How to buy car privately



Recently I bought a used Toyota Camry in a private transaction. When I began looking for a car privately, I was not sure how the process would go, as I only had some anecdotal information about it. As such, I wish to pen down all the steps I went through to buy the car.

It took me exactly one month to buy the car from the time I actually started looking for a car. For some people this may seem a too overwhelming task, but, believe me, it is not if you go about it systematically .

Reasons for not buying my car through a dealer: 1. I did not want to pay for the dealer’s margin (about 10 to 20% of car price). 2. I wanted to learn about cars as much as possible before I actually owned one. 3. I heard many stories about dealers selling lemons where the customer had to incur expenses as high as $700 within two months of buying the car.

The process can be divided in three basic steps:
1. Deciding which car to buy; 2. Searching online for the desired car; 3. Closing a deal safely.

Two most important aspects to avoid being fooled when buying a used car: 1. Check car history using its Vehicle Information Number (VIN) 2. Have the car inspected from a trusted mechanic before you finalize the deal.


1. Deciding which car to buy

First decide how much you are willing to spend upfront on the car, and how much you can spend every month on the car in terms of gas, insurance, and parking rent (at your apartment and office). Note that besides the actual price you pay to the seller you need to be aware of other minor expenses that are incurred during this process.

Total cost = Car price + 13% HST on car price + roughly $150 for inspection, safety check and emission tests.

(if you buy the car through a dealer, you do not incur the expenses related to inspection, safety and emission tests. You pay the HST irrespective of how you bought the car)

a. Model. I used the following reviews to decide the car I wanted to buy. I homed on three models: Honda Accord, Nissan Maxima, and Toyota Camry.

Epinions1 http://www.epinions.com/content_2083233924
Epinions2 http://www.epinions.com/auto-topic-Autos-Buying_Guides-How_To_Choose_The_Right-Type_Of_Car


b. Price. Having decided on a model, you need to figure the model year suitable for your price range. First I looked at various Blue and Red books available on the Internet and in Toronto Public Library branches (they have red books) to figure out model years suitable for my price range. The following are a few sources to figure an approx price range.

i. Kelly blue book- http://www.cars.com/go/kbb/kbbInput.jsp

ii. Canadian Black Book - http://www.toyota.ca./cgi-bin/WebObjects/WWW.woa/11/wo/Home.Shopping-lglcDbUtnBRtUTFKvRy2jg/2.19.3.0.3.1
Click on ‘Appraise your trade-in’ to go to the CBB site. or http://tradein.canadianblackbook.com/tradein/java/entry_token_6ee16981f144a73e24b4003f472c73bf

iii. VMR Canada- http://www.vmrcanada.com/canada_makes.htm

iv. Canadian red books available at Toronto Public Library branches.

v. Used Vehicle Information package. In Ontario, before selling a vehicle, the owner has to obtain this information package from the ministry of transportation. On the first page of the package, there is info about the estimated retail and wholesale prices of the vehicle. The average of the wholesale and retail prices is also a good estimate of the price.


2. Searching for a car

Once you have generally decided on how much you want to spend upfront, go to the following sites and see various private sale advertisements for the model you are looking for. You will get a general idea of the price range people are asking for the model. An ad generally provides pictures and info of the car as well as the contact details of the owner.

i. AutoTrader - http://www.autotrader.ca/search/advancedsearch.aspx
ii. Craigslist - http://toronto.en.craigslist.ca/cto/
iii. Kijiji – http://toronto.kijiji.ca/f-cars-vehicles-SUVs-trucks-vans-W0QQCatIdZ32

I mainly used Autotrader and Craigslist because of their search functionality. Kijiji’s search function is not so good. Autotrader and Craigslist allow you to set a search criterion suitable for you. These custom search links- which can be saved as favorites on your internet explorer – allow you to search cars by the model and the make year. For example, the following are the two links I had saved in my Favorites, and I used to visit them every day. This allowed me to review new cars as soon as they came on the market, and to compare the new cars with previously listed cars in the same category.

Autotrader custom search: http://wwwb.autotrader.ca/a/pv/Used/Toyota/Camry/Toyota%20Camry/?srt=3&lloc=Toronto%2c+ON&rctry=True&c2t=Car&yRng=2000%2c2005&pRng=%2c10000&st=1&prx=100&cty=Toronto&prv=Ontario&r=40&loc=Toronto%2c+ON
Craigslist custom search: http://toronto.en.craigslist.ca/search/cto?query=camry&minAsk=&maxAsk=max&hasPic=1

a. Questions to ask. When I liked a car, I would call up the owner and ask him certain questions. Actually, I had prepared a list of important questions, and kept about 20 printouts of that list handy. For every car I considered, I used a separate page to note down the seller’s answers. I also made sure that the car is from within 20-30 kilometers from my residence, to avoid a long drive to meet the owner. The following is the list of questions I used.

