If you’re considering a secondhand vehicle, don’t rush into the sale. Follow the steps in this guide to check if the used car is a lemon, avoid major red flags, and reduce the chances of hefty repair bills in the long run.
What is a lemon car?
A “lemon car” is a car with a manufacturer’s defect that impacts the car’s safety, value, or function. A car usually gets labelled as a lemon when the manufacturer or a dealership has been unable to repair the vehicle after it has been in the repair shop an unreasonable number of times.
How to check if a used car is a lemon (checklist)
Several telltale signs could indicate you have a defective vehicle on your hands. Use this list to check if a used car is a lemon before you commit to the sale.
Beware of a sale price that’s too good to be true
If the sale price of the car you’re about to buy is substantially lower than what others are asking for the same make/model, it may be because the current owner is having a hard time getting rid of a lemon.
Use tools like the Kelley Blue Book or Carfax Canada’s Value Range Estimator to benchmark the car’s sale price against the car’s estimated value. Then, check what other people are selling the same car for online.
Check if the model has a reputation for being a lemon
When it comes to producing lemon cars, some manufacturers are better than others. Do some research and check that the model you’re looking at buying doesn’t have a bad reputation online.
Check for recalls, read online forums and consumer reports, and seek out honest reviews. You could also call the service department at the manufacturer’s local dealership and ask if there are any known issues with the car.
If the car has a reputation for being a lemon, you might want to scratch it off your list.
Get a vehicle history report
If everything checks out so far, the next step is to grab a copy of the car’s vehicle history report.
A vehicle history report can help you spot many of the red flags associated with lemon cars because they show you a vehicle’s:
- Year, make, and model
- Engine & drivetrain
- Assembly information
- Title status
- Major accidents & claims
- Service history
- Recall campaigns
- Odometer discrepancies
- Ownership changes and import records
For reference, here’s what a sample vehicle history report looks like.
Provided you have the car’s Vehicle Identification Number (VIN), you can buy a vehicle history report from CARFAX for a fee. You can also try asking the seller if they’ll give you the vehicle history report.
Dealerships will usually have a vehicle inspection report on hand, as provincial law obligates them to let potential buyers know if there are any known mechanical issues with a vehicle. (For example, Ontario’s Vehicle Sales Regulator includes mandatory disclosures in the Motor Vehicle Dealers Act that dealers must disclose to buyers.)
Private sellers aren’t obligated to disclose the same information. And they may not have a vehicle inspection report available due to the additional cost.
Long story short: if a seller (dealership or private) isn’t willing to hand a vehicle history report over, or they try to steer you away from sourcing one yourself, that may be a red flag.
Review the owner history
Once you have access to the car’s vehicle history report, take a good look at the owner history section. If the car was bought back by the manufacturer, that’s often a sign that the car was faulty.
Review the car’s service history
The service history section of a vehicle history report will give you the car’s available service records, including details like:
- Odometer readings taken at the time of each service
- Service intervals
- Oil and filter changes
- Alignment checks
- Electrical filter checks
Red flags in this section of the vehicle history report could include:
- Recurring repairs
- Repairs that happened when the car was new, which weren’t caused by a collision or modification
- Serious issues that go beyond superficial wear and tear (e.g., problems with the powertrain or suspension)
Inspect and test drive the car
The next step is to thoroughly inspect the car and take it for a test drive with a friend. Download our free self-inspection checklist to help with this part of the process.
During the inspection and test drive, you’ll want to keep an eye out for common lemon car red flags like:
- Interior: Smell, visible damage, and extreme wear and tear can be telltale signs that the vehicle has very high mileage. If this isn’t reflected on the odometer, it may suggest odometer tampering.
- Exterior: Misaligned body parts could indicate that the vehicle has been in a major accident in the past.
Beyond that, there’s still a lot to cover during a self-inspection. Cover all 76 points on our used car self-inspection checklist and avoid buyer’s remorse in the future.
Pay for a pre-purchase inspection
Even though a detailed pre-purchase inspection (PPI) can cost around $100-$200, it can save you from buying a lemon and avoid being stuck with big repair bills in the long run.
If you’re buying a used car from a dealership, the dealer may have a mechanic or auto technician available to conduct a PPI onsite. If you’re buying from a private seller, you can book a mobile inspection or ask the seller to bring it to a mechanic of your choice.
When you take the car into the shop, give the mechanic the vehicle inspection report and pass along any concerns you had after inspecting the car yourself. This will help the mechanic inspect and confirm that any previous damage to the vehicle has been carefully and fully repaired.
A detailed pre-purchase inspection will check the car’s:
- Cosmetic condition
- Mechanical condition
- Safety condition
- Broken or rusted components
- Leaks
- Steering, braking, strange noises
Be aware that damage found during an inspection isn’t always a red flag. If the damage was disclosed prior to the inspection, and the PPI confirms that it has been repaired and the car is safe to drive, you should be good to go. On the other hand, if the seller told you that the car had no damage history and did not back it up with a vehicle history report, then you’ve probably stumbled upon a huge red flag.
What to do if you bought a lemon car
Unlike the United States, where every state and the District of Columbia has its own lemon law, there are no federal lemon laws in Canada.
Thankfully, there are some measures in place that can be helpful if you end up buying a defective used vehicle.
Repair through the manufacturer’s warranty
If your used vehicle is still covered by the manufacturer’s warranty, seeking repairs from the manufacturer should be your first port of call.
Read more: Tips on Getting Your Car Warranty Approved
Canadian Motor Vehicle Arbitration Plan (CAMVAP)
The Canadian Motor Vehicle Arbitration Plan (CAMVAP) is the closest thing Canada has to America’s lemon laws. CAMVAP helps consumers and manufacturers resolve disputes about vehicle assembly, material defects, and how the new vehicle warranty is applied through binding arbitration.
If your used vehicle is still covered by the manufacturer’s warranty, and you haven’t had any success repairing its defects with the dealership, you may be able to seek arbitration and compensation through CAMVAP. Just note that some manufacturers like BMW and Mini do not participate in CAMVAP.
Repair through an extended auto warranty
Extended car warranties kick in once the manufacturer’s warranty expires. These warranties can help to cover the cost and inconvenience of mechanical and electrical failures that occur once a manufacturer’s warranty expires.
It’s important to note that extended warranties are optional, so you’ll need to have purchased one before your car breaks down to take advantage of the coverage.
Read more: Is an extended car warranty worth it?
Small Claims Court
If you can’t resolve your complaint via other means, you also have the option to fix the vehicle at your own expense and recover the cost of repairs or rescind the contract in Small Claims Court.
Make sure you obtain legal advice before pursuing this option. If you and the dealer do not agree on facts related to the condition of the vehicle, it’s also recommended that you bring an independent mechanic with you to the hearing.
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