One-stop guide to buying a used car

What to look for

When you’re looking at a used car, it’s hard to do a thorough assessment if you’re not mechanically inclined. That’s why a pre-purchase inspection is so important (more on that later).

But even a novice can spot obvious issues. Some problems aren’t dealbreakers on their own but may require additional investment after you buy; it’s up to you whether that’s acceptable. A car with many minor issues might still meet your needs, but such issues suggest the owner has been neglecting maintenance, and larger issues could crop up soon.

Unless you’re really bargain-bin shopping, it’s usually best not to buy a car with noticeable issues, because it’ll end up costing you money in the long run. An exception would be if the car is cheap enough that you can pay for repairs and still stay within your overall budget.

Don’t skip the test drive — some problems are impossible to discover without turning on the engine and going for a spin. If the seller won’t let you test-drive the car, walk away.

Whether you buy from an individual or a dealership, the process looks similar. One difference is that buying from a dealership comes with certain consumer protections.

“Buying from a registered dealership is a good first step because you have consumer protections in place if a problem … were to occur because the dealership could be held responsible,” Car Help Canada’s Shari Prymak told CBC News.¹

Here are the things you should check before buying a used car:

Under the hood

• Hoses. The hoses should be free of cracking or bulging. If you squeeze them (make sure they’re not too hot), they should feel firm — not hard or brittle, but not squishy either. Hose clamps should be tight and free of damage. Of course, most hoses are easy enough to replace.²
• Belts. Check the belts for cracks. Some belt replacements are relatively easy and inexpensive. If the vehicle has a timing belt, rather than a timing chain, find out when it was last replaced (if it ever was). This belt is behind a cover, and you won’t be able to see it. Depending on the vehicle, timing belts should be serviced every 100,000 to 150,000 kilometres — and doing so can be expensive.³
• Engine oil. Use the dipstick to check the engine oil. The oil should be amber or brown in colour, not black. It certainly shouldn’t have any particles in it. It also shouldn’t look milky, which is a sign of coolant leaking into the engine. That can be a serious and expensive repair.⁴
• Other fluids. Look for signs of fluid leakage around the bottom of the engine and underneath the car. Check the levels of the brake, coolant, transmission, and power steering fluids. Low fluid levels could mean leaks (or at least a neglectful owner). Smell the transmission fluid when you check it. If it smells burned, there may be a serious issue with the transmission.⁵
• Battery and wiring. The battery connections should be tight and free of corrosion. Have a look at the wiring as well, and take note of any damaged wires. Ideally, the battery should be no more than five years old. But, batteries are easy to replace after you’ve bought the car if the electrical system itself is in good shape.

Exterior

• Rust and corrosion. Rust anywhere isn’t great, but on old vehicles it’s often unavoidable. Small spots of surface rust are usually no cause for concern, but widespread rust (especially on frame or engine components) should be a dealbreaker.⁶
• Paint. The body paint should be a uniform colour; mismatched panels indicate that the vehicle was in a collision (which is fine if the owner disclosed that fact and there are no other issues).
• Tires. Make sure all four tires are the same. Check that there are no missing lug nuts or hub caps. A quick and easy test for overworn tires is to use a toonie. Insert the coin into the tire treads; if the treads are shallower than the silver band on the coin, they’ll need to be replaced soon. Check all of the tires for uneven wear, which can potentially indicate problems with the steering components.
• Underbody. Inspect underneath the car for any sign of fluid leakage. Not just the engine, but the shock absorbers and brakes as well. A small amount of leakage on the shock absorbers may be okay, but significant leakage means they’ll need to be replaced.⁷ Any brake fluid leak is a red flag. Not only can it mean an expensive repair, but the vehicle may not be safe to drive.
• Lights. Check the headlights on each setting, from daytime running lights to high beams. Test the brake lights and turn signals as well.

