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Buying a used car: The sale

Shaking hands on a sale of a vehicle

It’s true what they (lawyers!) say: “Get it in writing.” If you’re buying a used car, don’t do it on a handshake. Learn how the sale process works, and how to protect yourself.

What you should know

Having clear, written terms protects both parties from unwelcome surprises.

If you’re buying from a dealer, they must give you a written agreement.

Dealers have to provide certain information about a vehicle to you in writing. Such as:

  • if the vehicle ever needed repairs of more than $2,000
  • if it’s been registered outside BC, and where
  • if it’s been used as a rental vehicle
  • an accurate odometer reading

Dealers also have to be up front about the full costs of purchase. The total must include (among other things):

  • any dealer fees, documentation and administrative fees
  • the interest costs if you’re financing the vehicle
  • the cost of necessary repairs, or any options you choose

We'll cover this in more detail shortly, under "Protect yourself!"

The seller may suggest buying an extended warranty. This is the seller’s promise to cover all repairs and maintenance for a given period if there are problems.

But be aware that an extended warranty may not give you any more rights than you have already. Under the law, a level of quality, performance, and durability is implied in every sales contract. This is called the legal warranty.

If you're thinking about an extended warranty, check its terms:

  • How long is it good for?
  • Where will you have to go to obtain warranty repairs?
  • Does the extended warranty cover parts and service, or just one or the other?

In BC, there is no "cooling off period" once you’ve signed the purchase agreement to buy a used vehicle.

A particular dealership may have a return policy, but there’s no law requiring that dealerships have such a policy.

This means you won’t be able to cancel an agreement just because you changed your mind or because your situation has changed.

But if there’s something wrong with the vehicle, or with the way it was sold to you, you may be able to cancel the agreement.

While there’s no legal right to return a vehicle, a vehicle can be returned under certain circumstances.

You may have a claim to return a vehicle if isn’t:

  • fit for the purpose you bought it
  • usable
  • reasonably durable
  • as described

Note the first two points only apply if you buy from a licensed dealer.

We’ve got more on this if you want to level-up your legal knowledge. See our in-depth info on problems with a used car you bought.

Protect yourself!

You’ll save in the long run if you follow a few simple steps before buying a used car.

Step 1. Do your research

Step 2. Negotiate with confidence

Step 3. Clarify how to pay

Step 4. Get it in writing

Step 5. Read the agreement

Step 1. Do your research

Check out the Canadian Black Book, AutoTrader.ca, and online classified ads to learn the average price of that make and model of vehicle. Visit the CBB website, and the AutoTrader website.

You’ll want to think about:

  • the mileage
  • the wear and tear both inside and out
  • the car’s accident history
  • how well it was cared for
  • any flaws or mechanical issues
  • the car’s accessories and added features
  • any recent updates or upgrades

If the vehicle history report reveals the vehicle has been damaged, make sure it was properly repaired. Don’t be afraid to ask about any other problems you find.

You may be asking, how do I get a vehicle history report?

You can order one from ICBC. They have many (but not all) vehicles in their database. You'll need the vehicle identification number (VIN), the make, model and year. See the ICBC website.

Step 2. Negotiate with confidence

When you make your offer to the seller, say it with confidence.

Make sure all the items that are part of the transaction are clear. For example, any warranties, types of charges, and so on.

This isn’t a stick of gum. It’s a big purchase! Almost anything about the sale of a vehicle can be negotiated.

No matter what, don’t rush this decision. If the seller makes a counteroffer to your original offer and you’d like to think about it, that’s OK.

You can simply stop the deal if you feel like you’re being pressured into paying too much or buying additional features. There are many other used-car fish in the sea.

Step 3. Consider how to pay

Before you sign, think about how you’ll pay.

Financing or a loan can be an expensive way to pay, and you'll need to make sure you can realistically afford the monthly payments.

Never agree to pay for the vehicle up front (that is, before you get the actual vehicle or the signed vehicle registration form).

