Start at Home

Smart buying starts at home

Set your budget with all the costs in mind
  • Taxes
    • New vehicles: charged 7% PST and 5% GST, and may include a luxury surtax depending on the vehicle
    • Used vehicles: charged 7% PST and 5% GST, but only on the difference between purchase price and trade-in value (tax advantage); luxury tax may also apply
    • Used vehicles bought privately: charged 12% PST
  • Tire levy
  • Negotiable dealer fees such as documentation, administration and finance placement fees. See this fact sheet on dealer fees.
  • Extras you may want or need
  • The cost of fuel and maintenance
  • Insurance
  • Licensing fees 
Know your vehicle needs
  • Gas mileage
  • Seating capacity
  • Towing capacity
  • Cargo and trunk area
  • Snow or other traction needs
  • Parking height and size restrictions
Research the vehicles that meet your needs and your budget
  • Visit a library or bookstore to read consumer and automobile magazines
  • Go online to consumer and automobile websites
  • Talk to your mechanic about which vehicles offer good value
  • Study ads to get an idea of prices
  • Use the Canadian Black Book to value your trade-in

J.D. Power reports that consumers spend an average of 17 hours researching vehicles before they buy.  Twelve hours, or 70%, of that research is done online.

Consider things other than price
  • Safety
  • Gas mileage
  • Reliability
  • Warranties
  • Vehicle features and options
  • Resale value & depreciation
Know the benefits of buying a used vehicle from a licensed dealer
  • Dealers must comply with strict standards
  • Dealers often have financing available
  • Dealers often offer a range of warranties
  • Many dealers have service departments
  • Dealers make an investment in their staff, operations, reputation and community
  • Dealers contribute to a customer compensation fund for eligible claims
  • The Vehicle Sales Authority can assist you only if you buy from a licensed dealer
  • There is a tax advantage if you use your vehicle as a trade-in at a dealer
Know the strict standards dealers must follow
  • Dealers must disclose if a vehicle has been registered out of province
  • Dealers must disclose if a vehicle was used as a lease, rental, taxi or emergency vehicle
  • Dealers must disclose prior damage over certain limits
  • Dealers must disclose anything that would be material to your decision
  • Dealers must guarantee that their vehicles are free of liens
  • Dealers must comply with strict standards when leasing a vehicle
  • Dealers must offer used vehicles that meet minimum safety requirements, or
  • Dealers must declare vehicles as Not Suitable for Transportation and be towed from the dealership
Buying online or at a distance

Many dealerships offer the option to shop online.  However, most still require a visit to the dealership to complete the purchase because the laws regarding these sales are more complex.

  • A long distance contract can be canceled, but only in very specific situations. See the Distance Sales Contracts Fact Sheet 287 kB for more information.
  • The Sale of Goods Act says a person is not deemed to have accepted the goods until they have had a reasonable opportunity to inspect them on delivery and the seller must provide a reasonable time to inspect. In other words, the deal is not actually done until a reasonable opportunity to inspect has occurred.  See the Right to Inspect Fact Sheet 287 kB .
Avoiding online scams
  • Check the VSA list of online scams
  • Is the business licensed in the state or province indicated?
  • Does the address on Google Maps Street View look like a dealership
  • Who controls the website? Paste the web address of the business into the Whois Lookup to learn when the webpage was created and the registrant of the web domain. The person registering web domains may be a proxy or agent, but the address may still be of interest.
7 Things to Know

Things to know before you go

Choose the right dealer
  • Talk to friends and family to see if they can recommend a dealer
  • Check to see that the dealer is licensed with the VSA
  • Check with the Better Business Bureau of Mainland B.C.or Vancouver Island
Know the advertising rules
  • Whenever the price of a vehicle is included in an advertisement, it must be the total price of the vehicle.  Total price means the total amount that you must pay to purchase the vehicle.  This can include dealer fees shown in the fine print of an ad.For a new vehicle, this includes:
    • The cost of any accessories or optional equipment that is physically attached to the vehicle
    • Any transportation charges
    • The cost of any pre-delivery and inspection service charged by the dealer

    Advertising of financing and leasing options must include any interest or other costs charged and the finance calculations.

