At the height of the real estate craze, when higher bids were almost systematic, many buyers gave up having the coveted property inspected. It was risky. The same observation applies when buying a used vehicle, especially as the number of tampered odometers jumps.
With delivery times for new vehicles continuing to be counted in months when not years, the second-hand market remains vigorous.
Prices are falling a little, it is true, but they remain high. Last October, the average was $34,159 for vehicles listed on AutoTrader.net, an increase of about $10,000 (40%) in 18 months.
Interest rates have also jumped. We should now expect to pay around 8% in the best case, with an excellent credit rating and five-year financing.
These are two good reasons to select your new vehicle more carefully than ever. Here is a third: tampered odometers. CARFAX, an American company that collects vehicle data, revealed last month that the number of cars whose odometers have been tampered with has increased in the United States by 7%, in 2022. There is no reason for it to be different in Canada.
Moreover, according to the owner of L’Annuel de l’automobile, Benoit Charette, both in Quebec and elsewhere in the country, “businesses that remain discreet are rolling back odometers 7 days a week”. In a text published at the beginning of January, he added that these companies are located very close to commercial auctions of used vehicles or a few blocks from car dealerships.
CARFAX points out that digital odometers haven’t made fraud go away, as many people believe. Quite the contrary! The phenomenon is constantly increasing since it has never been so easy and inexpensive to erase thousands of kilometers of a car’s history at once. For US consumers, a tampered odometer equates to an average loss of value of US$4,000.
The best way to detect this type of fraud is to have the vehicle inspected before buying it to detect discrepancies between the mileage displayed and the wear of certain parts.
The CAA offers the service at about 20 specially trained garages, while the Automobile Protection Association (APA) can recommend an expert in the field. This service is also offered in Montreal and Quebec by a new company called PeachyCar, whose mission is to accompany buyers of used vehicles during a process that involves “a lot of irritants”, says its founder Guillaume Eckerl, known for the ClicSoumission.com and HelpMee.ca sites, purchased by Desjardins.
In fact, according to AutoHebdo.net, 50% of consumers find it difficult to obtain the history and assess the condition of the vehicle. A similar proportion are troubled by negotiating price and obtaining financing, while 48% find it difficult to determine if they are getting a good deal.
Although there is “a huge need” for independent pre-purchase inspections, very few people use them, says APA director George Iny.
It must be said that in this period when the demand for used cars is strong, requiring an inspection involves… a risk. Sellers suddenly claim that the coveted car has already found a buyer when the idea is raised. “There are even some who refuse that customers take a test drive”, denounces George Iny.
If inspection and testing are not welcomed, beware. You won’t necessarily make a bad buy, but you may have to pay fast for new brakes.
Whether for the odometer or the history of accidents, do not rely too much on CARFAX reports, warns the APA, because their reliability rate in Quebec (it varies by location) does not exceed 60%. A rigorous inspection including in particular the measurement of the thickness of the paint will be able to detect repairs. A well done repair is not necessarily a problem, but it should be reflected in the price.
PHOTO ALAIN ROBERGE, THE PRESS
Guillaume Eckerl, founder of PeachyCar
Even if there is a lot of information online, people fall into the same traps, they lack vigilance.
Guillaume Eckerl, founder of PeachyCar
PeachyCar also offers a secure payment service (via a notary) and a “complete” contract for sales between individuals. For the inspection by an expert who travels and writes a report with photos, count about $200. On the CAA side, you have to pay between $105 and $260. It’s not enough to have peace of mind.
It is always possible to do a large number of checks yourself. The CAA guide is as comprehensive as it is cunning.
The CAA also warns customers against auto salespeople who “attempt to shove financing down customers’ throats” because they receive a rebate. You always have the right to go to your bank. If you are a homeowner, the mortgage margin will undoubtedly allow you to obtain a much better rate.
As we have seen in real estate, especially in 2021, the ambient frenzy and the fear of missing out on a good deal can lead to more or less rational decisions. But the high prices, the high financing costs and the increasing scams call for the greatest vigilance.