the quality of the deal from great, good, fair, high or overpriced. 

    4. Kijiji Autos

    Kijiji sells everything but it created a stand-alone site just for cars. Known for making transactions quick and simple, it applies the same principles to KijijiAutos.ca

    Its filters allow you to choose your make, model, maximum price and highest acceptable mileage. You can also decide if you want to buy from a dealership or a private individual. 

    Its ease of use works well for a less experienced car shopper. For more experienced car enthusiasts, you can easily link to listings for tires, auto parts, services and recreational vehicles.

    5. Facebook Marketplace

    Facebook added its Marketplace in 2016, leveraging its Messenger function for buyers and sellers to communicate.  It operates a separate category just for vehicles, with individuals’ listings mixed in with sponsored ones. As of January 2023, Facebook Marketplace stopped allowing operators of business pages to sell vehicles on its platform.

    When listing here, you can set minimum and maximum numbers for price and mileage. You also have the option to choose a range of years, then the make, model, body style, transmission type and interior and exterior colours. When meeting a potential seller, Facebook encourages you to meet in a public area for your safety.

    Inspecting the Used Car

    Before purchasing a used car, make time to inspect it thoroughly. That way, you won’t end up with any surprises that cause extra headaches or bills. You can undertake this yourself or tap into the expertise of a trusted friend or professional.

    Exterior and Interior Inspection

    Start by examining the exterior of the car for any scratches, dents or rust. Any dings could lead to problems if the paint no longer protects the frame from tough Canadian winters. Any lack of care on the outside could reflect neglect of other parts of the car, such as the engine.

    Further, check the tires for wear and tear and ensure they are inflated properly. Additionally, inspect the interior of the car for any signs of damage or wear. Address any complaints with the seller to give them a chance to reduce the price or fix the issue.

    Mechanical Inspection

    A trained mechanic can evaluate the car’s engine, brakes and other components to identify any potential issues or forthcoming repairs. These inspections generally take an hour and cost between $100 and $150. To find a trustworthy mechanic, check with Car Help Canada or the Automobile Protection Association. These consumer protection groups encourage you to invest in a pre-purchase inspection before buying. 

    Any licensed inspection station will provide a safety standards certificate to prove the vehicle can safely travel on public roads. This can save you money in the long run as it catches any problems before they turn into expensive repairs.

    Test Driving the Car

    Take the car for a proper test drive and pay close attention to its handling, acceleration and braking capabilities. Ensure the car feels comfortable and suits your driving needs. Don’t rush this process. 

    Instead, invest 30 minutes or more to listen for strange noises, sense unusual vibrations and check for blind spots. Make sure you can reach the radio, major gauges and mirror controls without leaning uncomfortably. Once out on the road, try accelerating, braking, passing and merging to see if the car has the power you need.

    Negotiating the Best Price For Your Used Car

    Buying a car ranks as a major milestone,and a daunting task, especially when it comes to negotiating the price. This number is often negotiable, so walk in with an understanding of its market value and a willingness to negotiate. Next, we will discuss some tips and tricks to help you get the best price for your desired car.

    Understanding the Market Value

    Most importantly, before negotiating the price of a used car, research its market value. You can do this by checking online car marketplaces, such as CarGurus or Kelley Blue Book. That way, you can determine the average price of your desired make and model, with or without any additional features or upgrades. This will give you a better idea of a fair price range and help you negotiate with confidence.

    It’s also a good idea to research the history of the car, such as accidents or previous owners, as this can affect its value. You can check the car’s history report on websites like Carfax or AutoCheck. Also, make sure the seller is the legally registered owner and the vehicle identification number (VIN) matches the one on the owner’s permit.

    Tips for Successful Negotiation

    When negotiating the price of a used car, remain confident and assertive. Don’t hold back questions or make counteroffers. Moreover, consider any essential repairs or maintenance and factor that into your negotiation. If you don’t like negotiating in person, you can also work through details through email or over the phone.

    First, offer a slightly lower price than what you’re willing to pay, as this gives you room to haggle. However, stay willing to compromise to close the deal. For example, if the seller won’t budge on the price, you can ask for additional features or upgrades to seal the deal.

    Completing the Purchase of a Used Car In Ontario

    Once you’ve reached a fair price and settle on the condition of the car, it’s time to complete the purchase. However, before you hand over your hard-earned cash, keep these few things in mind.

    Required Documentation

    Now, it’s time to complete the paperwork. Ensure you have all the required documents to transfer ownership. This includes the bill of sale, safety certificate and registration papers. Make sure that all of the information on the documents is accurate and up-to-date.

    As for the bill of sale, it must include the vehicle identification number (VIN); make, year and power source; body type, colour and model; purchase price and taxes collected. You’ll also need the name, address and signature of the current owner, car dealer or leasing company (seller), their address and date of sale.

    Additionally, you should check to see if the vehicle has any outstanding liens on it. You can do this by contacting the Personal Property Security Registry in Ontario.

    Vehicle Registration and Insurance

    Once you’ve purchased your car, you’ll need to register it with the Ministry of Transportation. The registration process varies depending on where you live, but typically involves filling out a form and paying a fee.

    Within six days of the purchase, you must register your name as the new owner of the vehicle at a ServiceOntario centre. So, bring along your:

    • proof of insurance
    • Ontario Driver’s Licence
    • used vehicle information package 
    • bill of sale 
    • Safety Standards Certificate 
    • owner’s permit 
    • completed Application for Transfer
    • odometer reading information

    Likewise, you cannot drive a car away from its previous owner until you’ve insured it. When it comes to car insurance in Ontario, always shop around for the best rates. Legally, you must carry $200,000 of third-party liability in case you have a serious crash. As you compare car insurance rates, consider your driving record, the type of car you’re insuring and the amount of coverage requested. That includes additional coverage options, such as collision or comprehensive coverage. Don’t be afraid to ask for discounts, such as multi-car or safe driver discounts.

    Completing the purchase of a used car from a private seller in Ontario

    While some private sellers will treat you well, you always run the risk of getting ripped off. Therefore, you can take several steps to protect yourself from scammers. First, research the person selling the car by asking for ID, verifying it online and cross-referencing with repair bills for the vehicle. 

    Next, collect the serial number on the door jamb sticker or on a metal plate on the dash. Type it into the Ontario website for emissions testing to see if it has passed recent screenings. Also run the number through a collision repair verification service, such as CarFax. If something suspicious pops up, call a manufacturer’s dealership and ask the service department to run the number through its database. They can only tell you if the vehicle was written off in a collision or if the warranty was ever voided.

    Always follow your gut if you think the seller pushes you too hard to act quickly. And finally, when buying a used car in Ontario, request a Used Vehicle Information Package for full documentation.

    Buying a Used Car in Ontario: The Bottom Line

    Buying a used car in Ontario can be a great way to save money and get a good value for your purchase. With the right preparation and knowledge, you can make an informed decision and avoid any potential pitfalls. Use this guide to help you through every step of the process and happy car hunting!

    Arthur Dubois is a personal finance writer at Hardbacon. Since relocating to Canada, he has successfully built his credit score from scratch and begun investing in the stock market. In addition to his work at Hardbacon, Arthur has contributed to Metro newspaper and several other publications