Why Canada’s used-car world is becoming a buyer’s market

TORONTO — The balance of power in the used car market is shifting towards shoppers as improved data and online offerings create more opportunities to push for the best price.

A fast-evolving online marketplace is providing more intelligence on the fair value of cars, said Cliff Banks, a Detroit-based auto retail expert.

“I don’t know that it can be any more transparent…they all provide intelligence on the pricing and the deal of the vehicle, whether it’s a good deal, a fair deal.”

Kijiji Canada recently announced it will add a standalone auto sales site that will roll out later this year to keep up with shifting expectations. The site will add reviews of dealers as well as market pricing information from Carproof.

“The key feature for us, and one of the biggest, the biggest win for us is what’s called price transparency or price analysis,” said Matt McKenzie, general manager at Kijiji Canada.

The online classified company, owned by eBay, already boasts of being the largest player in the Canadian market with about 500,000 vehicle listings. Autotrader, owned by Etobicoke-based Trader Corp., lists about 444,000 vehicles on its site while there are many other offerings on the market as well.

Listing companies are boosting their online presence as the used vehicle market is set for significant growth, said Dennis DesRosiers, president of DesRosiers Automotive Consultants.

“There’s tremendous opportunity, and that brings in all the different retail players and their approach of, how do I get a piece of that?”

While new vehicle sales are expected to be largely flat at about two million this year, the used vehicle market is set to add half a million more in sales in the next three to five years, on top of the three million that changed hands last year, said DesRosiers.

The rise in the used vehicle market comes as improved quality in the past decade means cars and trucks are lasting much longer, allowing for a potential lifespan of four to six owners from the two or three expected not long ago.

“It takes 23 years to remove the vehicles from the road now, a decade ago it only took about 12, so it’s essentially doubled,” said DesRosiers.

Used vehicles also offer margins that are two to three times higher than for new cars, adding to their appeal, he said.

The quality and information improvements have significantly changed the overall used retail market, said DesRosiers.

“It’s not that far long ago, call it 15 years ago or maybe 10 years ago, where the used car market was largely a culture of deceit…even if the online capacity was there, there was just so much riffraff in the used car market that it was very dangerous. A lot of that has changed.”

The improved access to data means used-car retailers have to be more transparent and competitive about their pricing, said Jamie Tekela, director of pre-owned operations at Pfaff Automotive Partners.

“You need to really justify what you’re asking, why you’re asking it, and you can’t go asking $500 more for the same Honda Civic with the same mileage. It just it doesn’t work any more.”

“It’s night and day, to be perfectly honest. It’s gotten a lot more customer friendly,” he said.

The improved information on crash reports, comparable sales, and other metrics hasn’t done away with potential negotiations but does give more justification, said Jamie.

“There’s always going to be negotiations when trying to buy and sell vehicles, but with so much information available to each and every one of us, it’s a lot easier to explain our rhyme and reason why we’re asking what for a car.”

Buying a used car? Tips to find the right ride

While cheap loans can make buying a new car seem attractive, opting instead for a used vehicle is sometimes the better choice.

Let’s be honest, the new car smell is great but it’s not always worth the thousands of dollars a hunk of metal depreciates the minute it’s driven off the lot.

There are a few things to consider when shopping for a used car so that the savings don’t shift gears into pricey repairs and headaches down the road.

Here are four tips to help you when shopping for a used car so that you can find the right vehicle as smoothly as possible.

Here are four tips to help you when shopping for a used car so that you can find the right vehicle as smoothly as possible.

Take it for a spin

This is your first chance to see if the car drives the way you like and whether there are signs of trouble with how it hums along.

When starting up the car for the first time, it should fire up easily. Look at the dashboard and keep an eye out for warning symbols like a check engine light. If the instrument panel lights up like a Christmas tree, it’s not worth shifting it out of park.

Automotive Retailers Association president and CEO Ken McCormack says shoppers should look for other problem signs in the car as they’re driving along.

“It shouldn’t pull in any direction or vibrate and shouldn’t give any excessive road noise,” he says. “When applying the brakes, the pedal should be firm without any pulsation or noticeable feedback.”

Shifts should also be smooth and the engine shouldn’t hesitate or stutter, he says. And don’t forget to look at what’s going on behind you as you drive away.

“Any blue or black smoke from the exhaust as well as any burning smells or unpleasant odours from the car should be a red flag.”

Get the history

While a seller might claim that a vehicle is “accident free” and only ever had one owner, a bit of research can easily tell you whether that’s true.

McCormack suggests buyers get a vehicle history report for the specific car they’re interested in.

“Vehicle history reports have come a long way in the last ten years,” he says. “Currently the best option for Canadian car shoppers is Carproof.”

