Dude, Where’s My (Used) Car?
by Meghan Recker

If you want to buy or sell a used car in Nova Scotia, you want to feel safe and confident in your purchase or sale. What should you be looking for in a car? How are you protected by law? What happens if something goes wrong? As you might guess, there’s no one simple answer to these questions. A lot depends on the context, but here are some basic things to keep in mind when buying or selling a vehicle in Nova Scotia.

Before You Buy

  • Take it for a test drive
  • Have a third party inspect the vehicle
  • Get the history of the car
  • Do a lien check
  • Take your time and be informed.

Find out as much as you can about the car you want to purchase. This will help to reduce the likelihood of unforeseen problems down the road. What does a typical car that make, model, and year go for? Have there been any recalls and why? What are some complaints people with that car have? What do people like about it? After answering these questions for yourself, it’s time to dive into the specifics of the car you’re thinking about buying.

Ask lots of questions about the vehicle, get a history of the vehicle, do a lien check using the vehicle's Vehicle Identification Number (VIN), and take it for a test drive.  You can also do a free check to see if the vehicle has been stolen by searching the VIN on the Canadian Police Information Centre database. Ask if the odometer is not accurate or has been replaced or altered.  And, it is best to have a trusted third party mechanic inspect the car before the deal is done, and to make that a condition of the purchase.   It is a big red flag if the seller says no!

Get a history of the car.  There are reliable companies that offer vehicle history reports.  Ask about repairs and service history for the car, and ask for a copy of repair receipts. and any other relevant information to you.  Confirm that any recall repairs have been completed.  Test drive before purchasing. Buying a car, used or new, is a big decision, and testing it out before you buy can help you feel comfortable in that decision. Alternatively, it might bring to light some problems or quirks with the car that you hadn’t noticed before. The worst feeling is making a huge purchase and finding out about problems after money has already changed hands.

Legal Protection and Warranties

  • Buyer Beware!
  • The Consumer Protection Act does not apply to private sales
  • Look into contract law and cases to protect yourself
    • “What if my new (to me) used car breaks down?”
  • Standards the courts have used to determine whether it’s reasonable for a car of a certain age/mileage and/or general condition to break down.

The first important thing to realize when thinking about legal protections for used car sales is that the Consumer Protection Act does not apply to private sales between individuals (though it would apply if you were to go through a business/dealership that sells used cars). Rather, private sales are governed by contract law, which is largely law that comes from cases that go through the courts, also called "case law" or "common law". You'll find introductory information about contracts here (what is a contract, what happens if someone breaks it, misrepresentations, and more!).

Nova Scotia Common Law
Most potential problems that you could run into when buying or selling a car have already been settled in the courts, and have become common law.  This means court decisions outline some standards for buying and selling used vehicles for private individuals, and these standards are good to keep  in mind when completing a private transaction.

For example, in a recent (2021) Small Claims Court of Nova Scotia case, a used car buyer claimed that the seller owed them money for all the repairs that needed to be made shortly after purchasing the vehicle. The seller acknowledged some problems with the car during the test drive, taking money off the original price because of these issues. They were not aware of the other problems the vehicle apparently had.  They'd the vehicle inspected a couple of years prior. They did offer the buyer the opportunity to have the vehicle inspected before making the purchase, but the buyer refused to do so. The Court decided in favour of the defendant, because they had done everything they were obligated to do to inform the claimant of the condition of the car. Additionally, there was no reason to believe that the seller was trying to deceive the buyer, since they had discounted the initial price and also offered to have the vehicle inspected again before the purchase.

There are two main points to take away from this case. First, as a buyer, use everything at your disposal to make sure the car is what you want and that the condition is good enough for you before you purchase. If something goes wrong and you didn’t do everything in your power beforehand to vet the vehicle, there may not be a way to get compensation after the fact. As the person who would potentially be a claimant in a Small Claims Court, there is a heavy burden on you to prove that you did everything you could to find out the condition of the car. “Buyer beware” is a principle to live by when buying from a private party. Second, as a seller, protect yourself by being transparent and honest about the condition of the car. Do not make any promises as to the future condition of the vehicle.  Offer historical reports and third party vehicle inspections. That way, if something does go wrong after you sell it, you may be less likely to be responsible for those costs. If you promise the buyer that everything is in good condition and that the vehicle should last for at least 5 years, for example, and the car breaks down before then, you may be on the hook for that promise.