Interior

• Cosmetic damage. Check all throughout the cabin for wear and tear or damage. Look for tears or worn fabric on the seats and cracks in the dashboard or door trim. It’s up to you whether you care about cosmetic issues, but you should identify them nonetheless. Check for musty or mouldy odours, which could indicate water damage. Lift a corner of the carpet to see if there’s rust or water damage on the floor.
• Seats. Make sure the front seats move all the way back and forward, whether they’re manual or power-adjustable. Make sure they lock in place, and that all the seatbelts are in good shape and buckle securely. If the rear seats fold down or tumble forward, make sure the mechanism works properly.
• Spare tire. If the vehicle is equipped with a spare, make sure it’s there and in good shape, along with the jack and lug wrench. Some vehicles may not have a spare, so check if there’s an emergency tire kit which would have come with the vehicle when it was new.
• Systems. Test every system in the car: air conditioning, heating, windshield wipers, windows, power mirrors, interior lights, and so on. Do they all work as expected? Are there any odd noises, especially from the fan? If you start the car, do all the gauges work?
• Mileage. Check the odometer reading. Does it seem to match the vehicle’s age and degree of wear? The average car in Canada is driven about 15,000 kilometres per year.⁸ When you get a vehicle history report (explained further down), it will often include previous odometer readings for comparison.

Test drive

• Noises. Start the car. Are there any weird noises, like squeals, pops, or hisses? When you put the car in gear, does it shift smoothly or clunk? While you’re driving, do you hear any clunking or creaking from the suspension? What about knocking sounds from the engine that worsen at higher engine speeds? Any of these unwanted noises can mean serious (expensive) issues with the car. Consider any rattling noises from the interior as well. They might not be serious problems, but they can get very annoying.
• Suspension and steering. As you’re driving, pay attention to the suspension. If you hit a bump, the car shouldn’t bounce up and down too much. When the steering wheel is straight, the car should go straight. If you let go of the steering wheel, it should stay straight and not pull to either side. Go to a parking lot and try turning in tight circles, paying attention to any rubbing or clunking. In general, the car should feel smooth, with no wobbling or undue vibration on smooth roads. Make sure the vehicle sits flat, not tilted forward or backward.
• Brakes. Test the brakes thoroughly, including some heavy braking. The brake pedal should feel firm and consistent, with a steady increase in resistance as you press harder. A pedal that feels loose or spongy, or that rumbles when you depress it, is a sign of brake issues.⁹ If the car pulls to one side while braking, there’s something wrong with the braking system that will need immediate attention. Open the window and listen. When you apply the brakes, you shouldn’t hear unusual noises such as grinding, thumping, or rattling, or squealing that continues after the first couple of applications. If you hear a consistent squeaking sound that stops when you press the brake pedal, it indicates that the brake pads are worn.
• Exhaust. A little bit of white exhaust after the engine is started is normal, especially in cooler weather, as it’s just condensation. If the white exhaust is heavy and it doesn’t go away, that could indicate the engine is burning coolant. Blue smoke suggests burning oil. You might get a puff of black smoke when accelerating with an older diesel engine, but a newer one shouldn’t do that; and in a gasoline engine, it’s a sign of burning too much fuel.¹⁰

Paperwork

• Vehicle history report. A full vehicle history report includes a list of insurance claims made for that vehicle, registration history, the title (rebuild, salvage, etc.), a lien search, and sometimes odometer records.

  “Check the odometer readings, check the mileage readings on the report, to make sure that they make sense,” said Prymak. “Make sense for the age of the vehicle, and match what the odometer rating of the vehicle is.”¹

  You can buy a full report from CARFAX Canada for $60–80, depending on how detailed you want it to be.¹¹ In some provinces, you can request similar reports from the government or from the province’s public car insurer (if there is one). In Ontario, the seller of a used car must provide a used vehicle information package, which contains much of the same information.¹²

• Registration documents. Whether or not you get a vehicle history report, check the vehicle’s registration documents to confirm the seller is the legal owner.
• Lien search. If a car has a lien on it, it means someone other than the owner has a financial interest in it. For example, a bank that has issued a loan secured by the car. If you buy a vehicle that has a lien against it, and the person who took on the loan doesn’t pay it, your car could be repossessed to cover it. Never buy a vehicle until you have written proof that the lien has been paid and the vehicle is clear.

  If your vehicle history report doesn’t include a lien search, get one separately. You can check liens through provincial government services. Keep in mind that a car could have liens in more than one province — another reason that knowing its registration history is important.¹³

• Service history. Not every seller will have records of the vehicle’s service history, especially if it’s had multiple owners. If they do, it’s worth a few bonus points on the “should I buy this car” scale. The vehicle history report may include the service history, but these are often incomplete.
• Car insurance. You can’t buy car insurance until you buy the car, but you will need insurance before you can drive it. If you already have a policy for a different car, you may have a short grace period during which the policy will cover your new car — check your policy wordings. In any case, have a plan for insuring your new vehicle. You can get a car insurance quote before you buy to estimate your insurance costs. We’ll get more into car insurance further down.