Such a report can be provided by the seller, or it’s something the buyer can get on their own online.

Carproof’s vice president of marketing Joe Varkey says they can also tell buyers if a body shop provided an estimate to repair damage – even if an insurance claim wasn’t actually made.

“The difference is that if you saw a $1,000 estimate but no insurance claims, you know something happened. It may not be anything significant, but you know something.”

This additional information can help buyers negotiate a better deal on the car if they don’t mind that there’s been minor damage, as long as it was repaired properly.

“And if the seller is telling you a car is perfect, you run a Carproof, and you see a $15,000 claim on it, then you know something about the seller,” Varkey says.

In addition to the ownership, odometer and claims history of a vehicle, a Carproof report can also tell buyers where a vehicle has been registered over the course of its lifetime.

“Let’s say you’re in B.C….is the car you’re looking at from B.C., Alberta or Quebec?

You may want a car that has never seen salt,” he says.

A vehicle with a lien against it, or if it’s branded (a classification attached to severely damaged vehicles), should be avoided.

Inspect, inspect, inspect

After going on a test drive and looking over a history report, there could still be problems lurking under the hood.

But wait, shouldn’t it be OK if a vehicle passed its provincial Private Vehicle Inspection (PVI)?

The PVI “really only skims the surface and covers mostly safety related issues,” McCormack says.

While a PVI might tell you that there’s enough tread on the tires and the brake lights work, it could miss other mechanical issues like a serious oil leak.

Some shops may offer a report based on their own mechanical inspection, in addition to the PVI. If a dealership does offer you its own in-depth mechanical inspection report, has a good online reputation, offers a warranty and includes a return policy, McCormack says their inspection may be enough.

But you should also consider taking the car to your own mechanic, to get it inspected, especially if you’re buying in a private sale.

“A secondary inspection is like insurance, so if it makes you feel better and you determine that it’s good value, then I would recommend it for peace of mind,” McCormack says.

Get a deal that’s true

If you’re happy with the vehicle and its mechanics check out, it’s time to close the deal. But before you commit, make sure the price is right. And yes, there’s such a problem as a car being too cheap.

“Nothing, absolutely nothing should scare a purchaser more than if a vehicle is dramatically lower priced than comparable (models),” McCormack says.

Just as you do research to find the right car, it’s also important to research the seller.

McCormack says buyers should run a check on the Vehicle Safety Authority’s website to make sure a shop or sales representative is in good standing.

If you’re purchasing privately you have to be more careful. McCormack suggests shoppers avoid curbers, because the buyer would have nearly no recourse if something were to go wrong as opposed to dealing with a licensed dealer.

Article reference:
https://bc.ctvnews.ca/buying-a-used-car-tips-to-find-the-right-ride-1.3482254

Tips to Pay Your Used Car Off Faster

When you are checking out used cars, one of the biggest advantages is the cost. These will almost always be less than the same make and model that is new. When you are paying less for a vehicle, you can pay it off faster. However, there are a few tips to make it easier to get the loan paid off so that you can eliminate your monthly payments.

Put More Money Down

Even if you put an extra $500 to $1,000 down, this is less money you have to pay back with interest. This allows you to pay your vehicle off faster and it can also save you money overall. Consider your timeline for paying off the vehicle and do the math to determine the down payment amount that fits into your plans.

Pay More With Every Payment

Add to your payment every month to make each payment larger. You can choose any amount that you can afford during that given month. For example, add an extra $50 to your payment in August and September, but when the holidays come up and money is tight, plan to pay an extra $25. Every dollar counts and works to get the loan satisfied faster.

Make an Extra Payment Every Four Months

This is relatively easy and most people are able to afford this. This cuts off three months of payment per year. If you have a two-year loan, you will pay your vehicle off in 18 months instead of the full 24. Simply divide your monthly payment by four, put this much aside and once four months is up, make the extra payment.

You can use all of these tips together so that your loan is paid off before you know it. Just talk to the dealership and see if they have any rules about paying off a loan before it is set to be complete.

3 Ways Dealers Help You Find the Perfect Used Car

Despite popular beliefs, seeking the assistance of a dealer while searching through the multitude of available used cars is a smart move which any budget-conscious buyer should consider when in the market for a ride of any shape, size or brand. There are many ways in which using our dealership for assistance throughout the shopping process makes the whole experience simpler and much less stressful, but the top three include:

We Offer a Larger Selection

Whereas you may have to drive hours to view a single car when shopping among private sellers, our large selection of vehicles gives the ability to view many new cars at once, increasing your chances of finding the perfect used car quickly. This saves you time, money, and plenty of energy with which to enjoy your newly-purchased ride after the decision has been made.

