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 deposit may be for:
The deposit terms and conditions must be clear, so a dealer must provide the following in writing:
See a sample deposit agreement.
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.
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.
A written sales agreement for a used vehicle must include:
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:
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.
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.
CARFAX Canada: Provides vehicle histories including, when known:
CARFAX Canada also provides open recalls and buying tips at carfax.ca
ICBC Reports: ICBC Vehicle Claims History Report – Recommended for BC Only Vehicles
Get the following, if it’s available in ICBC records:
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
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.
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:
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.
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 .
Both financing and leasing require the clear disclosure of the terms and conditions. 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.
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.
If you can answer these questions you probably understand your lease agreement:
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.
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.
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.
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.
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.
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.
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.
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:
Other items that must be included for a used vehicle:
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.
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 Consumer Protection Facts- Curber facts.
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 CARFAX Canada 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.
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.
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.