"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 had 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
Each year, British Columbians buy more than 400,000 used vehicles, double the number of new vehicles purchased. Of the used vehicles bought in the province, a third are private sales, where the risks of fraud can be greater than when buying from a car dealer.
Whether you are buying privately or from a dealer, here are seven steps you can take to reduce the chances of being a victim of fraud when buying a used car.
Step 1. Inspect the car in daylight
When you’re buying a used car, it’s always important to give the inside and the outside a thorough inspection and take a test drive to make sure the car is in the same condition as the seller is advertising. Arrange to view the car in daylight, preferably when it’s dry. It’s harder to spot damage to the car if it’s wet.
ICBC has a checklist of what to look for when inspecting a used car and taking it for a test drive.
Step 2. Check the vehicle identification number
Make sure the vehicle identification number on the car—known as the VIN—matches the number on the vehicle registration form. The most common places to find the VIN are on the dashboard identification plate or the inside door panel on the driver’s side.
Check that the VIN has not been tampered with. Signs of tampering include loose or mismatched rivets, scratched numbers, tape, glue or paint. If the VIN has been tampered with, it’s a sign the vehicle may have been stolen.
Step 3. Check for odometer rollbacks
Look at the actual odometer.
- Do all the numbers line up?
- Is there any evidence of sabotage (scratches, cracks) in and around the odometer?
- Does the wear and tear of the vehicle show more use than the mileage indicates?
Step 4. Do a lien search
Particularly if you’re buying a car from a private seller, it’s important to check for liens. A lien is a legal claim made on someone else’s property to make sure they pay a debt. Liens are attached to a vehicle, not to its owner. If you buy a vehicle with a lien on it and the previous owner fails to pay a debt, the lien holder can take the vehicle from you as payment.
In BC, liens are registered in the Personal Property Registry in Victoria.
For $10, you can do a lien search on the car yourself:
Alternatively, you can also use a private company that searches titles or provides vehicle history reports. For example, CarProof provides Canada-wide lien information—including BC results—as part of its vehicle history report.
Step 5. Get a vehicle history report
A vehicle history report can tell you if the car has previously been in an accident, reported stolen, or written off and later repaired and returned to the road. Some vehicle history reports will also tell you if the seller still owes money on the car.
You can order a vehicle history report through ICBC (for $20) or a private company such as CarProof (for $40 to $70).
Step 6. Get an independent inspection
Get an independent, licensed mechanic to give the car a detailed inspection. An independent inspection usually costs around $100 to $200, depending on the mechanic and the extent of the inspection.
If the seller is resisting having an independent inspection done (“the car’s in great shape, I just had it fully checked out!”), that’s often a red flag. Insist that you get an inspection done. As a consumer, it’s your right to have an independent inspection.
The seller may ask you to provide 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 that any documentation you sign say that you are not bound to go through with the sale until you approve the results of the inspection.
Step 7. Don’t pay before you get the car
Never agree to pay for the car upfront or send money via wire transfer. While a small deposit can be a great way to let the seller know you’re serious about purchasing the car, don’t hand over the full amount to the seller until the day the car is ready to go home with you.
If the seller requests an escrow service (a third party that acts as a go between you and the seller), investigate the service to make sure it’s legitimate and secure. Many online escrow sites are fraudulent.
Learn more about how to protect yourself when buying a used car, and the steps to negotiate and finalize the sale.