Before you set out to buy a used car in Canada’s westernmost province, there are a few things you need to know, especially if you’re buying a luxury vehicle. British Columbia charges a luxury tax on higher-priced new and used vehicles, which makes the province’s used vehicle taxation framework unique in Canada. To help give you peace of mind, here’s a step-by-step walkthrough explaining how to go about buying a used car in B.C.
Buying a Used Car in British Columbia
Step 1: Research
Before you set out to scour vehicle listings for your next ride, you’ll find it’s a time-saver to give some thought up front to what exactly it is you’re looking for. Consider attributes such as whether you need two or three rows of seats, how much cargo space you use regularly, and whether features like all-wheel drive and Bluetooth connectivity matter to you. Making these decisions now will help you narrow down your list of potentials to a short list you can work from that might prevent you ending up back at square one later on. Learn more about how to decide on the best used vehicle for you in our guide to Buying a Used Car in Canada
Step 2: Shop
Once you’ve gone through these steps, you can confidently begin investigating vehicle listings that interest you.
The safest route is to buy from a dealer registered with the Vehicle Sales Authority of B.C., either directly or through online vehicle sales listing sites such as CarGurus, as these registered dealers are required to follow laws and regulations designed to protect their customers and can be challenged under provincial law if the vehicle is misrepresented. These dealers will also have staff on site to handle certain parts of the sales process for you as outlined below. Buying from a private seller is also an option in British Columbia, which may mean paying a lower price but involves more legwork and research.
Be on the lookout for curbers during your search. A curber is a seller who misrepresents themselves or the vehicles they’re offering for their own gain. They routinely scam customers with practices such as odometer tampering and reselling vehicles that have been stolen or can’t legally be registered due to accident or flood damage. If a deal seems too good to be true, it likely is, and you should be prepared to walk away from any deal that sets off alarm bells with your intuition.
Step 3: Investigate
If you’ve found a car that seems like a good prospect, follow these steps to ensure you’ve thoroughly investigated it before you commit to a purchase.
The provincial public insurer, the Insurance Corporation of British Columbia (ICBC), is responsible for tracking vehicle history and information. To learn whether a vehicle has previously been reported as damaged or stolen through the ICBC, as well as whether any restrictions may exist that could prevent it from being registered, a vehicle claims report can be ordered from the ICBC for $20.00. However, the ICBC report does not contain information on outstanding liens on the vehicle, which would become the new owner’s responsibility after ownership is transferred and could surprise an unprepared buyer with significant financial liability. A report from a private company is typically more expensive but will include this information. An excellent chart compiled by the ICBC showing the differences between the ICBC and Carfax reports can be found on the ICBC website.
It’s also a good idea to inquire with the seller about any additional information that may be available on the car’s ownership history, whether service records are available, the status of its warranty including any extended warranties that may have been purchased, and whether any required recall work has been completed.
More information on how to verify whether the vehicle is being listed at a fair price, how to check its estimated fuel consumption and safety ratings, what to look for during a test drive, and other steps to take before committing to a purchase can be found at the article on buying a used vehicle in Canada linked above.
Step 4: Purchase
If everything checks out and you decide to begin the process of purchasing the vehicle, most of the remaining steps involve filing documentation with the ICBC.
While a vehicle inspection is required to register a vehicle in British Columbia in certain instances such as when a vehicle is being imported into the province, an inspection is not required to transfer ownership on a vehicle already registered in B.C. However, a Private Vehicle Inspection will cover the basic safety requirements, and a detailed mechanical inspection will look for a more thorough list of potential issues. It’s a wise idea to secure one or the other before purchasing a used vehicle to ensure you’re not saddled with expensive repairs you’re not expecting.
The provincial AirCare program, which required emissions testing for passenger vehicles, was discontinued at the end of 2014.
To complete the transfer of ownership after the seller has been paid, the buyer and seller must jointly complete the ICBC’s Transfer/Tax Form. Typically, this form is only available by visiting an Autoplan broker in person, but during the COVID-19 pandemic it is temporarily available for download. The form requests information such as the vehicle’s ownership history, whether the purchase price was lower than market value, and whether the transfer is a gift. Both parties must complete the form together and take it, along with the seller’s original copy of the vehicle registration and legal identification, to an Autoplan broker within 10 days of the sale to complete the transfer.
When purchasing from a registered dealer, an Autoplan broker may work on site or close by and will complete the transfer of ownership, registration, and insurance for you on the premises. When buying from an individual, both parties will need to visit an Autoplan broker together to complete these steps.
Sales taxes are due to the ICBC’s Autoplan broker upon registration. In British Columbia, the used car taxation system is the most complex in Canada, particularly where luxury vehicles are concerned.
When you buy from a registered dealer, you need to pay the federal government’s GST at a rate of 5%. However, the amount of provincial tax you’ll be charged is lower, which results in a net tax rate that’s the same as you would pay by going through a private seller, as long as the fair market value of the vehicle is assessed by the ICBC as being less than $55,000. Below that price point, dealers charge 7% PST, but the rate climbs to 8% for vehicles priced from $55,000 to $55,999.99 and then to 9% for those priced between $56,000 to $56,999.99. Between $57,000 and $124,999.99, the rate jumps to 10%. Past that point, the province’s luxury tax rates kick in, and you’ll pay 15% on a car valued between $125,000 and $149,999.99. If you pass that $150,000 threshold, the rate goes up again to 20%.
If you go with a private seller or if you acquire the car as a gift under a circumstance that still requires you to pay tax, then everything up to the point of $124,999.99 is charged a total provincial tax rate of 12% on the ICBC’s value assessment. On vehicles priced above that range, the same luxury tax rates of 15 and 20% apply as above.