Tips for buying a used car : Tip 1/2 — Background Research
by Brent Gudelot, Co-Founder of Curbie
When buying a used vehicle, whether privately or from a dealer, it’s important to examine the vehicle’s quality. At Curbie, we do this for every vehicle we sell. Our process begins with background research and ends with a thorough 240-point inspection. It’s mission critical that we get it right or we risk disappointing a customer.
In this blog series, I provide tips you can use to better vet vehicles you’re considering. Today’s installment covers background research.
At Curbie, we start our investigative process with background research because it’s quick and efficient. Finding red flags at this stage saves us the hassle and cost of more time-intensive and expensive physical vehicle inspections.
SGI VIN Search
The best place to begin is a free SGI VIN (vehicle identification number) search. Among other things, this report will tell you whether PST (provincial sales tax) is owed on the vehicle, and provide a damage claims history. Both of these items are important because they materially impact the value of a used vehicle.
In Saskatchewan, PST has to be paid on all vehicles sold in the province ‘once’. This rule is straight-forward for new vehicles: PST is charged at the time of original sale only, and it is not charged when the vehicle is re-sold. It’s also straight-forward for all vehicles purchased from out-of-province: as PST has not been paid on these vehicles in the past, it is charged.
Leased vehicles, on the other hand, are a little more complicated. Leases only cover a portion of the vehicle’s value — the projected depreciation during the term of the lease — and PST is only applied to this portion of vehicle value. Therefore, when buying a vehicle off lease, PST is owed on the purchase price.
Damage Claims History
While Curbie doesn’t rely exclusively on the damage claim history provided by the SGI VIN Search, we find it useful in identifying immediate red flags. The report will tell you about the timing and amount of claims, and specify if the damage was due to a collision. As an initial step in researching a vehicle, this is time well spent.
The next resource to consult is the CarProof report. CarProof provides registration, accident, claim and ownership history for every vehicle in Canada. Most car dealers provide the report freely. However, you must often pay for it when shopping from sites like Kijiji.
When reading the report, look for the following:
- Does the vehicle have a salvage title? This indicates the repair cost was more than the vehicle’s overall value. These vehicles are generally used for parts to repair other vehicles. People will sometimes purchase salvage cars and repair them, but generally these cars have been in major accidents and should be avoided.
- Are there previous accident claims? If so, the accident claim should be investigated. Claims of more than three thousand dollars should be regarded as fairly major. At this level, it can also be difficult to determine if the repair was sufficient.
- Has the vehicle been stolen? Stolen vehicles are likely to have been driven rough and abused. If considering a vehicle of this type, be sure to perform a more in-depth inspection to check for any signs of damage or shoddy repair. I will cover this off in a future post.
- Imported vehicles. Generally, it’s easier to track a vehicle’s history if it’s located in Canada. However, if considering a vehicle from the US, a CarFax history report can be used — this is the US equivalent of CarProof. If looking further than the US, be prepared to take more time with independent research to gather the information you require.
- Check the vehicle history. Does the vehicle have any service history? When buying privately the buyer should confirm the owner knows the vehicle’s history and has a good reason for selling. When purchasing through an auto dealer or other non-private car seller, such as Curbie, the purchaser should ensure the vehicle has been properly inspected and comes with a warranty.
- Internet Search. Finally, do an Internet search for common problems or issues to look out for on the model and year of the vehicle you are interested in.
I look forward to publishing a lot more car-buying tips. There are many things to consider when buying a used vehicle, and we’ve made a science of it here at Curbie.
Please leave a comment to let me know if you found this post useful. Also, tell me what other areas of car buying you’re interested in learning about.
It’s my pleasure to help.