Should you buy a car from a dealer or a private individual?

Buying a car in Calgary is a choice between savings and safety. Let's take a look at the pros and cons of both options, considering prices, warranties, taxes, and legal aspects.

1. Price comparison

Private sellers

  • 10–20% savings: For example, a 2014 Scion tc can be found for $11,000 CAD, while similar models are more expensive at dealerships.
  • Negotiation: Prices are often inflated, so you can negotiate a discount.

Dealerships

  • Higher cost: Includes car preparation costs (washing, inspection) and warranties.
  • Promotions: Trade-ins, installment plans, insurance discounts.

2. Reliability and condition check

Private sellers

  • Risks: Concealment of accidents, engine problems, debt.
  • Mandatory steps:
  • Carfax report ($40–50 CAD): Check for accidents and number of owners.
  • Mechanic inspection ($100–200 CAD): Diagnosis of the chassis and transmission.
    • Debt check: Through PPSA REGISTRY (risk of car confiscation for debt).

Dealerships

  • Certified Pre-Owned (CPO):
  • 141–201 inspection points.
  • 12–24 month warranty.
  • Transparency: Alberta law requires dealers to disclose:
  • Accident history.
  • Use of the car as a taxi/rental.
  • Fire or flood damage.

3. Paperwork and taxes

Private sellers

  • Independent registration:
  • VIN check at the registration center.
  • Pay GST (5%).
  • Register the car through a Registry Agent.
  • Taxes: Only GST. For example, for a car worth $10,000 CAD, the tax is $500.

Dealerships

  • Full support: The dealer handles the contract, registration, and license plates.
  • Taxes: 5% GST. Additional fees (administrative, delivery) are included in the price.

4. Warranties and insurance

Private sellers

  • “As is”: No claims can be made after signing the contract.
  • Insurance: Possible problems with insurance companies for cars over 12 years old.

Dealerships

  • Warranties: Include engine, transmission, and electronics repairs (e.g., 3 months/5,000 km at Stampede Auto).
  • Insurance benefits: Discounts through dealer partners (e.g., Hyatt INFINITI).

5. Transaction security

Private sellers

  • Risk of fraud: Fake documents, stolen cars.
  • Face-to-face meeting: Check the seller's ID and car documents.

Dealerships

  • AMVIC protection: Licensed dealers are liable for fraud.
  • Refunds: If hidden defects are found, you can file a complaint.

Conclusion: Who to choose?

  • Private seller:
  • For whom: Experienced drivers who are willing to take a risk to save money.
  • Advantages: Price is 10–20% lower, possibility to negotiate.
  • Disadvantages: No guarantees, time needed for inspection, risk of fraud.
  • Dealer:
  • Who it's for: Newbies, people who value time and safety.
  • Pros: Warranty, legal clarity, support.
  • Cons: Higher price.

Recommendation: For your first car in Canada, choose certified cars from dealers (e.g., Stampede Auto, Sunridge Auto). If you have a limited budget, buy from private sellers, but be sure to have the car checked by a mechanic and Carfax.