Before making any big purchase, it’s wise to do your homework.
Used cars are no exception.
Unlike other assets, a car is typically an expense as opposed to an investment. But if you do your research and consider your needs, you can choose from the best used cars to buy while saving money. Below, you can find a lot of tips for buying a used car.
Should I Buy a Used Car?
There is a clear tradeoff when buying a used car. While there are big savings to be made with a used car compared to a brand new car, there can be uncertainty about the car’s condition and functionality.
It’s hard to determine a used car’s health status without expert help, and older cars aren't quite as reliable as brand new cars. It all depends on what you buy and who you buy from, so it requires a little bit of homework. Luckily, we’ve compiled this resource to help you make the right decision.
Advantages of Used Cars
- Used car prices. Pre-owned car prices are certainly lower than new car prices, and if you do your homework, you can find a cheap used vehicle for excellent value.
- Certified Used Cars. Automakers and dealerships can certify the dependability of vehicles. Certified vehicles offer additional guarantees about the condition of the vehicle, so you can enjoy the peace of mind of a reliable car without the brand new price tag.
- Depreciation. The previous owner of the car took the initial depreciation hit. You won’t need to worry about your car’s value depreciating as rapidly.
Disadvantages of Used Cars
- Car Failure. Preowned cars aren't quite as reliable as new cars, and car trouble can be more frequent. But there’s less chance of ending up with a lemon car if you buy from a certified dealership.
- Scams. If you go through a private seller, there’s always a chance you’ll get scammed or ripped off when buying a car.
- Car History. It can be challenging to know what the car’s history is before you buy it. Some vehicles come with up-to-date history reports while others do not.
- Repairs and Maintenance. The cost of maintaining an old car can be more expensive due to wear and tear.
- No Warranty. If you buy your car from a private seller, you won’t enjoy the option of an extended warranty.
What to Check When Buying a Used Car
- Car’s Maintenance Record. Ask the buyer for the car’s maintenance record to gain an understanding of the car’s service history. If this report isn’t forthcoming, you might want to purchase it yourself. This car history report will tell you how well the vehicle has been looked after in the past.
- Inspection Checklists. Second-hand cars (especially private sales) should be fully inspected before being purchased. You can find inspection checklists in magazines, books, and websites that reference used car purchases. Can’t find one? Check out our used car checklist. It can also be worthwhile to have the vehicle inspected by a mechanic before you buy.
- How the Car Drives. Before purchasing a used car, you should test drive the car in various conditions (i.e. highways, hills, and street traffic.) The last thing you want is a car that struggles in certain scenarios and can’t get you from point A to point B!
- Certification. If you buy from a dealer, check that the car is certified by the dealer or manufacturer. Certified cars are often newer models with less mileage.
- Mileage. Generally speaking, the lower the mileage, the better. Cars that have driven further tend to have experienced more wear and tear.
- Cost of Future Maintenance. Every car is different, meaning that the cost and frequency of maintenance will vary. Take some time to consider the future costs and whether they’ll work with your budget.
- Car’s Value. Knowing the car’s value is important for two reasons. First, you need to know if you can afford the car you want. Second, knowing the car’s value is helpful when negotiating. The Canadian Black Book is a good place to start when determining a car’s value.
What’s the Best Used Car For Me?
As with all big financial decisions, you need to consider your personal situation before anything else. What do you need the car for? If you need it to travel long distances, you might want a vehicle that’s fuel efficient. If you’re on a budget, you’ll want the most reliable car you can get at a low price. If you need a family car, you might want to consider something spacious and with a high safety rating.
Below is a list of questions to ask yourself when buying a used car. These questions can help you better understand what type of car you need.
- How far do you need to drive?
- How often do you drive?
- Do you have a family that shares the car with you?
- Does having the newest car matter to you?
- Do you prefer to have a warranty on your car?
- Are you willing to pay for car maintenance and repair costs?
- What does your budget allow?
Dealerships versus Private Sales
In Canada, you can buy a car through a dealership or a private vendor. Both options have corresponding pros and cons.
Do Used Cars Come With a Warranty?
Yes, you can get a warranty on a used car if you buy from a dealership. Every brand new car comes with a manufacturer's warranty. This warranty is supposed to cover the customer against the cost of any defective parts. However, by the time a car finds itself on the used car market, the manufacturer's warranty might be expired. If it’s not expired, some warranties aren't transferable from one owner to the next. This means many used cars do not have a warranty.
If an extended warranty is important to you, you should confine your car search to dealerships. Certified pre-owned vehicles are certified by a manufacturer or dealership. Manufacturer-certified pre-owned cars come with a renewed standard warranty and are usually the most reliable used cars you can buy.
Some automakers and dealerships offer extended warranties too which could be a point of interest. For more information about CPO vehicles and warranties, check out our blog post on certified pre-owned vehicles. With privately sold vehicles, the only warranty you benefit from is the original manufacturer's warranty if it’s transferable and hasn’t expired yet.
Can I Finance a Used Car with Bad Credit?
It is possible to finance a used car with bad credit, but your options might be limited...at first.
Remember that any used car you can get approved finance for is your first step to better options in the future. If you make your payments on time, your credit score will improve, and you can eventually get approved for the car of your dreams! Contact Canada Drives for more information on credit-building solutions.
Is 0% Financing Possible on a Used Car?
Keep in mind that 0% financing offers are usually reserved for those with excellent credit, or extremely close to it! This fact isn’t meant to discourage you but rather to remind you to set realistic financial goals. Having good credit isn’t everything; you can still get a great car at a reasonable rate without exceptional credit.
0% financing for a used car is possible but is extremely rare.
It’s possible to get 0% financing on a used car—you just need to know where to look. Banks, credit unions, and other lenders don’t offer 0% financing on cars, only car manufacturers do. Your research should be centred around car manufacturers. Keep an eye out for their deals and offers.
Find a Cheap Used Car Today!
Cheap doesn’t mean low quality, it means big savings! If a used car sounds right for you, your next ‘pit stop’ is to snag a deal. Fortunately, you don’t need to look far!
Canada Drives works closely with certified car dealer partners and can help you get financing for your next car purchase.
Our strategic partnerships can give you access to many affordable used cars for sale.