Buying a used car: How to protect yourself

Myth or fact?

In BC, anyone can sell cars without a car dealer's licence as long as they sell fewer than five per year.
  • Myth
  • Fact

You’re thinking of buying a used car (hard to beat the price!). But you’re wary of ending up with something that’s truly worn out, or has been badly damaged or stolen. Fortunately, there are steps you can take to help you get a safe and reliable (and legal!) car.  

What you should know

You’re more protected if you buy from a dealer

“I never thought of myself as someone who could fall for a scam. I saw an ad on Craigslist. A car dealership was selling the exact car I was looking for at a great price. The dealer had a slick website, and listed an address in Nevada where the car could be picked up. I could fly to Las Vegas, pay for the car, and still have money left over from what I had imagined spending. I paid a $1,000 deposit online. When I arrived at the Nevada address, it was an abandoned warehouse. There was no car dealership. My car didn’t exist.”

– Sam, Langley

There are laws that offer you protection if you buy a used car in BC from a licensed car dealer. But not if you buy from a private seller. 

Car dealers in BC must be licensed by the Vehicle Sales Authority of BC, and they must follow certain laws. 

A significant percentage of ads that look like they’re placed by private sellers are actually placed by curbers. A curber is someone who makes money selling cars but isn’t a licensed car dealer. Many curbers misrepresent the real condition of the car, hide major issues, or charge illegally high interest rates. If you buy from a curber and have a problem, often your only option is to bring a lawsuit. 

Selling cars to make money makes someone a car dealer

Anyone selling five or more vehicles in a year is automatically deemed to be a car dealer under BC law. This law helps authorities take action against curbers, who are people who make money selling cars but haven’t been licensed as car dealers. The Vehicle Sales Authority of BC offers tips on how to spot a curber.

Under the law, a level of quality, performance and durability is implied in every sales contract. When you buy a car from a dealer, it has to: 

  • be of merchantable quality (that is, it has to work for its intended purpose and can’t be damaged),  

  • be fit for the purpose you bought it for, 

  • be durable for a reasonable period of time, and 

  • match the advertised description. 

These conditions are sometimes referred to as the legal warranty, as they are established by a law called the Sale of Goods Act. This legal warranty applies whether the dealer mentions it or not. It’s in addition to any warranty the dealer or manufacturer provides. 

If the car is faulty or not as described, the legal warranty gives you the right to get it repaired or replaced, or to cancel the contract and get a full refund. (Learn more about your options when you have a problem with a used car.) 

If you buy from a private individual, the legal warranty is more limited than if you buy from a car dealer. Any car you buy from an individual still has to be durable for a reasonable period of time, and match the advertised description. But the conditions that it be of merchantable quality and fit for the purpose you bought it for apply only when you buy from a dealer.   

When a car is sold “as is”

Sometimes, a seller will say a car is on offer "as is." This implies that if anything goes wrong with the car you’re on your own: don’t expect help with repairs or servicing. But in fact the seller is still on the hook in such cases. The legal warranty applies to all new products, no matter what a seller says. 

Note, however, that the legal warranty can be waived for a used vehicle. Be cautious if you’re asked to waive it.  

When you buy a used vehicle, the legal warranty can be waived

The legal warranty applies to all new products, no matter what a seller says. However, the legal warranty can be waived for a used vehicle (as in, you agree to buy the vehicle “as-is”). Be cautious if you’re asked to waive the legal warranty. You’ll want to be sure you’ve done everything you can to protect yourself by following the steps below.

The seller must not mislead you  

Under BC law, a seller isn’t allowed to mislead you to convince you to buy something. In their advertising, they can't be deceiving. The same goes for in their conversations with you.

For example, a seller must not advertise or tell you that:

  • what they’re selling is of a particular standard or quality when it isn’t

  • they have an approval, status, or connection they in fact don’t have

  • you’re getting a special price or benefit when they’re really offering something you can find elsewhere 

There are also federal laws that prohibit sellers from advertising or saying anything false or misleading. For example, a seller can’t tell you — in their ads or in conversation — any of the following:

  • What they’re offering is "on sale" or at a "special" price unless that price is lower than the ordinary selling price. (And they can’t suddenly bump up the ordinary price.)

  • What they’re selling performs at a certain level unless they can prove it. (For example, saying the car they're selling “has the best gas mileage of any compact car” requires back-up.) 

  • What they’re selling is endorsed by some credible or well-known person when that isn’t true. (That is, they can’t make up a fake testimonial.)

No one actually needs to have been deceived or misled for a court to find that a representation is misleading. If the general impression given by a representation is misleading, that’s enough.

Sellers who break these laws can be fined, jailed, or ordered to compensate consumers who suffer losses. 

The seller must not act unfairly towards you 

Under BC law, sellers aren’t allowed to act unfairly towards you or to knowingly take advantage of you. 

For example, a seller can’t charge you a price that’s far higher than what others are charging for the same thing. 

Nor can a seller put undue pressure on you to buy. For example, a seller can’t tell you you have to sign a contract immediately to get a “special price” they’re offering. 

A seller can’t knowingly take advantage of you. They can’t, for example, try to get you to buy something they know you can’t afford. 