Understand documentation and other dealer fees
      • Ask about these fees while negotiating a price
      • Special charges that are clearly stated in advertising or openly discussed as a part of the negotiating process are acceptable under B.C.’s consumer legislation
      • Standard or required fees that are not shown in advertising, added after the customer believes a final price has been negotiated and not discussed until the final papers are being signed, are likely illegal.  See the Understanding Dealer Fees Fact Sheet. 287 kB
Savings claims must be real
        • A dealer must not advertise or claim that a price benefit or savings exists when it is not a true savings
        • When a vehicle is advertised at a sale price, the sale price must be a real cost saving for the purchaser
        • For example: If a vehicle had never been sold at MSRP, MSRP cannot be used to calculate a savings.  However, simply stating the MSRP is acceptable.
If different prices are advertised
        • If a vehicle is advertised in different places, all advertised prices for a vehicle must be the same
        • Advertising includes newspaper, television, radio, internet and sticker prices
        • If there is a difference in pricing, under the Competition Act, you are entitled to the lowest price
Plan your buying trip
        • Purchasing a vehicle may take a few hours
        • Don’t be in a hurry when making an important decision and signing legal documents
        • Don’t take children, if at all possible
        • Bring someone you trust who knows about vehicles, financing and sales transactions
Find a salesperson who:
        • Makes you feel comfortable
        • Wants to find the vehicle that meets your needs
        • Answers your questions to your satisfaction
        • Wants to build a relationship for future sales
        • Displays their VSA Salesperson Licence
Deposits

Deposits

Know what your deposit is for

A deposit may be to:

        • Hold a vehicle for a period of time
        • Locate a vehicle from another dealer
        • Bring in a vehicle from the manufacturer
        • Arrange financing for a vehicle
        • It may be a down payment or partial payment
Get the deposit terms in writing

The deposit terms and conditions must be clear, so a dealer must provide the following in writing:

        • The purpose for which the money is taken
        • The amount taken
        • Under what circumstances the deposit will be refundable or non-refundable
        • Other terms, such as if the deposit will be apply to the purchase price of a vehicle

See a sample deposit agreement 287 kB .

Can a deposit be non-refundable?

Yes, a deposit may be kept by the motor dealer if the buyer does not carry through with the transaction as agreed.  This can be modified by an agreement between the dealer and consumer. It is best to get this in writing.  Sample deposit agreement 287 kB .

However, the deposit may still be refundable if the dealership cannot deliver on its promise to provide the vehicle, the price or the terms you agreed on.

Are there any return and exchange polices in BC law?

Vehicle sale agreements completed at the dealership are binding and there is no legal right to return a vehicle for a refund.  However, some dealers have return or exchange policies.  Get a copy of the policy in writing and be sure you understand the policy before you sign any documents.

Buying Used

Buying used at a dealership

What the dealer must declare

A written sales agreement for a used vehicle must include:

        • Whether the vehicle was brought in for sale from outside the province and the name of any other jurisdiction where the vehicle was registered
        • If it was used as a police car, taxi, emergency, lease or rental vehicle
        • Whether the odometer accurately records the true distance traveled
        • If the vehicle sustained damages which cost more than $2,000 to repair
What the dealer must disclose

You should be very clear about your preferences and requirements.  By doing so, you are indicating what is material to you as a buyer.  The dealer is required to disclose anything that would be material to your decision to purchase the vehicle.  This could include such things as:

        • Whether the vehicle was declared as salvage and rebuilt
        • Whether the vehicle was stolen and recovered
        • If the vehicle sustained damage under $2,000
        • The actual amount of any damage over $2,000
Is As is – Where is allowed?

A dealer may want to sell an older model vehicle As Is – Where Is or No warranties expressed or implied.   This means without completing any repairs and without any dealer warranty.  However, the vehicle must still meet minimum vehicle safety standards and it will still have an implied warranty under the Sale of Goods Act.  The dealer also has a duty to disclose all known material defects that exist at the time of the transaction.

Not Suitable for Transportation and Parts Only Vehicles

The law allows a vehicle to be sold as Not Suitable for Transportation if it is advertised, labeled and marked on the sale documents as such. There is no implied warranty when the vehicle is sold as Not Suitable for Transportation and you are required to tow the vehicle off the lot.

