Experts say you need to set a budget and do your due diligence when buying a used car. There are several things to look for, including using websites like CARFAX that have vehicle histories. Richard Lautens/Toronto Star file photo
Although prices have decreased since the peak of the pandemic, the used car market remains strong. Experts share tips for navigating this hot market effectively.Before the pandemic, many consumers chose used cars as a more affordable alternative to new vehicles. While prices have dropped since then, used cars are still in high demand. To get the best deal, experts advise starting with a clear budget.
Dan Park, CEO of the online used vehicle marketplace Clutch, and Callum Caughey, CEO of Oakville-based Toronto Car Experts, recommend setting a budget first. In February, the average price of a used car in Canada was $38,451, a 2.1% drop from February 2023, according to Autotrader.
Some vehicles, particularly those under $25,000, are becoming rarer as manufacturers phase them out, making now a good time to buy if you’re looking for a budget-friendly option, says Park. Additionally, the used Tesla market is booming, with Tesla Model 3s available around $30,000.
To avoid pitfalls, it's crucial to check a vehicle’s history. Obtaining a CARFAX or Used Vehicle Information Package (UVIP) will provide details on service records, previous owners, and any accidents. “Accident history can significantly impact the value of the vehicle,” notes Caughey. He adds that hidden damage might exist if the car has been repainted. Park agrees, saying that an accident can reduce a car’s value by 20-30% of the damage cost.
Mileage is another key factor. Higher mileage often means more wear and tear, according to Vaso Stojanovic, a mechanic at Toronto-based Peter’s Garage. Be prepared for minor repairs on cars with over 100,000 kilometers. Caughey warns that odometers can be tampered with, but a CARFAX report can reveal mileage discrepancies.
Negotiation is a powerful tool in the used car market. Factors like mileage, condition, and the time a vehicle has spent on the lot can give you leverage to negotiate a better deal. Understanding the true cost of financing, including add-ons like extended warranties and tire protection, is essential. Park advises against being misled by monthly payment quotes from dealerships and emphasizes looking at the overall financing cost. A high credit score should prevent you from paying excessive interest rates.
When considering a trade-in, use price comparison websites to ensure you’re getting a fair deal. “You might think you’re getting a great price on your new car, but if you're lowballed on the trade-in, the dealership is making up the difference,” Park explains.
The experts unanimously stress the importance of thorough research. If you're not knowledgeable about cars, bring a friend who is, or hire a professional service to inspect the vehicle. "Due diligence is crucial," says Caughey. This thorough approach helps ensure you get a reliable used car and a fair deal.
