Buying a used car: Closing the sale

What are my rights

Can I cancel an agreement to buy a used car because I changed my mind the next morning?
  • Yes
  • No

You’ve found a used vehicle that is right for you, and you want to buy it. Here are steps to take to negotiate and finalize the sale. 

Getting the agreement in writing

Whether you are buying a used vehicle from a dealer or a private individual, it’s best to get the agreement in writing. Having clear, written terms protects both parties from unexpected surprises.

If you are buying from a dealer, they must give you a written purchase agreement. 

Put the terms that you want into the agreement. If the seller has said that they will get the brakes fixed before the sale, write that down in the agreement.

What the agreement must include

Under the law in BC, a written agreement to buy a used vehicle from a dealer must include:

  • the make, model and year of the car, and its odometer reading at the time of the sale 

  • whether the odometer accurately records the true distance travelled by the car

  • whether the car has ever had damages that cost over $2,000 to repair

  • whether the car is from out of British Columbia

  • an itemized list of any repairs needed and the associated cost 

  • 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

  • everything about the cost of buying the car, 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 cost of taxes

    • the total cost

The dealer must give you a copy of the purchase agreement at the time the agreement is accepted. Be sure to keep a copy of the agreement in your records.

Tip

If you’re buying from a car dealer, the price you see on a window sticker or advertisement must be the total price. This is the full amount you have to pay to purchase the vehicle (with the exception of taxes). This number needs to include dealer fees, documentation and administrative fees, inspection and pre-delivery fees, and any transportation charges.

Checking the terms of any extended warranty

When you buy a used car, the seller may suggest you buy an “extended warranty”. This is the seller’s promise to cover 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 through the legal warranty. (Under the law, a level of quality, performance and durability is implied into every sales contract. Learn more.) 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?

You cannot change your mind once you’ve signed a contract

In BC, there is no "cooling off period" once you have signed the purchase agreement to buy a used vehicle. A particular dealership may have a return policy, but there is no law requiring that dealerships have such a policy. This means that you will not be able to cancel an agreement just because you changed your mind or because your situation has changed.

But if there is something wrong with the vehicle, or with the way in which the vehicle was sold to you, you may be able to cancel the agreement. Simply because there is no legal right to return a vehicle does not mean that a vehicle cannot be returned under certain circumstances.  

Take action to protect yourself 

Step 1. Reach an agreement about buying the car

Here are some things to keep in mind as you negotiate the terms on which you’ll buy the vehicle.

1. Do your research on price

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

2. Take into account other things that will affect the selling price

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 may have

  • the car’s accessories and added features 

  • any recent updates made to the car

3. Ask the tough questions

If the vehicle history report reveals that the vehicle has been damaged, check to make sure the vehicle has been properly repaired. Don’t be afraid to bring up any other problems you find.

4. Negotiate with confidence

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

If negotiating with a dealer, make sure all the items that are part of the transaction are clear (for example, any dealer fee, documentation fee, warranties, etc.). Remember that anything about the sale of the car can be negotiated, with the exception of taxes. 

5. Don’t rush the 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.

Step 2. Write down and understand the agreement

Whether you are buying a used vehicle from a dealer or a private individual, get the agreement in writing. Having clear, written terms protects both parties from unexpected surprises.

1. Get the agreement in writing

If you are buying from a dealer, they must give you a purchase agreement. They will typically have their own form of agreement.

If you are buying from a private seller, you can use this document template to create a draft agreement. Make sure that any promises made are included in the agreement. If the seller has said that they will get the brakes fixed before the sale, write that down in the agreement.

Read and understand the agreement

“As I drove the used car off the lot, I was thrilled. I loved the car, and the dealer had thrown in a 90-day warranty to sweeten the deal. Three weeks later, the back seat flooded during a heavy rain. I brought the car back to the dealer. The good news: the repair was covered under the warranty. The bad news: it would cost over $2,000, and I was going to have to pay half of it. I hadn’t realized that the dealer’s '50/50 warranty' meant that I had to pay 50% of the cost for a covered repair.” 

– Zhang, Richmond

Don’t take the signing of this document lightly. 

  • Go over every section of the document, including any text on the reverse side of printed pages. 

  • Ask the dealer or the person selling you the vehicle to explain what things in the agreement mean if you don’t understand them. 

  • Have the dealer or the person selling you the vehicle fill in all areas of the document or put a line through them if there are blank spaces. 

Once you sign the document, the other party can accept it. Once the other party has accepted it, it means that you have to buy the vehicle. When you buy a vehicle, there is no return or cooling-off period like there is if you lease a vehicle

3. Make sure the agreement is complete

Under the law in BC, a written agreement to buy a used vehicle 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 true distance travelled by the car

  • 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

  • whether there are any repairs pending, and the associated costs

  • everything about the cost of buying the car, 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 

    • taxes

    • the total cost

The dealer must give you a copy of the purchase agreement at the time the agreement is accepted. Be sure to keep a copy of the agreement in your records.