Get a vehicle history report
        • It’s now very common for dealers to provide a recent vehicle history report
        • If a vehicle history report is not provided, ask for one!
        • Or, get your own, if you’re serious about a vehicle
        • You will need the VIN or Vehicle Identification Number

Watch a short video on the importance of vehicle history reports.

CARPROOF

Complete Canadian and U.S vehicle histories including:

        • Accident type, date and the amount of damage
        • Provinces and states where the vehicle was registered
        • Negative branding, such as flood, salvage, etc.
        • Verified products provide cross-Canada lien and/or security interest information
        • Real-time data, including from ICBC
        • A free VIN decoder and flood check
        • More buying tips at CarProof’s Resource Centre
        • CarProof Vehicle History Reports is a Canadian provider

CARFAX

A U.S.-based provider of vehicle histories including, when known:

        • Accident type, date and the amount of damage
        • Provinces and U.S. states where the vehicle was registered
        • Negative branding, such as flood, salvage, etc.
        • Optional ICBC and lien report add-ons

CARFAX also provides a free recall tool and buying tips at carfax.com

ICBC Reports

ICBC Vehicle Claims History Report – Recommended for BC Only Vehicles

Get the following, if it’s available in ICBC records:

        • Vehicle title status – normal, rebuilt,salvage, or altered
        • Any damage or damages claimed through ICBC
        • The date the damage or damages occurred and its dollar value
        • Whether the vehicle has been imported into BC

ICBC No Details Report – Additional Fee
Get additional records for claims still in progress.

ICBC Vehicle Status Inquiry – Free
Get just the vehicle title status – normal, rebuilt, salvage, or altered

About mechanical inspections

Dealership Mechanical Inspections

A dealership mechanical inspection should provide a summary of the condition of the major elements of the vehicle.  Be sure to get a copy of this report, as it documents the representations made about the condition of the vehicle by the dealership.

Independent Mechanical Inspections

If a mechanical inspection report is not provided by the dealer and you are very serious about the vehicle, you should consider an independent inspection.  The age and condition of the vehicle, and who you are buying the vehicle from, will help you decide what type of inspection is right for you.

Private Vehicle Inspection (PVI) is not a mechanical inspection

The provincial Private Vehicle Inspection, or safety inspection, can be completed only by certified inspectors. This inspection checks that the vehicle meets the minimum mechanical safety requirements for parts such as brakes, lights, horn, steering, etc.  However, this is not a guarantee the vehicle is mechanically sound. The vehicle could still have serious engine, transmission or other problems which could involve major expense.  See a sample report or find inspection locations.  The BC Ministry of Transportation, Commercial Vehicle Safety and Enforcement certifies the inspectors.

Federal Vehicle Inspection

This inspection, completed when a vehicle is imported into Canada, is very limited.

About warranties

Some newer used vehicles can have the original manufacturer’s warranty or an extended warranty still in effect.  Be sure to confirm what will be covered and for how long or how many kilometers.  A third party warranty offered or sold by the dealer may offer limited protection for future repairs.  Or, you may be offered a limited warranty from the dealer for discounts on future repairs.

All warranties should be:

        • in writing and part of the contract
        • signed by the dealer, not just the salesperson
        • specific, with details of what is covered and for how long or how many kilometers
        • clear about where and how any repairs are to be authorized and done

Even if you are buying a vehicle with no representations as to condition or quality there is an implied warranty under the Sale of Goods Act.  A vehicle must be safe and suitable for transportation.  Every vehicle must last for a reasonable period of time given the normal use of the vehicle and the circumstances of the sale (such as price, etc.)  This implied warranty can be waived for a used vehicle.  Be cautious if you are asked to waive it.

About warranties

Some newer used vehicles can have the original manufacturer’s warranty or an extended warranty still in effect.  Be sure to confirm what will be covered and for how long or how many kilometers.  A third party warranty offered or sold by the dealer may offer limited protection for future repairs.  Or, you may be offered a limited warranty from the dealer for discounts on future repairs.