14 questions to ask the seller

You can learn a lot about a used car by speaking with the seller and asking the right questions. Hopefully, they’re honest, but a few of the right questions can help suss out dishonest sellers. Of course, even an honest seller might not know all the answers.

If possible, ask questions by phone before you even look at the car. You might be able to save yourself a trip.

1. Can I take it for a test drive? (If the answer is no, you’ll want to move on right there.)
2. Could I take it to a mechanic for a pre-purchase inspection? (Again, refusal to allow this might disqualify the car.)
3. For how long have you owned it?
4. Who were the previous owners?
5. Was it ever registered in another province?
6. Why are you selling it?
7. Are you aware of any issues?
8. Are all the interior features (audio system, A/C, power windows, etc.) functioning properly?
9. Is there any existing unrepaired damage?
10. Was the car ever involved in a collision?
11. What repairs or replacements have you had done? Do you have invoices? (If the car has a timing belt, ask about that specifically.)
12. Are there any modifications?
13. Is the car still under warranty? (For vehicles not older than five years or so.)
14. Do you have a set of winter tires to include with the sale?

Pre-purchase inspections

If you aren’t a car person, a pre-purchase inspection by a trusted mechanic can be invaluable. Even if you prefer to handle maintenance yourself, it’s a good idea to hire someone with the right equipment to give it a thorough lookover. A pre-purchase inspection can catch all the potential mechanical issues listed above, plus more.

Most mechanics offer an inspection package for used vehicles.

Find a mechanic before viewing a used car. Once you know you’ll be looking at the car, make an appointment for the inspection, possibly even during your test-drive. Depending on the seller, they may wish to come with or possibly drive to the mechanic themselves. Some mechanics offer mobile inspections, where they’ll come to you.

Be cautious if the seller says the vehicle has already undergone a pre-purchase inspection and doesn’t need another one. It may be perfectly legitimate, but it may also be someone who paid an unscrupulous shop to write up a false report.

Provincial registration inspections

Most provinces require out-of-province vehicles to pass an inspection before they can be registered. If you buy a vehicle from another province, you will likely need to have it inspected. Sometimes, you’ll need a used vehicle inspection even if the car isn’t from another province.

However, be aware that the provincially required inspections are not the same as pre-purchase inspections. They focus on the vehicle meeting the province’s minimum safety requirements. They will catch issues that affect safety, but they won’t provide a comprehensive report on the vehicle’s overall condition as a true pre-purchase inspection will.

Keep in mind that you usually need the inspection certificate before you register the car or obtain licence plates, depending on the province. Either way, if you’re buying a used car that will require an inspection, make sure a passed inspection is a condition of the sale.

Here are some of the provincial inspection requirements:

• British Columbia: vehicles from outside BC must be inspected before being registered, with some exceptions under the New West Partnership Trade Agreement (NWPTA).¹⁴
• Alberta: vehicles must pass an inspection before being registered in Alberta for the first time.¹⁵ Additionally, any used vehicle sold by a dealership must pass a fitness assessment.¹⁶
• Saskatchewan: a vehicle that was previously registered outside Saskatchewan must pass an inspection before being registered in the province.¹⁷
• Manitoba: all vehicles must pass an inspection before being registered to a new owner, with a few exceptions for transferring vehicles between family members or businesses.¹⁸
• Ontario: all used vehicles require a safety standards certificate when being transferred to a new owner, except for a vehicle transferred to the owner’s spouse. The mandatory used-vehicle information package will state whether the car needs this certificate.¹⁹
• Quebec: all used vehicles from outside the province must pass a mechanical inspection, as must vehicles that have been stored for 12 months or more — something to keep in mind if the car has been sitting around.²⁰

Sales tax implications

Almost without exception, you’ll have to pay provincial sales tax when you buy a used car — even through a private sale. You’ll also pay GST if you buy from a tax-registered business, such as a dealership.

If you buy from a dealership, they’ll collect the sales tax at the time of sale. If you buy from a private seller, you’ll pay the sales tax when you register the car.

In either case, there is no way to avoid paying sales taxes when buying used vehicles (unless you live in PST-free Alberta or the territories).

Usually, cars given as gifts to family members or inherited are exempt from sales tax.

