If you are looking to buy a used car you need to be very careful and follow certain steps, to ensure that you do not get scamed or cheated. There was this one instance, wherein someone bought a used car from a private seller for a very good price. It was too good to be true for her.
In a few weeks time, she was shocked to find out that there was a lien of $30,000 put on the car by the previous seller. The creditor was now coming after the car because of default on the loans amount made by the previous seller. The seller had borrowed a loan using the car as collateral which means in case of default on repaying the loan amount, the creditor can actually come and claim the car as set out in the agreement between the seller and the creditor. And now, she the buyer could not do anything about this problem.
This is why it is so important to complete all the steps carefully and diligently without rush and ensure no shortcuts on your part, otherwise you would have to live with this regrets for the rest of your lives.
Below are the recommended steps and Guides on safely purchasing a used vehicle in Canada (All provinces have similar steps but not exactly same):
BEFORE YOU BUY:
1. Request for a used vehicle information package which will tell you, if this vehicle have lien or debt registered on it by the seller. The seller needs to provide this information upon request. In rare cases, you may need to purchase the used vehicle information package on the vehicle you are considering buying.
2. Do not feel shy to ask for the vehicle history such as the maintenance record, accidents damage, change of ownership in the past, any mechanical problem the vehicle may have currently. Usually these information are not straightforward because most owners do not keep a proper record of the maintenance and complete history of the vehicle.
3. In order to ensure the seller is the actual owner of the vehicle, you can cross check his owner's permit with his Photo ID drivers license.
4. Check to see the V.I.N (Vehicle identification Number) matches the number listed on the owner's permit.
5. Request the seller to provide you with the results of the most recent drive clean emissions test. This is required to ensure that the potential vehicle is not creating pollution problem which could result in you having to pay a fine to city authority. Failing the emissions test also means that there are bigger underlying problems with the vehicle and you should perform some more checks to see if the vehicle is worth buying.
6. If you are not expert in looking for damages or problems with a vehicle, it is always advisable to bring along a car mechanic friend to perform a detailed check on the vehicle. The car mechanic can catch any serious problem which you may not have the expertise to do so. You may have to pay some money for the car mechanic to come and do the vehicle check unless of course, if you have a friend who happens to be a car mechanic.
7. It is very important that you do a test drive on the vehicle. You will be surprised how much you can learn about the vehicle just by test driving the car. Often you can negotiate for a better price deal if you find some problems that was not mentioned by the seller.
AT THE TIME OF BUYING:
1. You will get a used vehicle information package from the seller. Look for any lien or debt which may be on the vehicle. In case of any debt or lien on the vehicle, refuse to proceed with the buying until the lien or debt is completely cleared. You may end up having to pay for the lien or debt on the car if you proceeded to complete the purchase transaction.
2. You will get the bill of sale from the seller which will contain the name of the seller and buyer along with the purchase price. This bill of sale is usually signed and dated by both the seller and the buyer.
3. You will get a completed vehicle portion of the owner's permit (Green color document for Ontario). The back of the document is where the information are filled and completed for you and the seller to both sign and dated on.
4. You will make payment to the seller to purchase the car using certified cheque paid to the seller's name(Considered equivalent as cash). Try not to pay in cash because there will be no proof of payment in case of any dispute.
This will protect both the seller and buyer. Buyer will have proof of payment and seller will have guaranteed payment from the certified cheque. Personal cheques will not be accepted as most cases scammers and fraudsters will have the personal cheques bounced back.
AFTER YOU COMPLETE YOUR CAR PURCHASE:
1. Once the purchase transaction is completed and all the revelant documents has been received, now it is time to register your car under your name as the new owner. You will have about 6 days to submit your registration application.
2. You have to provide certain documents to the vehicle registration service centre in your local area:
* Your drivers license.
* Bill of sale documents provided by the seller.
* Used vehicle information package also provided by the seller.
* Owner's permit with the completed application for transfer portion on the back of the document. (Green in color in Ontario)
* Odometer reading (Can be found on your car dashboard)
* Safety standards certificate (This can be obtained from any car mechanic)
* Proof of car insurance (Shop around for car insurance company and ask final insurance company to provide you with proof of car insurance paper, through paper mail or printouts from emails)
* Buy a new license plates for front and back of the vehicle (Physical metal plate). Sellers do not give you their license plate because license plate follow the driver and not a vehicle.
* Buy a "license plate stickers" usually for one year or two years. (Do not confuse this with the metal license plate that you put on front and back of vehicle). "license plate stickers" are stuck onto your new back metal license plate on the "Upper right corner". Sometimes this stickers are also known as "Road tax fees" paid to the government for using the road by the car owners.