All warranties should be:

        • in writing and part of the contract
        • signed by the dealer, not just the salesperson
        • specific, with details of what is covered and for how long or how many kilometers
        • clear about where and how any repairs are to be authorized and done

Even if you are buying a vehicle with no representations as to condition or quality there is an implied warranty under the Sale of Goods Act.  A vehicle must be safe and suitable for transportation.  Every vehicle must last for a reasonable period of time given the normal use of the vehicle and the circumstances of the sale (such as price, etc.)  This implied warranty can be waived for a used vehicle.  Be cautious if you are asked to waive it.

Checking out a used vehicle on the lot
        • Check the upholstery and floor coverings for unusual or unexpected wear
        • Check to see that the heater, air conditioning, radio and other features work
        • Be sure that all the doors, windows and sunroof open and close
        • Look for a service sticker to match with the current odometer reading
        • Evaluate the condition of the tires and look for unusual wear
        • Check the trunk for the spare tire, jack and wrench
        • Check the paint, chrome and body for mismatched paint and repairs
        • Look for rust, as any visible rust could mean more underneath
        • Check the oil, transmission fluid and coolant for colour and fluid level
        • Any unusual smells may indicate leaks or mechanical problems
Test Drive Tips
        • Take time to drive the vehicle for at least 30 minutes
        • Drive it on the highway and on city streets
        • Test the brakes and all the gears
        • Turn off the radio to hear the engine, brakes, and transmission
Financing and Leasing

Financing and leasing

Financing or leasing?

This summary from Consumer Reports will help you weigh the pros and cons of leasing versus financing. Whichever method you choose, a contract is a legally binding document. Be sure to read the front and back of the agreement carefully and ask questions about all the terms and conditions before signing. See more tips for financing a car here.

Understanding financing

Both financing and leasing require the clear disclosure of the terms and conditions.  For information on credit (a loan) see this manual.  If you’re financing your vehicle and disability or life insurance are required, you must be given the opportunity to use your own insurance company or broker.  You should agree to the loan or lease terms before taking the vehicle home.

What are finance placement fees?

Finance placement fees are negotiable fees charged by some dealers to arrange financing with a bank or finance company.  These fees must be disclosed prior to the agreement being signed and the fee must be included in the Annual Percentage Rate calculations. It is improper for a dealer to indicate the fee is required by the lender if it is not.

Understanding lease agreements

If you can answer these questions you probably understand your lease agreement:

        • What is the total financial obligation of the lease, including the cost of all lease payments, plus all taxes, fees, and any down payments?
        • What would be the total cost to buy the same vehicle and finance the purchase instead?
        • What is the best retail price for the vehicle and what price is the company using as the basis for the lease?
        • What is the interest rate being applied to the lease and how does it compare with current loan rates for purchasing a vehicle?
        • Is there an option to buy the vehicle at the end of the lease?
        • Can you buy the vehicle during the term of the lease and are there penalties or additional charges if you do?
        • Can you terminate the lease before the date specified in the contract and are there penalties or additional charges if you do?
        • What is excessive wear and tear that will make you liable for expenses at the end of the lease?
        • How is extra mileage defined and how much will you have to pay per kilometre?
        • What are the associated fees you might have to pay for items such as insurance and administration?
What is a cooling-off period?

Motor Dealer Act Regulation provides for what is called a one clear day cooling-off period. During this period, the dealer is expected to keep the vehicle in their possession. After you enter into a lease agreement, you may cancel the lease without penalty within the cooling-off period without penalty.  It is not a 24 hour period and it is not just one business day.  Consumers can waive this requirement in writing so you can take the vehicle home immediately. However, the dealer must make sure you understand that you are waiving this right.  Simply taking the vehicle home does not waive your right to the cooling-off period.

What is one clear day?

One clear day is a term defined in BC law.  For example, if you sign a lease on Tuesday and change your mind, you must notify the dealer of your decision to cancel by the end of the day on Wednesday.  While you have the whole day to cancel, it’s better to notify the company during business hours so the dealer can provide written confirmation that your contract has been cancelled. If you choose to cancel after business hours, make sure you have proof that notice was given before midnight.

There are days that do not count in the cooling-off period. All statutory holidays, Sundays and whenever the dealership is closed do not count. Therefore, if you sign a lease on a Saturday and Monday is a legal holiday, Tuesday will be the clear day when you may cancel the contract, even if the dealer is open on Sunday.

What happens at the end of a lease?