1 Are you the original owner of the car? How long have you had the car?
2 How many kilometers are on the car?
3 What year did you buy this car in? How much did you buy this car for?
4 Was this car ever owned outside of Ontario?
5 What is the VIN (Vehicle Identification Number), to check car history?
6 Was the vehicle ever involved in an accident?
7 Are you okay if I showed this car to my mechanic?
8 Do you have all maintenance records? Do you have bills of major repairs?
9 Where do you service the car? When is the next service due?
10 Do you have Used-Car-Buyer's package for the car?
11 Are you aware of any structural and mechanical problems in the car?
12 Is there any auto loan on the car?
13 Is all the paperwork available for inspection?
14 Why are you selling the car?
15 What kind of transmission does the car have? Automatic or manual?
16 Engine 4 or 6 cylinder?
17 How much of the original warranty/repair warranty is left?
18 Do you have the bill of sales, registration and title documents?
19 Is there a tire jack and a spare tire with the car?
20. Would you be able to drive the car over to my place? I don’t have a ride.


I valued certain aspects more than others, such as the car has to be from within the province, and the owner has to have maintenance records. My first question used to be : Once we finalized on the price, I would like to get this car inspected from my mechanic located in North York. Would that be okay with you? I think, this question itself would eliminate 80% of the lemons presented to you. If the owner is not willing to answer this questions, be sure that it is not a good deal.


To be on the safer side buy a car which was originally purchased in your province and remained in the province till it came up for a sale.

As for the car inspection itself, I would request the sellers to drive the car over to my place for an inspection of 10-15 minutes. Sellers really interested in making a deal would not mind and come over. That way I saved myself from the hassle of going to different places just to see a car.

b. Checking car history. If you are satisfied with the seller’s answers on phone, the next step is to use the VIN number to check the car’s history. Carfax and Carproof are the two services available in Canada for this purpose. I used Carfax in my search because it is convenient. With a fee of approx. $35, Carfax allows you to get as many car history reports as you want for one month. On the other hand, Carproof charges approx. $50 for every report. Though Carproof reports provide more details than those provided by Carfax, I thought those additional details were unnecessary as I was going to have the car inspected from my mechanic. Use the history report to verify what was told to you by the seller. In my search, I came across one car with a rolled back odometer.

Carfax http://www.carfax.com/
Carproof https://www.carproof.com/Default.asp

c. Physical inspection. Once you are satisfied with a car’s history, arrange for a physical inspection of the car. Verify the VIN number provided to you with the one imprinted on the car’s engine. Check the ownership documents, and service records. Verify the VIN and owner’s name on the document is correct. Ask the seller to show his driving license to verify his identity. As long as you politely request the seller to verify his identity, he should not mind it. Please do not take these suggestions lightly, especially those related to verification of facts. In the world of used cars, there are many issues where you can go wrong and end up with a lemon. Do not be biased by the race of the seller. I had one seller from Ahmadabad, who almost sold me a lemon.

i. Check the car exterior for scratches and dents. Make sure that the plastic parts are firmly placed. If you find anything that you don’t like, bring it to the attention of the seller. You can use that aspect later to talk down the seller’s price.

ii. Open the hood; note the overall state of the engine. Open the trunk and check the spare tire and jack.

iii. Ask the seller to take you for a short ride. During the ride listen to the engine sounds; inspect car equipment, accessories, and seats. During the ride or later, turn on AC, radio, CD player; ask the owner to operate power windows, chairs, mirrors and note down issues, if any.

iv. Check car documents and service records.

v. After an inspection, avoid getting into a price discussion; tell the seller that you would call him shortly about the price.



3. Closing a deal safely.

a. Finalize on price. After having seen the car’s condition, you can use the pricing sources suggested above to come up with a pricing range. To get a rough estimate, I used to take the average of the price estimates from different sources. Then, based on the car’s condition, I would adjust my price up or down. Note that there is nothing called an exact price for a car; it is always a price range. Once you have established a price range, quote the lower end of that range to the seller, and negotiate to come up with a price that is acceptable to both of you. Remind the seller, that the price is contingent on the result of the inspection by your mechanic. Also finalize the date for the mechanical inspection of the car.

b. Getting a reliable mechanic. You need to have a reliable mechanic on your side to get an unbiased review on the car you plan to buy. As I did not know any reliable mechanic, I used the services provided by APA, the Automobile Protection Association, a non-profit association dedicated to promoting consumer interests in the marketplace. You can call them up and ask them to suggest one of their reliable mechanics located in your neighborhood. This should be done as soon as you start looking for cars.
The mechanic charges around $75 to $100 for a through inspection and gives his opinion in writing only to you. Believe me this additional cost is worth it. The mechanic, who inspected my car, checked 56 points in my car, and gave me a detailed analysis of the existing snags in the car as well as potential problems that could develop down the line. Be prepared to walk away from the car if the problems discovered are serious or there is a likelihood of serious problems in the future. Another advantage of this inspection is that it counts as the mandatory safety check required by the Ministry of Transportation.

