How do I purchase a used car from a private seller and have the car ownership transferred to my name after the transaction? How safe is it to buy a used car from a private seller compared to purchasing from a used car dealer?

Question

Buying a brand new car of course would be a good choice for anyone, but for me, I can't afford to spend that much money on Cars. I would rather buy a used car, even if it meant having to spend more on repairs and maintenance. Some people suggested buying from someone I know like a relative but none of them are selling their car for now and I needed to buy one now.

I have heard about the danger of buying used car from strangers since we don't know anything about the history of the car. Someone told me a story about how one guy purchased a used Mercedes Benz car and he was pleased with it at first. But then later, he started to get this strange bad odour coming from somewhere in his Mercedes Benz car. He went to the full detail car wash place and had his entire interior of his car washed completely. Even then, that same smell and odour was coming mysteriously from somewhere.

Finally someone suggested to call up the private seller and ask him what the smell was and where was it coming from. It turned out that the seller's father had passed away in that same car for several days before being found. That was the reason why the strange bad odour was still coming from inside the car. So the guy after hearing this, he got rid of the car by junking it.

The same danger is for the seller as well. It happened in the news where a private seller was offering his pickup truck for sale. Two men showed up at his place interested to buy the pickup truck. Those two men wanted to test drive before buying, so the seller went with them too. Somewhere in the middle of some dirt road, that two men, shot and killed the seller, then drive away with the pickup truck.

This is why I like to know the safest and the best way to buy a decent used car. The world isn't safe anymore and precautions needs to be taken when it comes to buying and selling privately.

Answer 1

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.

Answer 2

Watch YouTube videos on "Some things to consider when buying a used car from a private seller. You will be surprised how much you will learn about the car, just by following some simple steps":

Answer 3

How i purchased a used vehicle from a used car dealership in Toronto in one week.

If you have never bought a used car before, it can be quite hectic to start off with. There are just so many things you have to look out for and many questions swirling in your head, without any straight answers you can find.

Luckily i have listed my experience and the steps i have taken to ensure my purchase of used vehicle went smoothly:

1. First of all, search for the type of car you want to drive such as "Pickup Truck, Minivan, SUV, Sedan, two doors Sports cars, Vintage or Mini cars". They all have their advantages depending on your preferences.

2. Pick the type of Petrol Gasoline, Hybrid, Diesel fuel, or the full EV Electric Cars. Of course EV Electric cars are more expensive in the short term but if they do last long enough, it is worth the money. 

3. Choose your favorite car brand. Examples of car brands in Canada are Toyota, Acura, Honda, Lexus, Lincoln, Volkswagen, Subaru, Mitsubishi, Dodge, Ram, Jeep, Chrysler, Ford, Kia, Hyundai, Mercedes Benz, BMW, Range Rover, Hummer, Mazda, Nissan, Volvo.

4. Do a search on "Google Search" to look for your preferred brand of used car dealership in your local area.

5. Arrive at your local dealership and check out some of the displayed cars. Some dealership will allow for a test drive of their displayed cars. In my case, i had to pay a deposit of $500 as commitment to buy the used car i like, in order to test drive it. The $500 deposit was refundable if i dislike any of their car. 

They said the deposit was because of extra work they have to do to get the car ready for test drive, since some of their cars are parked at location where a tow truck is needed to bring that particular car, from its elevated higher parking space like on top of the elevated concrete block platform. I totally understand their concern but you can refuse to give them the $500 deposit and walk off to another used car dealer.

6. I test drived an Acura MDX SUV i liked and also paid the $500 deposit they asked for. I made sure to check everything out carefully about the SUV Car and also inquired about the "Carfax" report which simply mentions, if that car had been in an accident before or not, and what type of accident it was involved in. Mine only had the windshield broken before, and had been repaired, and nothing else. 

7. You now have the option of having that used car to do a "Safety standard check certificate" by your mechanic for around $200 if the dealership allows it, or usually the dealership has relationships with some of their mechanics who will do the "Safety Standard Check" for you. The dealership price charge of doing that Safety Check however is much higher @ $1000.

I opted for their $1000 "Safety Standard Check Certificate" because i couldn't get my mechanics to do the check for me and the dealership was insisting that i go through with their mechanics.

This step is important because it is required at the time when the dealer will be obtaining a new license plate number for you from "ServiceOntario" centre.

8. The dealership will offer you 1 year warranty for any major engine, transmission, rack and pinion, drive train and other parts and labours for another $1000. If you feel that the used car you picked won't have any major problems, then you can leave out their offer protection plan. 

I chose their 1 year warranty plan as i didn't want to have to deal with expensive repair if anything major problem happens. If it was a brand new car, i might not take any warranty. But because it was a used car, i decided to play it safe.

Keep in mind though that this warranty is provided by another 3rd party company, and so if any warranty problems and issues arises, you will to deal with this 3rd party company, and it is not the dealership's responsibility for warranty problems.

9. The dealership will also offer to register the used car under your name and get a new license plate for you for about $60 from the "ServiceOntario" centre. You do not get to choose your own preferred license plate number. If you want personalised plate number then you will have to go to "ServiceOntario" Centre on your own and pay $350 for custom personalized license plate number. The dealership will not help you choose a personalized license plate number.

10. Usually the dealership can get your car ready in 3 or 4 days but some will take a week to do so. 

11. Go to your bank and get a "bank draft" for the amount of price of car, payable to the name of the used car dealership. Remember the GST tax has to be added to the displayed price of the vehicle you chose. So make sure the "Bank Draft" amount you make includes the total final price with GST tax. 

12. Some car dealerships will offer you financing help for your car loans need but understand that it could actually be cheaper, if you borrowed money from your bank line of credit instead. The dealership uses 3rd party loan company for financing the vehicle for you and the dealership also takes a cut of their commission for loan financing by 3rd party. 

In my case, i borrowed line of credit from my bank for much lower interest of 10%, instead of 20% provided by dealership's 3rd party loan company. 

13. Collect your used car on the day the dealership mentioned and there you are done with your car purchase. Enjoy your new ride!