Lease end buy-out options should be discussed before signing the lease agreement. At the end of the lease, you will likely have no equity in the vehicle, but you may have an option to purchase.  On some leasing agreements, the vehicle is returned to the dealer at the end of the lease period and there are no further obligations, except for extra mileage or damage. However, other lease agreements ask you to guarantee the dealer a residual value. The amount owed at the end of a lease which is an estimate of the fair market value of the vehicle/property at the end of the term.  for the vehicle at the end of the lease period.  Residual value is the amount the vehicle is expected to be worth at the end of the lease period and is specified in the agreement. At times you may be able to buy the car for the residual value. Other times, if it’s returned to the dealer and sold for less than the residual value, you may be required to pay the dealer the difference between the selling price and the residual value of the vehicle.

Lease end inspections

Under B.C. law, all motor dealers are required to ensure that the lease vehicle meets the safety requirements of the Motor Vehicle Act before it is sold. To ensure this, it’s best to have the vehicle inspected prior to a sale – even if it is to you. Your lease agreement will specify who is responsible for the cost of inspecting the vehicle. It may be up to you to pay this amount, but only if you agreed to this in your lease agreement.

Transaction Tips

Transaction tips

Getting started at the dealership

Depending on the size and practices of the dealership, you may work with one or more people. A salesperson will show you vehicles and answer your questions about features and options. This focus on the vehicles that meet your needs and your budget is known as qualifying a customer. If you’re buying used, this is the time to ask for the vehicle history reports and the mechanical inspections for the vehicles that interest you.

Negotiating

While negotiating the price and terms for the specific vehicle you selected, remember that everything in a vehicle transaction is negotiable, with the exception of taxes.  Dealer fees should be discussed as part of the price, if they were not already clear from the advertising. Some dealers will use a Worksheet or an Offer to Purchase to discuss terms and prices.  The purchase offer should include all the items that are part of the total transaction, not just the price you’re willing to pay. If you are asked to make a deposit, be sure the terms of the deposit are noted in writing.  You should agree to the final price and terms before going forward or taking the vehicle home.

Documentation

Often done in the Business Office, the purchase or sale agreement, tax and transfer forms will be completed.  You may be offered products such as warranties, protection packages and insurance products, like security etching.  You must approve these purchases to be charged for them.  The motor dealer must give you a copy of the sale or purchase agreement at the time the agreement is accepted.  Be sure to keep a copy of the agreement in your records.

The purchase or sale agreement

Review every section of this document, including the back, and have the dealership representative fill in all areas or put a line through them.  Don’t take the signing of this document lightly.  Have terms you do not understand explained to you.  Once it’s signed, the dealer can accept it, binding you to buying the vehicle. Unlike a lease, there is no return or cooling-off period for the purchase or financing of a vehicle.  A written sales agreement for a new vehicle must include:

        • the name and address of the seller and the purchaser
        • the date of the sale
        • the make, body type, model year, and VIN of the vehicle
        • details and price of equipment or accessories added to, or removed from, the vehicle
        • the actual selling price of the vehicle and taxes payable
        • the down payment or deposit, including any trade-in value, and the terms and conditions about the refund of the deposit
        • the balance to be paid by the purchaser
        • an itemized list of any other charges the purchaser is responsible for, including insurance and licence fees, if they are to be added to the contract price

Other items that must be included for a used vehicle:

        • any documentation fee or transfer fee
        • the actual odometer reading at the time of sale
        • the name of any province, state or country outside of BC in which the motor vehicle was registered
        • an itemized list of any repairs that were agreed upon as part of the sale and the additional cost, if any
        • a statement that the motor vehicle complies with the requirements of the Motor Vehicle Act
        • Or, if the vehicle is not roadworthy, a statement declaring the vehicle Not Suitable for Transportation.
        • Getting copies of all documents
Other documents you should get

ICBC Transfer and Tax Form (APV9T)
ICBC Insurance forms

Financing Agreement  or Lease Agreement
Warranty documents
Vehicle History Report and Lien check
Mechanical Inspection Report

Problems After You Buy

How to resolve problems after you buy

Resolving a dispute when the dealer is licensed
Resolving a dispute when the dealer is out of business
Lemon vehicles and resolving a new vehicle warranty issue

A new vehicle may be considered a lemon when it has a number of severe mechanical issues.  There are no lemon laws in Canada, but some provinces require disclosure of any lemon branding from another jurisdiction.  There are lemon laws in all 50 U.S. states that force manufacturers to buy-back and brand faulty vehicles as lemons.  For used vehicles, the best protection is to get a vehicle history report before any purchase.