APA website http://www.apa.ca

c. Mandatory tests. When you buy a used car, you need to have two mandatory tests done on the car: 1. Safety check 2. Emissions test. It is not necessary for the buyer to have those tests done. Some sellers have these tests done on their vehicles before they put them up for sale. Some sellers will try to tell you that they have done the safety check and you need not have to have an inspection from your mechanic. Please do not agree to that point. An inspection from your trusted mechanic, I think, is the most important precaution you can take to avoid being fooled. If a seller has not performed those tests on his car, you can use that point for your advantage by telling him that you will pay for the safety check and asking him to pay for the emissions test. I had my emissions test done from the same mechanic.

d. Used Vehicle information package. As mentioned earlier, the seller has to obtain an UVIP for his car. Make sure you read the package carefully before you finalize the deal. The seller hands over that document to you when the car is handed over. The second page of the document has a Bill of Sale section. Both the buyer and seller have to sign on the document and write down the agreed price of the car. As the buyer you have to present that document to the ministry to get a license plate. The ministry will charge you an 8% retail tax based on the price entered in that section.

e. Shopping for Insurance. Buying insurance generally involves calling up different insurance companies and getting a quote. I called up following companies: Johnsons
Personal, Belair, President choice, TD, Statefarm, Certis, RBC, OIS Ontario Insurance Service Ltd, Hub insurance. The contact details of these companies can be obtained from the net. Some of them allow you to get an online quote as well. An auto insurance involves third party liability coverage, collision coverage, and comprehensive coverage. The third party coverage is mandatory. When talking with an agent, make sure you understand the difference between these terms and accordingly decide what you want to cover. Be aware of the other insurance products these agents try to sell you along with a car insurance product. In my opinion they are generally useless in terms of their coverage as well as their real need to you. Compare the discount it is providing with the additional burden you have to bear when you buy an additional insurance product. Also, having a defensive driving certificate helps in getting a discount on insurance premiums. Ask your driving instructor about it.

I ended up with OIS Ontario Insurance, as they provided me the best rate. Their additional advantage is they provide a tracker (optional), an electronic device that fits in the car, that tracks your driving data. Based on this data, you could get a discount on your future premium payments. If you are a safe driver, this option allows you to further reduce your insurance payments.

This site has some basic info on the kind of insurance plans you need in Ontario.
Ontario Auto Insurance FAQ http://www.believerplus.com/ontario-insurance-faqs.php


f. Registration. Once you get the possession of the car, take the used vehicle information package along with Safety check, emissions test, and insurance documents to a ministry of transportation office to get a license plate. You can’t drive the car until you get the license plate. You also need to inform the manufacturer of your car about the change in ownership so that in case of any after sales issues the company can contact you.

Note that I don’t mean to be an expert on this subject, as I have bought just one car using these steps. Please do not follow these steps blindly and use your judgment during the whole process.

Hi
Can you please provide the contact numbers/web link of OIS - Ontario Insurance Service, Certis, & Hub?

Thanx

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sumjo

Aviva - 1-800-387-4518
Hub -905-459-4000
I am not able to find the contact details of Certis.

Good info, musicgold! Hope you enjoy your Camry.

BTW, it used to be Certas Insurance and now its Dejardins General insurance and its old number was: 1-800-814-0008 which I think, is still working.

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Sanjeev Manocha, MBA
Real Estate Sales Representative
Accredited Buyer Representative (ABR)

Re/Max West Realty Inc, Brokerage
96, Rexdale Blvd., Toronto

Mobile: 416-843-7600
Office: 416-745-2300
http://www.manocharealty.com" rel="nofollow">LINK

A painstakingly written post - very well written . Thanks a lot for sharing all this information --- deserves to be sticky as it can help anyone , esp the new comers in buying used vehicles .

New desis should understand that unlike home countries , repairs here are very expensive -- its better to pay $500/- extra for a better vehicle with less mileage , then trying to cut corners .

Also the body of the car is more important than the engine as the former unlike the latter cannot be changed - a careful personal inspection should be done .

All defects observed (mechanical / otherwise ) should be negotiated upon after mechanic's inspection even if they are trivial for eg if the burglar alarm is not working - you can negotiate ---- short list the vehicle , inspect it and then hammer the price as much as possible.

Lastly - never buy in haste - keep a time period of 1-2 months aside for getting a good vehicle which can last for years .

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Fido.

Great post! I've made it a sticky.

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Are you there?

Thanx musicgold for dis useful info.We r planning to buy a car and were thinking where to start with.You made it easy for us nd many more.

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Life is too short for drama & petty things, so Kiss Slowly, Laugh Insanely, Love Truly and Forgive Quickly.

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