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Buying a used car is a much cheaper way to obtain a newer vehicle without purchasing a car that is brand new. 

Process of Buying a Used Car

Buying a used car does pose a greater risk to buyers and it can be a long process. There are some very important steps you can take to help you make the right decision. These steps include:

  • Choosing the right vehicle
  • Set your budget
  • Do some vehicle research
  • Begin your search
  • Decide if you are going to buy privately or through a dealership
  • See the vehicle in person
  • Take it for a test drive
  • Carefully read over all documentation pertaining to the vehicle
  • Begin the purchasing process
  • Select a payment option
  • Complete paperwork
  • Obtain car insurance
  • Register your ownership
  • Obtain license plate and sticker

Choosing The Right Vehicle

If you are buying a used vehicle you are more than likely looking for ways to save money. Choosing a vehicle that meets your needs both personally and financially is a good decision. Small hybrid vehicles are more economical on fuel and are easier to drive and park. However, if you have a family you may want to consider a small SUV. Choosing a vehicle that is insurance friendly is also a wise idea. 

Setting Your Budget

When you are buying a used vehicle it’s not just the price of the vehicle you have to take into consideration when setting your budget. You should estimate what the operating costs of the vehicle will be. Operating costs include car insurance, fuel, maintenance, and depreciation. Vehicles with a lot of electronic options tend to cost more for repairs.

Research Vehicles


Once you have set your budget you are ready to do some research on used vehicles. Look at models that fall in your price range and meet your personal criteria. There are websites available that will provide you with detailed information about every vehicle being sold. There are also websites available that will provide you with specific information on vehicle depreciation, and the approximate cost for repairs. Some of these websites are Car and Driver, Consumer Reports, Kelley Blue Book, and Edmunds.

Begin Your Search

There are various ways to look for a used vehicle such as 3rd party websites such as Auto Trader and Kijiji, classified ads and dealerships. 

Decide If You Are Going To Buy Through a Dealership or Privately

There are several differences between buying through a dealership or buying privately. There are pros and cons to each method. 

Visual Inspection of The Vehicle

Before you sign any paperwork, make sure you thoroughly inspect the vehicle for damages inside and out. 

Take The Vehicle For a Test Drive

When you take the vehicle for a test drive it presents the opportunity to ensure the vehicle is in proper working order. If purchasing privately and the owner will not allow you to take the vehicle for a test drive this can be a red flag.

Begin The Purchasing Process

Once you are satisfied with your visual inspection, documentation, and test drive you can begin the purchasing process. Use the information you researched pertaining to the make, model, year, and condition of the vehicle to negotiate the price. 

Payment Options

Decide on financing or buying the used vehicle outright. Leasing is typically not an option for used vehicles. 

Complete Paperwork

The seller must complete and provide the Used Vehicle Information Package. Both parties sign the vehicle permit, the buyer must receive a bill of sale from the seller. 

Obtain Used Car Insurance

Once you have completed your sale you must contact your insurance provider BEFORE you can drive the vehicle to ensure coverage. 

Register Your Ownership 

You must register ownership of the vehicle with the government, in order to do this, you must provide proof of car insurance. 

Obtain Licence Plate and Sticker

Registration Plates on the Wall

When you register your ownership you will also require licence plates and a valid sticker. This can be obtained from the Ministry of Transportation or through the dealership. 

Carefully Read Over All Documentation Pertaining to The Vehicle

Ensure you read over the Used Vehicle Information Package, Safety Standards Certificate, and Ontario Drive Clean Emissions Test if applicable.  

Is It Cheaper To Insure A New Or Used Car?

Typically, it is cheaper to insure a used car as the depreciated value is lower. 

What Are The Cheapest Second-Hand Cars To Insure?

The list will change each year. Here is an example of a list for Ontario:

  1. Volkswagen Golf
  2. Kia Soul
  3. Volkswagen Jetta
  4. Toyota Camry
  5.  Honda Accord
  6.  Hyundai Elantra
  7.  Kia Forte
  8.  Mazda 3
  9.  Toyota Corolla
  10.   Honda Civic

How Does Insurance Work When Buying A Used Car?

Buying insurance for a used car works much the same as buying insurance for a new car. The value, condition of the vehicle and you’re driving history is a few factors insurers will access. Used car insurance is typically cheaper. 

Do I Need Collision Insurance On An Older Car?

Depending on the value of the used vehicle you may or may not require collision coverage on a used vehicle.

The Pros and Cons of Buying Used Vehicles Privately Versus Dealership


There are several pros and cons of purchasing both privately and through a dealership.

Pros of Buying a Used VehicleThrough a Dealership

  • Used vehicles at dealerships are usually detailed and repaired prior to sale
  • Dealerships will be more honest about the details of the used vehicle as they have to abide by certain legal and industry rules and regulations
  • Dealerships have a wide variety of used vehicles on their lots
  • Dealerships sell certified pre-owned vehicles and may come complete with some manufacturer warranties
  • Dealership can provide a more detailed and accurate report on the vehicle’s history

Cons of Buying a Used Vehicle Privately

  • The vehicle is sold “as is”, any mechanical issues will become your problem once purchased
  • Higher risk of being scammed through a private seller
  • Limited selection when purchasing privately
  • Private sellers do not have pre-owned certification used vehicles
  • Private sellers do not have access to CarProof and cannot provide detailed and accurate reports on the history of the vehicle.

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