Here are the tax implications for the largest provinces:

Province	Sales tax	Notes
British Columbia	12–20% PST on the higher of purchase price or Black Book value.	Rate increases based on vehicle’s value. Reduced if purchased from a GST registrant.21
Alberta	n/a	No sales tax charged except GST when purchased from a GST-registered seller.
Saskatchewan	6% PST on the greater of the sale price or the average Red Book value (if available).17	Tax applies only to vehicles purchased for more than $5,000 for personal or farm use.
Manitoba	7% RST on the fair market value of the vehicle.22
Ontario	13% RST on the higher of purchase price or Red Book value.	Value may also be determined by appraisal. GST/HST is paid instead of RST if purchased from a tax-registered business.23
Quebec	9.975% QST on the higher of sale price or estimated value.24	Estimated value defined as $500 less than the vehicle’s average wholesale price in the Guide d’évaluation Hebdo (automobiles et camions légers).25

Related articles

• Buying new vs. buying used cars
• Is low or high mileage better for a used car?
• The 10 most important vehicle maintenance tasks

Buying car insurance

After you’ve inspected a car, bought it, paid the sales tax, and transferred ownership, just one step remains: buying car insurance. Fortunately, this part is pretty easy.

Buying insurance for a used car works just like any car. Visit a broker or find one online. If your province has a public insurer (BC, Saskatchewan, and Manitoba), there’s not much need to shop around, as the price won’t differ between brokers (though customer service may). In other provinces, it’s worth getting a few quotes, as prices vary among providers.

Visit our guide to the basics of car insurance to learn more about the application process, coverage selections, and common questions.

A couple of considerations for insuring used cars specifically:

• As long as you didn’t buy the car with a secured loan, you’re permitted to decline physical damage coverage for the car (like comprehensive or collision). You may still wish to buy it, especially if the car is still relatively new. But, if your used car is old and has little remaining value, you might decline these coverages to save money — just be aware that you’d be responsible for repair costs normally covered by those options.
• You’ll be able to choose deductibles for your policy. A deductible is the amount you pay when you make a claim before your policy pays the rest. If your vehicle’s actual cash value (ACV) is low, consider that a high deductible might result in very little coverage. Damage coverages are limited to the vehicle’s ACV; if the deductible is higher than that amount, there would be no coverage for the damage (medical costs and other accident benefits would still be available, of course). Whatever deductible you choose, make sure it’s an amount you’re comfortable paying in the event of a claim.

And that’s it! You’ve got all the knowledge you need to find a used car, check it out, insure it, and hit the road.

Commonly asked questions

Is there a lemon law in Canada for used cars?

Except for Quebec, Canada doesn’t really have lemon laws for used vehicles. Vehicles from the most recent four model years may be eligible for a CAMVAP claim, but this option isn’t available for used vehicles purchased privately.

If your used car is defective, you may have some recourse if you purchased it from a dealership. Dealerships are required to disclose certain information about cars they sell, such as known defects. They’re also expected to sell cars of reasonable quality.

However, if you purchased your used car from a private seller, your recourse would be limited. Unless you can negotiate a solution with the seller, your only option would be legal action.

If your used car is still under a warranty, whether manufacturer or extended, it may cover certain defects that arise. Not all warranties automatically transfer to a new owner when the vehicle is sold. So, if there is warranty coverage, confirm the details with the seller.

What are grey market vehicles?

The grey market refers to the sale of vehicles through channels other than manufacturer-authorized dealers. In Canada, it generally refers to vehicles manufactured for a foreign market that are imported into the country. Such vehicles must be at least 15 years old — there’s no allowance for newer vehicles.²⁶

Grey-market vehicle sales are usually to enthusiasts who buy specific, sought-after models that are unavailable in Canada.

Can you lease a used car?

It is possible to lease a used car, though it’s less common than leasing a new one. Some dealerships offer lease options for certified pre-owned (CPO) vehicles. Second-hand leasing is more common for luxury brands.²⁷

Aside from having fewer vehicles to choose from, leasing a used car works like leasing a new one. Check out our guide to leasing a vehicle for more details.

Sources

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13. Financial Consumer Agency of Canada. “Risks Associated With Car Liens.” canada.ca, 14 October 2025, www.canada.ca/en/financial-consumer-agency/services/loans/financing-car/risks-car-liens.html.
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