The Canadian Motor Vehicle Arbitration Plan or CAMVAP is available to resolve disputes with most automobile manufacturers.  This applies to vehicles that are no more than four years old.  CAMVAP will settle disputes over interpretation, application or administration of vehicle warranties and defects in workmanship or materials on a vehicle supplied by the manufacturer to an authorized dealer.  If a CAMVAP arbitrator rules in favor of the consumer, compensation may be in the form of repairs, money, replacement of the vehicle, or buy-back by the manufacturer. No fee is charged for the program.

Curbers & Private Sales

Curbers, private sales and more

Curbers (unlicensed dealers) and private sales

Private sales account for a significant percentage of the used vehicle transactions in BC. A private seller may offer a lower price than a dealer and have first-hand proof of its accident and repair history, if they are selling you their own car.  But, many vehicles are offered for sale by curbers, unlicensed dealers posing as private sellers.  They may be selling stolen, rebuilt or flood damaged vehicles without disclosure.  Your options are very limited if things go wrong and you’ve bought privately.  You’ll have to go to Court to seek compensation.  See How to Spot a Curber or watch our video series to learn more before buying from a private seller.  See the VSA and Curbers Fact Sheet 287 kB .

Tips for buying privately
        • Know who you’re buying from: Ask the seller for ID to confirm they’re using their real name and if it matches the vehicle registration.
        • Get the history of the vehicle.  A vehicle’s title status can be searched for free on icbc.com.  After taking this step, get a vehicle history report from ICBC or
        • Check for unpaid liens
        • Check the vehicle: Confirm that the Vehicle Identification Number (VIN) on the dashboard matches the registration form. Check for signs of tampering with the VIN, like loose or mismatched rivets, scratched numbers, tape, glue or paint. Check that the mileage is consistent with the age and condition of the vehicle (25,000 km a year is average). Take the vehicle for a test drive on local roads and the highway.
        • Get an inspection: An inspection by a qualified mechanic could keep you from making a mistake.
        • File the paperwork before you pay: Ask the seller to go with you to the Autoplan office to complete the vehicle’s transfer of ownership.
        • Follow your instincts: If anything causes you concern, walk away.  If the deal the seller is offering seems too good to be true, it probably is. Find out why before you buy.
Checking for liens

Motor dealers are required to sell vehicles free of liens but a lien check is recommended when buying privately.  With a garage lien for prior unpaid repairs, or a former owner’s unpaid loan, the vehicle can be repossessed from a new owner.  If there is a record that you searched for liens in BC and none was registered when you took ownership, a BC lien holder will not be able to take your vehicle away.  There is a slight possibility a lien could be registered between the time you do a search and when your deal is finalized.  To guard against this, make your purchase subject to a condition that the vehicle is free from liens at the specified time of the sale.  If there is a lien on the vehicle registered in another province, it still could be seized.

A comprehensive vehicle history report, like CarProof Verifed, offers a Canada-wide lien search.  Liens registered in BC can be checked at the Personal Property Registry, through BC Online, or at select Service BC office locations using the VIN. There is a small fee.  Banks, credit unions and finance companies often provide this service for a slightly higher fee.

What is a consignment sale?
Fuel Consumption Ratings Versus Actual Fuel Consumption

The Fuel Consumption Guide offers a comparison of vehicle fuel consumption ratings using the Federal Test Procedure.  It does not predict what the actual fuel consumption of a particular vehicle will be. Actual fuel consumption depends on many variables, such as driving habits, the terrain, the weather conditions, and how much the vehicle is loaded.

Importing a Vehicle

Some vehicles need to be modified to meet Canadian standards.  Before purchasing a vehicle to bring into Canada, you should contact the Registrar of Imported Vehicles for more information.  Vehicles imported from outside of Canada are required to have both a federal vehicle inspection and a provincial private vehicle inspection or PVI.  Vehicles brought into BC from other provinces are required to have only the provincial private vehicle inspection.