We Offer Financing Options

In most cases, even used cars have financing options available for buyers of all backgrounds. This means that you won’t be restricted to one or two cars on the lot that fit within your immediate budget. Together, you and our expert staff members can work out a payment plan for practically any of our used vehicles, expanding your opportunities and helping to ensure you find the right car for your needs.

We Offer Quality

Aside from offering an excellent quantity of vehicles, we always ensure that our used cars present quality under the hood as well. Before selling cars to customers, we inspect the vehicle and make repairs as necessary to ensure you’re getting what you pay for: a reliable ride that’ll get you from one place to another without a hassle. When you find the right car, you’ll never have to worry about it being a lemon.

These are just some of the ways in which we can help you find your perfect used car and get you on the road again in no time. Check with us to learn more about your options.

Why Buying a Used Car From a Dealer Makes Sense

If you are in the market for a new used car, you have a couple of choices. The first choice is to buy from a private seller. This has many obvious disadvantages, including only getting to look at one car at a time. The second and we believe better choice is to buy from a dealer. The benefits to this approach for buying used cars are many and powerful.

Selection

Our lot is are filled with hundreds of great pre-owned cars for you to look for all in one place. It is like going to the candy store, with a large selection of desirable treats for you to drool over. You can consider sedans, trucks, crossovers, SUVs and other styles of vehicles, all in one convenient place. We also have a full assortment of price ranges, colors and ages. So if you are looking for a sports car that is bright yellow and priced under $10,000 we are likely to have it.

Convenience

Not only do we offer hundreds of cars for sale, we can also hook you up with financing and service. Our finance department can set you up with a loan that makes sense for your budget. We can work with you to get monthly payments that are affordable, and we can even take care of registering the car for you.

Our service department can handle all of your car’s maintenance needs. Whether you need an oil change, new brakes or engine work, our expert team of mechanics can do the necessary work. We can set you up on a path of regularly scheduled maintenance that will take the sting and surprise out of car repairs.

Relationship

When you buy one of our used cars, we hope to develop a lifelong relationship with you. Our goal is to take care of all of your car needs, now and into the future.

Do Your Homework for Hassle-Free Car Shopping

Setting out to shop for used cars can be daunting. There are thousands of cars out there, and selecting the perfect one takes time, patience and common sense. A snap decision based on eye appeal might leave you with an expensive car that doesn’t suit you. Nor do you want to snatch the cheapest car and find yourself the proud owner of a lemon.

Before you head to the car lot, decide how much you can afford for the down payment and the overall car. Arrange the necessary financing. A good rule of thumb is to keep car payments lower than one fifth of your net pay.

Once you are at the dealership, shop with purpose. Have an idea of what you want, research and compare prices, and make sure you get key details on used cars of interest from the seller. Ask about the car’s history and performance. You can fact check vehicle records easily through several online databases.

When you’ve found one or more used cars that appeal to you, get cozy with them. Test seats, explore trunks, pop hoods and check fluids. Go over each car for structural issues. Don’t worry about minor scrapes, but do watch for misalignment such as closed doors that don’t align with the frame, a sign of previous damage. If you’re not sure what to look for, bring a car-wise buddy or consult the owner’s manual.

Last but not least, take the car out for a spin. Accelerate to highway speeds, test the car on corners and hills and brake hard to check for braking capability. Consider driving the car to a mechanic for an inspection. When you settle on a car, your next step is to negotiate with the dealer. If you’ve done your research, you will know the car’s value and can bargain accordingly. If you have prearranged financing, the dealer may compete by offering lower rates to your benefit.

Doing your homework is key to finding the right used cars. Follow the steps above to buy a car that will go for thousands of miles. Leave a comment Researching Used Cars

Smart Shopping for Used Cars

Buying a used car can be daunting if you haven’t purchased one before. There are always concerns about the condition of the vehicle, but if you work closely with a reputable dealer specializing in used cars, you can get a dependable vehicle for a great price. Asking the right questions and doing some research is part of the process.

Find a Dependable Make and Model

Kelley Blue Books and online consumer groups can help you find makes and models that are rated well for reliability and low repair costs. If a car doesn’t have a good resale value, there may be a reason. Don’t forget to check gas mileage and maintenance costs as well.

Test Drive Used Cars

Never purchase any vehicles without taking them out for a test drive. Listen to the engine, pay attention to any knocking or pinging and get a feel for how smooth the ride is. When you test drive, make sure you take the vehicle on local roads as well as the highway. Trying a used vehicle under a variety of condition will help you narrow down your options to cars that you’re truly comfortable driving.