If you buy a used car from someone, and it soon after breaks down, what do you do? What can you do? You can do a few things. You may start out by reaching out to the seller, explaining the situation, and ask to work together to figure something out. You could send what's called a demand letter, either written by yourself or a lawyer, and wait to hear back. This is simply a letter stating what you would agree to, and asking the other person to help settle the situation with you. It may be helpful to give a deadline to hear back from the seller. If they don’t respond or you don’t like their response and you still wish to try to get compensation, then you may be able to file a claim with a Small Claims Court (as long as the claim is $25,000 or less). You may choose to hire a lawyer to help you negotiate,  give you an opinion about your chances in court, and represent you in court if it comes to that, but it isn’t mandatory to hire a lawyer. If you get to the point of a possible Small Claims Court case, there is precedent (common law) the adjudicators in Small Claims Court will usually follow, if the situation is similar enough. To start, you will have no course of action if you: were simply unhappy with the price, should have noticed the problem beforehand (remember, 'buyer beware!'), were told about the problem directly, or caused the problem yourself.

Nova Scotia precedent in Small Claims Court generally shows that, depending on the quality, age, and previous use of the vehicle, you may not be entitled to much compensation, if any at all. This is because used vehicles, unless under explicit warranty, cannot be expected to work as well or for as long as a new vehicle. Furthermore, while an inspection is a very good thing to have before purchasing a used car, it is no guarantee of future functionality of the vehicle. The Court has said that those who purchase used cars–especially ones that are older or have a lot of mileage on them–should expect defects to crop up. This is why contract law generally dictates the sale of used vehicles between private parties (as opposed to used car dealerships). There are so many things that could go wrong with a used car, it is easiest to put the responsibility of a fair sale in the hands of the two parties involved. So, just as much as it is the seller’s responsibility to be honest about the condition of the car, it is equally–if not more–the buyer’s responsibility to become knowledgeable about the car, its condition, and its history before purchasing. If you as a buyer are satisfied with what you know at the time of sale, then it is not likely the courts will find in your favour should some random defect occur, because they have said in previous cases that defects are something you should expect to find in a used car as time goes on.

Misrepresentations

That being said, sometimes the seller may be on the hook for not being honest about the condition or state of the car. Although the heavier burden of due diligence is on the buyer, the seller must not give false or misleading information about the state of the car or vehicle they’re trying to sell. For example, if a person selling their car told you the car’s mileage was only 25,000 km, but really it was 300,000 km, that would be considered a misrepresentation (covered in the earlier link to information on contracts). Although everyone is allowed to replace their odometers, it must still accurately reflect the mileage of the car after installation. Depending on what kind of misrepresentation the situation is considered, you may be able to get out of your contract or even get some kind of compensation (damages) in the courts if you are able to prove the misrepresentation happened. When two people agree to a contract–in this case, a sale of a vehicle–they both assent or agree to the same terms. However, if the car has a higher mileage than the seller indicated, then the buyer cannot be bound by that contract. The buyer agreed to a car that had 25,000 km on it, not a car that had 300,000 km. It’s all a matter of making sure both parties to a contract agree to the same terms; otherwise, you don’t have a contract.

Want to Sell Your Car?

  • Keep in mind everything that the buyer must beware of
  • Do not make promises about the warranty or general future functionality of the car
    • Because selling used cars has to do with contract law, the things you promise can be held against you if they do not hold up

If you want to sell your own vehicle, it is good to keep in mind everything above that buyers must look out for. The bottom line is that the best way to protect yourself as a seller is to be as transparent as possible about the condition of your vehicle. Even though buyers are expected to assume that they will eventually run into problems with a used vehicle, it is generally good to make the buyer aware of any trouble you’ve had with your vehicle. Offering them the opportunity to get the vehicle inspected by a third party may help show that you are transparent about the condition of your car should any issues come to light, as shown in the 2021 case referenced earlier.

Transparency is good, but making promises is not. All you can do is show the vehicle in its current condition and show documentation of its past. You cannot predict the future, and it is very risky to promise anything along the lines of “It will run for at least another 6 months” or “The engine will be good for another year at least.” Because private sales of vehicles are contracts, promises you make about the vehicle might be considered a breach of contract if they do not hold up.

Document Everything

As a final point, whether you are buying a used car, or selling one, it is a very good idea to document and have copies of certificates, inspections, other documents, and even written exchanges. Just in case something goes wrong, you don’t want the situation to become their word against yours. Having documentation can be a great way to protect yourself, and it helps ensure transparency and safer transactions.

Happy contracting!

For more information:

This article was written by LISNS 2022 summer Dal Schulich School of law student intern, Meghan Recker.