Pre-owned car shopping in Canada can get overwhelming with all the options. Making things more confusing are all the different types of dealerships you can go to. It’s hard to decide which dealership is right for your situation and which you should avoid.
Below, we cover where to buy a used car in Canada, including various car-buying options and their pros and cons.
One of the first places buyers look for a used car is the private seller market. There is a nearly limitless market of used cars for sale in various marketplaces online, giving you a vast selection. Plus, there is the random side-of-the-road offering with a “For Sale” sign stuck in the window.
You’ll likely get a lower price than at a dealership with a private seller. You’ll also have an in-person test drive and be able to negotiate with the owner.
A major downside to a private party sale is there is usually no warranty coverage unless the balance of the manufacturer’s warranty transfers over. You’ll also have to have the cash for the full selling price or a lender willing to issue a check to a private seller. Finally, you’ll likely have to furnish your own CARFAX vehicle history report to know if the car’s been in an accident and other important details.
Most new car dealerships have a used car section where they sell some of the better trade-in vehicles they get. New car dealerships are generally very selective about what vehicles they offer on their used car lots because pre-owned cars are a key profit driver for many of them, and they can ill afford to get a bad reputation.
Most new car dealers also put trade-in vehicles through a rigorous inspection and reconditioning process by certified technicians to ensure they are as close to new as possible. However, you can’t expect perfection, as small dents, scratches, scuffs, and scrapes may go unrepaired. These dealers generally offer some type of warranty to protect you in the short term. Finally, new car dealers often have relationships with lenders and can set up the financing for you, or you can secure your own financing and shop as a cash buyer.
New car dealerships also often have certified pre-owned (CPO) cars. These are vehicles branded under the same name as the dealers — a Chevy dealer will have CPO Chevy models — that include longer warranties and sometimes qualify for special financing.
The main downside to buying a used vehicle from a new car dealership is the price, as you can expect to pay top dollar. Also, you have to go through the headache of dealing with salespeople who may repeatedly call you after looking at a vehicle and try to pressure you into buying.
Used car dealerships are seemingly on every street corner in larger cities. Depending on the dealership’s focus, they can offer any type of vehicle, ranging from $1,500 A-to-B transportation to premium luxury and sports cars.
The benefit of a used car dealer is its smaller footprint and less overhead generally means they are slightly less expensive than a new car dealer. And some used car dealers have a massive selection from all different automakers. Plus, these dealers often offer at least some type of warranty.
Used car dealerships also generally have lenders they use regularly for auto loans so they can set you up with a loan on the spot. You can also secure your own financing and walk into the dealer as a cash buyer.
The major downside to used car dealers is their quality. Generally, used car dealers are buying auction vehicles — often cars deemed unfit for a new car dealer to resell — and quickly inspecting them so they can sell them at a profit. The hasty nature of this can lead to low-quality repairs and overlooked flaws that could cause future problems.
Used car dealers are also pricier than a private seller, and you often deal with the same pushy salespeople as you would at a new car dealership.
Buy-here-pay-here used car dealers offer low-priced used cars with in-house financing. You put down the amount the dealership wants then make weekly, biweekly, or monthly payments directly to the dealership.
The key benefit of buy-here-pay-here car dealerships is they are the lender, so they can approve virtually anyone for financing. They specialize in people who can’t get financed anywhere else. Often, they are also great for people on a very limited budget because they generally offer low down payments, and they can sometimes align the payment with your payday.
While buy-here-pay-here car dealerships are good for people with bad credit, they come with significant downsides. The first issue is the interest rate they charge is generally sky high — far higher than any traditional lender. Second, they often buy the least expensive cars at the auction, patch them up and sell them, leading to frequent quality issues. Finally, the warranty coverage from buy-here-pay-here car dealerships is generally minimal at best.
There are various used car auctions throughout Canada offering a wide range of vehicles, including repossessed vehicles, trade-in vehicles dealers didn’t want, unsold dealer inventory, and even some private-sale vehicles.
The key benefit to these auctions is pricing. While auction cars generally sell at a fair price, you can sometimes score a great deal. Also, the variety you’ll find at auction is generally unmatched — all years, makes, models, and even some customized vehicles.
The downside to an auction is there’s no opportunity to inspect the vehicle, nor has it been through more than a quick look over by the auction company. You could win a car at auction only to learn there is a major mechanical flaw or vehicle history issue. Also, auction cars rarely include a warranty unless it’s a late-model car with the balance of the factory warranty on it.
A relatively recent trend is the online car dealership. You can find and purchase your vehicle from an online car dealership, and they will deliver it to you — generally for free.
The benefits of buying a car online are plentiful, starting with the selection. With real estate dedicated solely to storing their inventory, online dealers can have hundreds of pre-owned vehicles to look through. Also, with no salespeople to pay, no brick-and-mortar overhead to pay, online dealers generally have a lower price range than physical dealerships. There’s also no pressure to buy a car or any add-ons, like extended warranties and GAP insurance, though they are generally available at your discretion.
These dealers also generally have models from every major automaker and for all budgets. Plus, they can generally secure financing and will pick up your trade-in vehicle.
There are some downsides to online dealers, but Clutch, Canada’s first online pre-owned auto retailer, has solutions for most of them.
First, you only get to see images of the vehicles online and don’t get a physical test drive or inspection. At Clutch, you may not be able to test drive the vehicle immediately, but we offer a no-risk 10-day or 750-km test-own period. You can fully inspect and drive the vehicle within this period, and if you don’t love it, you can return it for a refund or exchange it.
Clutch’s 210-point inspection and reconditioning process also finds all the obvious flaws inside and outside the vehicle. We then add notations on each vehicle page where the flaws are and close-up images of the flaws so you know what to expect.
Second, there’s the additional fear of longer-term mechanical issues that may go undetected initially. Clutch solves this with its 90-day or 6,000-km warranty it adds to every pre-owned vehicle it sells. Plus, there is an optional extended-protection plan for up to eight years.
Clutch is Where to Buy a Used Car in Canada
If you’re seeking the perfect balance in where you’ll buy a used car in Canada, Clutch has everything you need. From quality pre-owned vehicles to a stress-free buying experience to a 90-day or 750-km warranty and available extended warranty plans for extra peace of mind. Clutch has it all.
We have a wide selection of vehicles to choose from, including all the major automakers: Honda, Chevrolet, Kia, Nissan, Toyota, BMW, GMC, Lexus, Mazda, and more. Plus, we have all the body styles you may need, including coupes, hatchbacks, sedans, SUVs, and even pickup trucks. You’ll never struggle to find the right car at Clutch.
Got a trade-in vehicle? We will give you a firm offer online and pick the vehicle up too.