If the seller wants you to pay money to a third party who’ll act as a go-between (often called an escrow service), investigate the service to make sure it’s legitimate. Many online escrow sites are fraudulent.

In deciding whether to buy or lease, consider that when you lease a used vehicle from a dealer:

  • you don’t own the vehicle until the last payment is made
  • there’ll be a fixed monthly cost — so it’s easier to budget
  • the vehicle can be repossessed if you can’t keep up the payments

Step 4. Write down and understand the agreement

Having clear, written terms protects both parties from unwelcome surprises.

If you’re buying from a dealer, they must give you a purchase agreement.

Put the terms you want into the agreement. If the seller promised to get the brakes fixed before the sale, write that down in the agreement.

We have a template you can use to create your own draft agreement. Here's our template agreement.

A written agreement from a car dealer must include:

  • the model and year of the car, and its odometer reading at the time of the sale
  • whether the odometer accurately records the mileage
  • whether the car has ever had damages that cost over $2,000 to repair
  • whether the car is from out of British Columbia
  • whether the car has ever been used as a taxi, police car, emergency vehicle, a lease vehicle, or a rental vehicle, or in organized racing

The written agreement from a car dealer must also include everything about the cost of buying the vehicle, including:

  • any dealer fees
  • documentation and administrative fees
  • licence and insurance fees (separate from ICBC fees)
  • the interest costs if you are financing the car
  • the cost of necessary repairs
  • the cost of any options you choose
  • the total cost

The dealer must give you a copy of the purchase agreement when the agreement is accepted. Keep it in your records.

Step 5. Read and understand the agreement before you sign

Don’t take the signing of this document lightly. Fine print isn’t just for lawyers! Here are a few pointers:

  • Go over every section, including any text on the reverse side.
  • Ask the salesperson to explain anything you don’t understand.
  • Have the salesperson fill in all areas of the document or put a line through any blank spaces, and to initial it.

Once you sign the document, the other party can accept it. The moment they do, you have to buy the vehicle.

Now that you’ve signed, there are steps to take to complete the sale before you start driving.

Steps to complete the sale

You’ve researched and negotiated. You’ve got an agreement in writing. What else do you have to do to finalize the sale? There are five key steps:

Step 1. Seller picks up a transfer form

Step 2. Seller prepares the car for sale

Step 3. Seller provides the registration card, buyer pays

Step 4. Complete the transfer form

Step 5. Buyer registers the transfer

Step 1. Seller picks up a transfer form

The seller must pick up a Transfer/Tax Form from an Autoplan broker. This is a standard form that everybody uses.

Step 2. Seller prepares the car for sale

The seller removes the licence plates, as well as the insurance and vehicle registration form.

The insurance and registration are actually two parts of the same document. The seller tears off the bottom portion of that document, the vehicle registration portion, and signs it.

Step 3. Seller provides the vehicle registration, buyer pays

The seller gives the buyer the signed vehicle registration. The buyer pays the seller.

Step 4. Both parties complete the transfer form

Once the seller is paid, both the buyer and the seller complete the transfer form and sign it.

If either of you make a mistake on the transfer form, a new form must be completed, as ICBC will not accept a form that has been changed.

Step 5. Register the transfer

To complete the transfer, the vehicle registration and completed transfer form must be brought to an Autoplan broker within 10 days of the sale.

ICBC recommends that the seller and buyer go together to register the transfer.

This way, the seller can ensure they are removed from the vehicle registration record, and the buyer can register the vehicle, licence it and insure it all at the same time.

If you're buying a used vehicle from a dealer, the staff at the dealership can help you with the registration, insurance and licensing.

The dealership will either have an on-site insurance broker or a broker will have an office nearby.

  • This information applies to British Columbia, Canada
  • Reviewed in December 2019
  • Time to read: 7 minutes

Reviewed for legal accuracy by

Ian Christman, Vehicle Sales Authority of BC

Ian Christman, Vehicle Sales Authority of BC

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This information from People’s Law School explains in a general way the law that applies in British Columbia, Canada. The information is not intended as legal advice. See our disclaimer.

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