Get a Vehicle History Report

Request a vehicle history report from one of several online services. You’ll need the vehicle identification number (VIN number), which any auto dealership can provide you. You can also see it in the lower corner of the driver’s side window when you’re looking at it from outside. When you check the report, look for accidents, water damage and other issues that could affect the car’s performance.

Consider Other Costs

Insurance, monthly maintenance and fuel economy all figure into the actual cost of a car, not just the sticker price. Get insurance quotes, look into maintenance costs and check the mileage estimates. All of these will impact the car’s actual cost.

Proper research and working with a trusted automobile dealership will guarantee you the best price for your next used car.

How to Pay for a Used Car Without Breaking the Bank

Sometimes it seems like cars break down at the worst times. You might not be in a great place financially when your car becomes inoperable, and buying a new car is not always possibly. When you need a car, and you have limited funds, a good used car might be the best thing for you. There is a wide-variety of used cars on the market. With a little bit of research, you might find a used car will work well with your current lifestyle.

 

Know Your Budget Before You Begin

 

Before you start your travels to dealerships, you need to consider how much money you can afford to spend on a used car. You could save a lot of money, if you pay for the car in full. If this is not possible, consider making a large down payment. Obviously, when you finance your car, the cost is more because you are paying interest each month when you make your payment. Traditionally, when you purchase a used car, rates are higher and the financing periods are usually shorter compared to purchasing new cars. One tip most financial experts offer is to never spend more than 20 percent of your take-home pay on a car.

 

Estimate Future Expenses

 

Always do research on the car you want to purchase to see if certain parts need to be replaced more frequently. You might have a particular car in mind that you’d like to buy, but if the water pump in that model has a history of failing, than you might want to consider another car. When you purchase a used car, there’s always a chance you will have to forgo funds for maintenance and upkeep. An older car obviously has more wear and tear on it than a new car. Having savings put aside is important, since you don’t want your car to cause you unnecessary debt.

3 Factors to Consider When Looking for a Used Car Dealership

People often dread looking for used cars, which is understandable since not every car dealer has an outstanding reputation. However, there are several factors you can use to narrow down which dealership you ultimately choose to work with.  Keep these in mind the next time you are in the market for a used car.

 

Vehicle Selection and Availability

 

One of the first things you should consider when you are choosing a car dealership is whether or not the dealer offers the type of vehicles you are interested in. Not all dealerships are the same. The selection can vary depending on the location of the car dealership. Although car dealers can place an order for the type of car you are looking for, it may take a while before you actually get that vehicle.

 

Customer Service

 

Another key factor when it comes to selecting a car dealership to work with is customer service. You want to be sure you choose a used car dealership that places high emphasis on customer satisfaction not just making their monthly sales quota. One simple way to evaluate a potential dealership’s customer service is by looking at previous customer reviews.

 

Price Range

 

Finally, the price range of cars at a used car dealership can be another determining factor in whether or not you choose to work with that dealer. It is important to note that you shouldn’t choose a dealership simply because it has the cheapest prices. A cheaper price may cost you in another area such as good customer service. If you have the opportunity, try to compare the average costs of the car you are interested in from several different dealerships.

 

As you can see, these are just a few factors that you ought to think about when you are looking for used cars. Just remember to compare several different car dealership options before you decide to work with one.

Steps to Prepare Yourself for Buying Used Cars

Buying used cars is a big step in your life and there usually is no point in rushing it. When making such a major purchase, it is a good idea to approach the decision with care. Here are some things that you can do to ensure that you’re ready to buy a car when the time comes.

 

Know Your Credit Score

 

Your credit score and history will have a big impact on the type of dealership financing you qualify for, and ultimately the type of car that you get. Keep in mind that it can sometimes take several weeks or months to get errors on your credit report straightened out so do this as soon as you can.

 

Get Preapproved

 

Dealerships usually have pretty good financing deals, and you might not have to have outstanding credit to qualify. It is usually a good idea to get preapproved for a loan before shopping for a car so you know what your limitations are in terms of pricing. This will also give you a good starting off point for negotiations down the line.

 

Unload Your Current Vehicle

 

Decide whether you are likely to get a better deal trading your current car to a dealer or selling it through a private sale. There are pros and cons to doing it either way, of course, but it depends on what best fits your plans.

 

Determine Your Budget

 

Last but not least, figure out your budget for your new car purchase. You might get preapproved for an amount much higher than what you are actually able to afford so it is vital that you come up with your own number for how much you can afford to spend on a car.

 

Buying a car is an exciting process. It can be even more fun when you take the financial steps beforehand to ensure you make a good choice and are mentally and financially prepared for it.