Step 3. Consider how to pay

There are things to consider when deciding how to pay for a used vehicle. Consider all your options before getting financing or a loan. 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 upfront (that is, before you get the actual vehicle or the signed vehicle registration form). If the seller requests that you pay money to a third party that acts as a go-between in the sale (often called an escrow service), investigate the service to make sure it’s legitimate. Many online escrow sites are fraudulent.

In considering 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 will be a fixed monthly cost - so it’s easier to budget

  • the vehicle can be repossessed if you can’t keep up the payments

See more on leasing a car.

Step 4. Finalize the sale

Once you’re ready to buy (having gone through the above three steps, with a written contract in place!) how do you go about finalizing the sale? These are the steps to transfer the ownership of a used vehicle in British Columbia.

First, seller picks up a transfer form

The seller must pick up a Transfer/Tax Form from an Autoplan broker. The ICBC website has a directory of Autoplan brokers and a sample Transfer/Tax Form

Second, seller prepares the car for sale

The seller should remove the licence plates from the vehicle, as well as the insurance and vehicle registration form. The insurance and vehicle registration are actually two parts of the same document. The seller should tear off the bottom portion of that document, the vehicle registration portion, and sign it.

Third seller provides the vehicle registration, buyer pays 

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

Fourth both parties complete the transfer form 

Once the seller is paid, both the buyer and the seller complete the Transfer/Tax 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.

Fifth register the transfer

To complete the transfer, the vehicle registration and completed Transfer/Tax 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. Doing so protects both parties: the seller can ensure that their name and insurance are removed from the vehicle registration record in a timely way, 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.

Common questions

What if I change my mind?

In BC, there is no "cooling off period" once you have signed the purchase agreement to buy a used vehicle. A particular dealership may have a return policy, but there is no law requiring that dealerships have such a policy. This means that you will not be able cancel an agreement just because you changed your mind or because your situation has changed.

But if there is a something wrong with the vehicle, or with the way in which the vehicle was sold to you, you may be able to cancel the agreement. Simply because there is no legal right to return a vehicle does not mean that a vehicle cannot be returned under certain circumstances.  

Does a car dealer have to tell me if a vehicle was used as a rental car?

Yes. Licensed car dealers must advise you in writing if a vehicle was ever used as a rental car. If they don’t and it turns out the vehicle was used as a rental, any agreement you signed is not binding on you. 

I ordered a used car to be delivered from another location; do I have a right to inspect it before accepting it?

Yes. A contract to buy something is not actually done until the buyer has had a reasonable opportunity to inspect the goods to ensure they conform to the contract. You have a right to inspect the car and the seller must provide a reasonable time to inspect.

If you do any of the following things, it means that you have accepted the vehicle:

  • you inform the seller you accept the vehicle

  • you register and insure the vehicle in your name

  • you keep the vehicle without saying anything to the seller   

Is it possible for a used car to come with a warranty?

Some newer used vehicles can have the original manufacturer’s warranty or an extended warranty still in effect. Be sure to confirm what will be covered and for how long or how many kilometers. Make sure it continues beyond the first owner.

If the manufacturer's warranty is no longer in effect, a dealer may offer their own warranty. An ideal dealer warranty would be 30, 60 or 90 days, covering everything, including parts and labour. A common dealer warranty is “30 days, 50/50 parts and labour”. The idea behind the 50/50 warranty is that the dealer pays 50% of the cost for a covered repair and the buyer pays the remaining 50%.

All warranties should be:             

  • in writing and part of the contract            

  • signed by the dealer, not just the salesperson            

  • specific, with details of what is covered and for how long or how many kilometers

  • clear about where and how any repairs are to be authorized and done (for example, that any repairs be done at a garage of your choice)  

Even if you are buying a vehicle with no manufacturer’s or dealer’s warranty, there is a legal warranty under a law called the Sale of Goods Act. A vehicle must be safe and suitable for transportation, and must last for a reasonable period of time given the normal use of the vehicle and the circumstances of the sale (such as price, etc.). 

This legal warranty can be waived for a used vehicle. Be cautious if you are asked to waive it. You’ll want to be sure you’ve done everything you can to protect yourself.

Can I use the licence plates from my old car for the used car I just bought? 

If you don’t switch the registration right away of the vehicle you just purchased, you can drive the new vehicle with the licence plates from your old vehicle for up to 10 days from the date of purchase, as long as all of the following are met:

  • the new vehicle is registered in BC

  • you have sold or disposed of your old vehicle

  • both vehicles fall into the same category (for example, both are passenger vehicles)

  • the old licence plates are valid BC plates, and

  • you carry in the new vehicle all of the following:

    • the signed Transfer/Tax Form for the new vehicle 

    • the original vehicle registration 

    • the insurance papers for your old vehicle (the insurance must still be valid) 

    • proof that you sold your old vehicle (such as a copy of the Transfer/Tax form for that sale)

Who can help

Helpful agencies

Vehicle Sales Authority of BC
Helps resolve complaints with licensed car dealers.

  • Reviewed in May 2017
  • This information applies to British Columbia, Canada
  • Time to read: 12 minutes

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