Buying A Used Vehicle From a Dealership

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Buying A Pre-Owned (Used) Vehicle From a Dealership

Did you know that most people opt to buy a used car from a franchised dealership rather than purchase privately. Why? Well, many consumers worry about the incredible uncertainty in buying a used vehicle from a private listing. Knowing that the purchase will be backed up by a dealership gives great peace of mind.

Take a peek at our article entitled Why Should I Buy From a Dealership, where we've covered all the benefits of buying from somewhere you can rely on.

In this article we discuss everything you need to know about buying a pre-owned vehicle from a dealership. How do you find the right car, the right dealer, and get a great deal? This is how:


Start by researching the vehicle you’re interested in. To begin with, you need to determine that the model you're looking at isn't a lemon (some just are), and that it has great ratings well past the first year. So, read consumer reports, web reviews, and car comparisons, delve into YouTube.

Then, it's a great idea to research what these models typically sell for in the market. Here are some of the most popular and credible review used vehicle comparison and review sites in Canada:

Your next step is to determine which dealerships have the best pricing and value for the vehicle you’re looking for.


Now that you have honed in on a few vehicles, investigate each specific vehicle thoroughly. Look at more than just the price. You need to determine:

  • What are the vehicle’s mileage and history?
  • Does the dealer have a record of the vehicle’s previous service history? If so, did the previous owner regularly maintain the vehicle?
  • Has reconditioning been done to the vehicle to get it ready for sale? A dealership that has reconditioned a vehicle will show you what was replaced or repaired and how it adds value to the vehicle.
  • Do you have estimated future maintenance costs for this vehicle cost?  If they haven’t been replaced, how much wear is left on the tires and brakes?  Luxury brands often have much higher maintenance costs.
  • Has the vehicle been in an accident? A vehicle that has been in an accident isn’t necessarily a bad thing. It may turn our to be a great deal, providing that it has been fixed properly and priced accordingly. You will likely be able to buy it for less than other similar vehicles that haven’t been in an accident.  Frame damage, flood, or fire are huge red flags and these vehicles shouldn’t be considered unless you get an outside inspection.
  • Where did the vehicle originate? How many previous owners? Most good dealers will provide a copy or a link to the Carfax report right on their website which will give you all of this information. In our rainy climate, we are blessed to miss out on the rust that other provinces have to contend with. Steer clear of rusty cities of origin.
  • What was the vehicle used for before? While ex-rental cars can have a stigma attached to them, they can usually be purchased below market pricing. While they have had numerous drivers, these cars have been cleaned and maintained consistently by the rental car company and are typically still under warranty.

Dealership Reputation & Policies:

So, you've done your research into vehicles. Now, investigate the dealership. What is the dealership’s reputation?

You can find online reviews from other several different independent business rating sites including:

A quick Google search will give you all you need to know about the dealership and how they treat their customers. Be sure to determine what the dealership’s policies are and whether they stand behind their vehicles after they sell them:

  • Does the dealer have a money-back guarantee? Some dealers are now offering a 2 or 3 day money-back guarantee if you take delivery and decide that the car or truck is not right for you.
  • What about an exchange policy that would allow you to exchange the vehicle within a specified period of time (usually 7 -30 days)? If the dealership won’t offer either then we suggest that you find a dealership that will.
  • Check on what warranty or other guarantees are included. If a vehicle does not have any factory warranty remaining, many dealers include a short powertrain warranty and will also offer a free warranty on some basic items like any bulbs, wiper blades, tires, brakes, and vehicle battery.

Finance & Down Payment Options:

It is important to focus on both the monthly payment and the total price of the vehicle. If you finance your vehicle, changing the term of the car loan, down payment, and the interest rate can make a significant difference to your overall cost at the end.  Consider the scenario below.

Purchase price $25,000 same same
12% tax (PST + GST) $3000 same same
Total purchase price $28,000 same same
Down Payment $0 $0 $5000
APR (annual percentage rate) 5% 10% 10%
Term in months 60 72 72
Monthly payment $645 $519 $426
Interest paid (Cost of Borrowing)* $2951 $9348 $7879
Total cost $29,722 $35,014 $33,345

The 2nd customer ends up paying $6397 more over the course of the finance agreement because of the higher interest rate, and longer-term finance that the first customer. Similarly, a down payment from the 3rd customer at the exact same interest rate and payment period as the 2nd customer significantly reduces the amount of total interest paid over the car loan.

Use an online auto loan calculator tool to see for yourself before completing your purchase decision.

