How Much You Should Pay for a Used Car?

It is not easy to determine how much you should pay for a used car. A vehicle’s depreciation, or loss in its original value, depends on many variables, including how old the car is, its current popularity, and whether you are buying from a dealer or directly from the original owner.

In general, the value of a three-year-old car can range from half to two-thirds of its original purchase price, and some cars retain even more of their original purchase prices. For example, the popular Ford Explorer retains about 75 percent of its sticker price after three years, while the high-end Lincoln Continental retains only about half of its original cost after the same amount of time.

Total Steam Auto Detailing Center Blue Book Car Prices
Total Steam Auto Detailing Center Red Book Car Prices
Total Steam Auto Detailing Center Book Car Prices

Unfortunately, increased demand has caused used-car prices to rise even faster than new-car prices over the past few years. You need to do your research to get a good deal. Click here for Ontario car prices.

The scariest part of buying a used car is not being completely sure of what condition it’s in. A car that’s been in a major accident is always a bigger risk, but sellers often try to hide this information.

We recommend hiring an independent technician to inspect the condition of a used car before you buy it. The problem is finding someone qualified to do the inspection, which generally doesn’t mean just any mechanic. A thorough mechanical inspection includes checking the compression, all major systems, including the engine, electrical and charging systems, transmission and drive line, fluids, brakes, suspension, and steering. Essential, too, is an inspection of the car’s body and finally a road test.

There are, however, a few things everyone can do before buying a used car:
Do a visual check of the car. Look at the right rear door hinges. If they are very worn, or the door doesn’t close well, the car may have been used as a taxi. Holes in the roof could mean the car was used for deliveries.
Check for oil leaks on the pavement. Note that leaks are not necessarily a significant problem -- it depends on the cause. Don’t assume that new-looking brake and accelerator pedals mean the car hasn’t been driven much. Resellers know people check these details and can buy new pads for around $6.

Copy down the vehicle identification number (VIN), a 17-character combination of numbers and letters, from the vehicle’s dashboard. In Ontario, ask the dealer or seller for the Used Vehicle Information Package. This gives details of previous owners, any outstanding liens on the car, and the fair market value of the vehicle.

Ask yourself questions to help you determine the kind of car you’re looking for:
How much do you want to spend on the vehicle? Factor in the costs of maintenance, repairs, and insurance.

How important to you is a car’s appearance versus its reliability?

What’s the maximum number of passengers you need to carry, and how frequently will you need to carry that many? If you only need to carry seven people once a year when your family comes to visit, you probably shouldn’t waste money on the high premium of a minivan.

How many kilometers do you drive on a weekly basis?

What kind of driving do you do (commuting versus recreation, and highway versus local or off-road driving)?

Be Smart When Buying A Used Car

During negotiations, look closely at any guarantee offered by a dealership. Ask if an extended warranty is available. This could be for a period of three months or up to three years.
If you are buying a used car privately, beware of “curbsiders.” These individuals pass themselves off as private sellers of their own vehicles. In fact, a curbsider is in the business of selling cars. If you are looking for a used car in the classified section of a newspaper, cast your eye down the ads. Does one phone number appear alongside more than one ad? If so, it is probably a curbsider. Recent studies found that about 20 percent of so-called private sellers in Canada are actually curbsiders. In Ontario, go to the Ministry of Transport, License Office, and ask for a Used Vehicle Information Package (UVIP). This gives you vital information and history about a used car in the province of Ontario.

The Used Vehicle Information Package (UVIP) provides an Ontario history of a specific vehicle. This package contains vehicle registration history in Ontario, vehicle lien information (i.e. if there are any liens registered on the vehicle in Ontario), the fair market value on which the minimum tax payable will apply and other information such as consumer tips, vehicle safety standards inspection, retail sales tax information and forms for bills of sale.

Be suspicious of any car that has signs of being freshly painted. This may indicate serious damage from an accident.

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