A seller isn’t allowed to take advantage of any vulnerabilities — such as a disability or language difficulties — that restrict a customer’s ability to protect their own interests. For example, the seller can’t force a person whose first language isn’t English to sign a complicated contract they don’t understand. 

If the seller does something unfair, any agreement you’ve signed with them becomes invalid. 

Any car you buy should be free from hidden liens

“When I bought a car privately last year, my sister suggested I do a lien check. I laughed. I had no idea what a lien was; why search for one?! I’d found a Mazda on Craigslist. I took it for a test drive, my mechanic inspected it, the price was good. I bought it. It wasn’t until the car was towed by a bailiff that I learned the seller had used the car as collateral on a loan. The bank seized my car under the lien it held. I had no idea they could just tow away my car even though I didn’t owe them a cent.”

– William, Richmond, BC

The law implies a warranty that anything you buy is free from any hidden charge or lien

A lien is a legal claim made on someone else's property to make sure they pay a debt. For example, a bank that lends money to help someone buy a vehicle may place a lien on the vehicle in case the owner fails to repay the loan. If the owner doesn’t repay the loan, the vehicle can be taken as payment.  

Licensed car dealers are required to sell vehicles free of liens. Even though private sellers are required under the law to tell you of any lien on the vehicle, it’s always important to check for liens when you’re buying a used car. See below for details on how to do a lien check.

If you buy a vehicle with a lien on it

Liens are attached to a vehicle, not to its owner. If you buy a vehicle with a lien on it and the previous owner doesn't pay a debt, the vehicle can be taken back from you.

You can’t change your mind once you’ve signed a contract

In BC, there’s 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 no law requires that dealerships have such a policy. This means you can’t 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 in which it was sold to you, you may be able to cancel the agreement. Simply because there’s no legal right to return a vehicle doesn’t mean a vehicle can’t be returned under certain circumstances.  

Careful with deposits

A top complaint heard by the Vehicle Sales Authority is about consumers losing their deposit. In BC the general law on deposits is:

  • Leaving a deposit is the purchaser’s commitment to complete the transaction.

  • If the purchaser backs out of the transaction, the deposit is forfeited to the seller. The seller does not have to show or prove they have been “damaged” in any way.

  • If the seller backs out of the transaction, the purchaser is entitled to the return of the deposit.

  • If the transaction completes, the deposit must be applied towards the purchase.

  • If the deposit is very high, the consumer may get it or a portion of the deposit back, but they have to request a court to relieve them from forfeiture (which can be tricky, long and expensive!)

Generally speaking, good dealers will only ask for a deposit if:

  • they are ordering a vehicle in for you, or

  • they are doing work on the vehicle, like adding accessories, before they sell it to you.

If a dealer asks for a deposit outside these situations, consider another dealer. If you are asked to leave a deposit, get the terms of the deposit (is it refundable) in writing. Check out the Vehicle Sales Authority’s factsheet on deposits for more guidance.

Ask about return policies

If you’re buying from a dealer, ask about their return policies. There’s no automatic right to return a motor vehicle. Many people assume there is, as they’re used to generous return policies of some retail stores.

Steps to protect yourself 

Step 1. Make sure the seller is trustworthy 

If you’re buying from a dealer

If you’re buying a used car from a dealer, these steps can help make sure they’re trustworthy.

  1. Find out if the dealer is licensed. Car dealers in BC must be licensed by the Vehicle Sales Authority of BC and follow certain laws. You can search the VSA's registry of licensed dealers.

  2. Look into the dealer’s background and reputation. Does the dealer’s location look like a dealership? You can use Google Maps Street View to see the exterior. Does the dealer have a website that looks professional? What are others saying about them? Google the dealer’s name combined with the word “reviews” or “complaints.” 

  3. Beware of online scammers. Some people selling used cars online are flat-out crooks. Be extra cautious when buying online.  

Search the registry of licensed dealers

You can search the VSA's registry of licensed dealers in BC by dealership or salesperson. The registry shows if someone has a licence, and whether there are any restrictions on it.

If you’re buying from a private seller

These steps can help make sure a private seller is trustworthy.

  1. Verify the seller’s identity. Ask to see a piece of the seller’s ID (such as a driver’s licence), as well as the original vehicle registration form (not a photocopy). Does the owner name on the vehicle registration match the seller’s name on their ID? Does the address match the location of the sale? If either doesn’t match, ask why. 

  2. Be alert for signs the seller may be a curber. Does the seller not have the original vehicle registration form? Do they say they’re selling the vehicle for a friend or family member? Is their phone number listed in multiple ads for different cars? These are signs the seller may someone who sells cars for a living but isn’t licensed as a car dealer, even though they should be. 

Step 2. Check the car’s history

A few simple checks will reduce your chances of buying a car that’s being sold illegally or has had major repairs.

Get information about the car

To do these checks, you’ll need some information about the car. Ask the seller for the following:

  • Make, model, and year: It’s a good idea to double-check this information against the vehicle registration form.