What is a Good Interest Rate?:

Some good generalizations for finance terms on used vehicles in Canada are:

  • 1 year old = maximum term of 96 months
  • 2-3 years old = 84 months
  • 4 years = 72 months
  • 5 years = 60 months
  • 6-7 years = 48 months
  • Older units = Generally 36 months if available

Interest rates will vary but a rule of thumb is the newer the vehicle, the better the interest rate. Providing you have good credit, you should be able to get a rate of 5 – 7% for newer used vehicles (2016 and newer) and 7 – 8% for 2010 – 2012 vehicles. The rate that you qualify will also depend on your credit rating. If your vehicle is a Certified Used Vehicle you may be able to get an even lower rate, subsidized by the manufacturer.

Learn all about why your credit is so important here. 

Consider a “One Price” Dealer That Offers A No-Haggle Buying Process:

If the thought of going in and needing to negotiate to get a fair price for the vehicle you are interested in sounds daunting, why not consider a no-haggle buying process?

No-haggle does not mean that you pay more for a vehicle, but rather the value is determined by how it compares to similar vehicles in your local area. No-haggle dealers often have the best upfront pricing on vehicles as they are not artificially inflating prices to leave room to negotiate the price back down.

If you had a bad car buying experience in the past, a no-haggle dealership will give you a vastly different feeling. But the key here is to do your homework in advance and understand what the market value of the vehicle is that you are considering.


Test Drive & Vehicle Walkaround: 

Now that you have narrowed it down to a few vehicles, contact the dealership by phone or e-mail and set up an appointment to view and test drive. Set a specific time with the dealership so that you have a Sales Representative that is ready for you, and has the vehicle ready for you to test drive.

So, the next step is to assess the vehicle. Has the vehicle been detailed (cleaned) properly? Are there any visible dings or dents? Often a few imperfections are part of buying a used car; while excessive damage should throw up a flag that the dealer has taken short cuts mechanically. But a perfect car aesthetically could also have mechanical shortcomings, so use your best judgment. After all, it’s cheaper to repair a few dents and perform paint touch-ups than it is to replace or repair mechanical items.

Don’t let the shiny car fool you, on the other hand, don’t rule out the vehicle with a few imperfections.

What about a 3rd party inspection? Most dealerships will allow you to take the vehicle to another mechanic. If you are buying from a reputable dealer who backs their used vehicles with a mechanical inspection, warranty, exchange, or return policy, and the vehicle hasn't been in any major accidents it probably isn’t necessary.

True Cost of Ownership 

When purchasing a vehicle it’s extremely important to not only consider the upfront cost of buying or financing the vehicle, but also the full cost of ownership. What does this mean? On top of the cost of purchasing or financing the vehicle (including taxes and fees), you also need to consider the following costs that are related to owning and maintaining the vehicle, such as:

  • Depreciation
  • Fuel expenses
  • Vehicle maintenance and repairs
  • Car insurance

All of these vary greatly depending on the vehicle that you choose. The Canadian automobile association has a driving cost calculator that can help you get a rough idea of how big of an impact your vehicle choice will have on your budget.

Final Purchase:

Keep your eye on the prize. Keep all of the above items in mind when making the decision to move forward. Dealers vary immensely on negotiation. Many will not move on their pricing by providing you with their best price upfront. Others may offer discounts off their asking price but you may be forced to negotiate or haggle to get it.

Ask the dealership for a market value analysis. They should be willing to provide a print out of similar vehicles in the market that compares how their vehicle is priced versus other dealers and/or private listers.


One Last Piece of Advice:

Keep an open mind when heading to the dealership. At KIA Victoria, our professional sales team are trained to find the Right Vehicle for your lifestyle. Not all cars fit all lifestyles. We've all been caught buying something that isn't quite right for us in the long-term, and while that might be okay on a pair of shoes that pinch, it's a devastating pill to swallow on a high ticket item like a vehicle.

Consider the advice of your salesperson.



And finally, if you have done your research, you will know what to look for in your vehicle, and what it should be priced at. If it sounds too good to be true, it probably is. If a vehicle is priced considerably below other similar vehicles in the market, there is likely a good reason for it. Make sure that you understand why before going ahead.

That’s it! You are now ready to buy a great used car, get an amazing deal, and buy a car that you’ll enjoy for years to come.

The good news is that KIA Victoria prides itself on provide the best possible dealership experience. We believe in finding you the Right Vehicle, the Right Way, For Everyone. Check out our Used Vehicle policies here. We promise you won't be disappointed.

check out our used inventory here.
don't forget to look at our green vehicles here too!
to book a test drive or speak with a sales team member click here.
to speak with a finance manager to get preapproved for a loan, click here.