  • Vehicle identification number (VIN): All vehicles are assigned a unique vehicle identification number consisting of 17 characters. You can find the VIN on the car itself and on the vehicle registration form. On the car, the two most common places are on the dashboard on the driver’s side and the inside of the driver’s side door. Other places to find it are on the engine and inside the hood. 

Check the vehicle’s status with ICBC

For free, you can learn the status of the vehicle you’re thinking of buying. ICBC’s vehicle status describes the general state of the vehicle and if it’s roadworthy.

To check the vehicle’s status, go to the Vehicle Claims History Report on the ICBC website, and enter the vehicle’s VIN and year.

The vehicle status types are as follows: 

  • Altered: The vehicle has been significantly modified and passed inspection since it first went on the market.

  • Salvage: The vehicle has been written off as a result of a crash, but is repairable. 

  • Rebuilt: This is a salvage vehicle that’s been repaired and passed inspection.

  • Non-repairable: The vehicle has been written off and can’t be repaired.

  • Normal: The vehicle doesn’t fall into one of the categories above. A normal status does not mean the vehicle has never been damaged or is in good mechanical condition.

For free, you can search the stolen vehicles database maintained by the Canadian Police Information Centre (CPIC). Enter the VIN to learn whether the vehicle has been reported stolen anywhere in Canada.

Get a vehicle history report

It’s a good idea to get a vehicle history report on the car. You’ll find valuable information about serious problems the car might have.  

A vehicle history report can tell you if the car:

  • has previously been in an accident,

  • the car has been reported stolen, or

  • has been written off, repaired and then returned to the road.

Some vehicle history reports will also tell you if:

  • the seller still owes money on the car, or

  • the car is showing the correct mileage.

You can order a vehicle history report through ICBC (for $20) or a private company such as CARFAX (for $40 to $60). 

Tip

Ordering a vehicle history report will give you valuable information about serious problems the car might have.

ICBC reportCARFAX report
Vehicle damage claimed through ICBCAccident information from across Canada and the US
No information about money owedCanada-wide lien information
No information about mileageOdometer records
Lower Mainland: 604-661-2233\nToll-free: 1-800-464-5050Toll-free: 1-866-835-8612
www.icbc.comcarfax.ca

You’ll need the car’s VIN (vehicle identification number) to order a vehicle history report. 

A lien check is the most important check you can do when you’re buying a used car, especially when buying privately. It helps you find out if the current owner still owes money on the car. If you buy a vehicle with a lien on it and the previous owner doesn't pay a debt, the vehicle can be seized. 

The law implies a warranty that anything you buy is free from any hidden charge or lien — so in theory you’re protected. But to be safe, you should check for liens. 

In BC, liens are registered in the Personal Property Registry in Victoria. If you have the car’s VIN (vehicle identification number), for $10 you can do a lien search on the car by: 

You can also use a private-title search company (in the Yellow Pages, see "Title Service”). 

You can get Canada-wide lien information, which includes BC results, by ordering a CARFAX vehicle history report.

Step 4. Inspect the car and take a test drive

Give the inside and outside of the car a thorough inspection and take a test drive to make sure the car is in the same condition that the seller is advertising. 

Arrange to view the car in daylight, preferably when it’s dry; it’s harder to spot damage if the car’s wet. It’s a good idea to meet at a private seller’s house so that if something goes wrong after you’ve bought the car you’ll have a record of their address.

ICBC has a checklist of what to look for when inspecting a used car and taking it for a test drive. Here are a few key things to watch for.

Check the VIN

Make sure the vehicle identification number on the dashboard identification plate or inside door matches the number on the vehicle registration form. Check that the VIN hasn’t been tampered with. Signs of tampering include loose or mismatched rivets, scratched numbers, tape, glue or paint. If the VIN has been tampered with, this may be a stolen vehicle. 

Check for odometer rollback

Look at the actual odometer. Do all of the numbers line up? Is there any evidence of sabotage (scratches, cracks)? Does the wear and tear of the vehicle suggest more use than the mileage would indicate?

Ask about the car’s accident and service history

Ask to see the service records. Stolen vehicles usually don’t come with maintenance records. You might want to call the repair shop to verify that the maintenance work was actually done.

Step 5. Get an independent inspection

If you’re still not sure at this stage, get an independent, licensed mechanic to give the vehicle a detailed inspection. 

By learning more about what’s happening under the hood, you’ll either feel more confident about your investment or you’ll discover things that rightly scared you off. 

An independent inspection usually costs around $100 to $200, depending on the mechanic and the extent of the inspection. The mechanic will examine the exterior of the vehicle, the interior, under the hood, and the under carriage. The BC government's Commercial Vehicle Safety and Enforcement website includes a list of designated inspection facilities in the province. 

As a consumer, it’s your right to have an independent inspection. The seller may ask you to leave a deposit or sign an offer to purchase prior to having the car inspected. You can insist that any deposit you make be refundable. And be sure any documentation you sign says you aren’t bound to buy the car if you don’t like what the inspection turns up.

Who can help

Helpful agencies

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

  • Reviewed in July 2019
  • This information applies to British Columbia, Canada
  • Time to read: 16 minutes

Reviewed for legal accuracy by

David Kandestin, People's Law School

David Kandestin

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