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Location: Ministry Home > Driver and Vehicles > Vehicle Licensing > Buying and Selling a Used Vehicle | |||||
Buying and Selling a Used Vehicle in Ontario |
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Over one million used vehicles change ownership in Ontario each year. To help consumers make better-informed decisions, the Ontario Government introduced the Used Vehicle Information Program. Co-ordinated by the ministries of Consumer and Business Services, Transportation and Finance, the program helps buyers and sellers of used vehicles understand their rights and responsibilities. What is a Used Vehicle Information Package?The package, which the seller must show to potential buyers and give it to the buyer of the vehicle, costs $20 and includes the following:
Note: To obtain a Used Vehicle Information Package, the plate number, or vehicle identification number, is are required. Order a Used Vehicle Information Package online at ServiceOntario Driver and Vehicle Online Services Selling a Used Vehicle Registered in OntarioUsed Vehicle Information PackageIf you're selling a used vehicle privately in Ontario, you must buy a Used Vehicle Information Package (UVIP). Make it available to all prospective buyers and give it to the buyer at the time of sale. This applies to the private sale of any car, van, light truck (gross weight of 3,000 kilograms or less), self-propelled motor home or motorcycle. The cost of the UVIP is $20. The following vehicles are exempt from the UVIP requirement:
To purchase a Used Vehicle Information Package:
Effective January 1, 2005, all personal cheques must be certified unless payment is sent by mail. The package includes important information about a vehicle's Ontario registration, lien record and odometer reading, as well as information regarding retail sales tax. Be sure you read all the information included in the package and show it to anyone interested in buying your vehicle. Once you've found a buyer, use the bill of sale portion of the UVIP to record your name and signature, as well as the date and purchase price. It's the buyer's responsibility to take the package to a Driver and Vehicle Licence Issuing Office to register as the new owner within six days of the sale and to pay retail sales tax on the vehicle. Registration PermitIn addition to the UVIP, you must also complete and sign the Application for Transfer located on the reverse side of the "vehicle portion" of the registration permit and give it to the buyer. Keep the "plate portion" for your own use. You'll need it if you decide to register your licence plates on another vehicle. Licence PlatesOntario has a plate-to-owner registration system. This means that the licence plates for your vehicle stay with you, not the vehicle. When you sell or change vehicles, remove your plates and keep them for your next vehicle. Before attaching your plates to another vehicle, be sure to visit a Driver and Vehicle Licence Issuing Office to advise staff of any such changes. If you don't intend to get another vehicle you can hand them in at any Driver and Vehicle Licence Issuing Office for cancellation. If your plates have not expired, you may apply for a refund for any full unexpired months of plate validation. An administration fee of $5.00 is charged to process each refund. A Seller's Checklist:
Buying a Used VehicleWhat to Look ForGood used vehicles are in demand. With careful shopping, some research and a little common sense, you should be able to find a vehicle that will fit your needs. To begin, always inspect a vehicle in the daylight. Kicking the tires isn't enough. Check carefully for excessive wear of the interior upholstery, the seats, even the brake and accelerator pedals. New pedals may indicate a lot of use. Look closely at the exterior. Ripples on the body of a vehicle suggest that body work has been done and that the vehicle could have been in an accident. Take the vehicle for a road test that allows driving at different speeds on different road conditions. This will help evaluate the performance of the steering, brakes, shock absorbers and front-end alignment. Don't let yourself be blinded by the reputation of a particular make or model. Even a well-made vehicle can deteriorate if it's not maintained properly. Ask about the vehicle's accident history and request a written statement that summarizes accident information. Take the vehicle to your mechanic or to a diagnostic centre for a check-up before finalizing the purchase. Signs of Trouble
Check the OdometerAn average vehicle accumulates 16,000 to 20,000 kilometres per year. You should be cautious if the vehicle shows particularly low kilometres for its age, or if the signs of wear are not consistent with the vehicle's odometer reading. If you believe the odometer has been tampered with, report it to the police. Odometer tampering is a criminal offence. Ask for the Used Vehicle Information PackageBefore you make a decision to buy the vehicle ask to see the seller's UVIP. Read it carefully to see if there are any outstanding liens registered against the vehicle, if there is anything in the vehicle's registration history that might cause concern and if the name of the person selling the vehicle is the same as the name on the registration. The UVIP also shows the vehicle's odometer reading that was last provided to the Ministry. When the transaction has been completed, it's the buyer's responsibility to take the UVIP to a Driver and Vehicle Licence Issuing Office to register as the new owner within six days of the sale. At that time, the buyer must pay retail sales tax on the vehicle. The amount of retail sales tax to be paid is based on the purchase price or the wholesale value calculated at the time of transfer, whichever is more. Wholesale ValueThe wholesale value is based on the Canadian Red Book, which lists the wholesale and retail values of used vehicles. These values will be printed on the UVIP. Values may change from the date the package is issued to the date of transfer. The wholesale and retail values are based on average amounts paid for vehicles of the same year, make and model. They do not take into account optional equipment, vehicle condition or the number of kilometres driven. The Canadian Red Book is an accepted industry standard used by car dealers, insurance companies and other provincial governments. Red Book values may not apply to some vehicles. In these cases, retail sales tax will be based on the purchase price only. A Buyer's Checklist:
See also: Consumer Tips - How to Avoid Unknowingly Buying a Flood Damaged Vehicle Other Vehicle TransfersThere are many vehicle transfer situations e.g. spousal transfers, etc., other than regular transfers, which require other transfer documents. If you have one of these transfer situations, please complete our online feedback form, or contact the Driver and Vehicle Licensing Call Centre at 416-235-2999 or toll free at 1-800-387-3445. Safety Standards CertificateA Safety Standards Certificate (S.S.C.) is required to register a used motor vehicle as fit. It certifies the roadworthiness of the vehicle at the time of inspection. It can be obtained at any licensed Motor Vehicle Inspection Station in Ontario for a fee. It is valid for 36 days from the date of the inspection and must be signed by an authorized mechanic. You will be asked to produce an S.S.C. when:
See also FAQ: Safety Standards Certificate Some frequently asked questions about vehicle transferHow long do I have to transfer vehicle permit?The buyer has six days from the date of purchase to register as the new owner. Where do I go?Driver and Vehicle Licence Issuing Offices are located across Ontario. Click on the link, or check your telephone directory's blue pages under Government of Ontario for a location near you. What items will I need to transfer vehicle permit?
General InformationLiens (Debts on the Vehicle)Nobody wants to watch a tow truck take away their recently purchased used vehicle. That's why it's important for anyone selling or buying a used vehicle to check the lien information printed in the UVIP. A properly registered lien allows the secured party (lien holder) to take the vehicle if the amount of the lien is not paid. The secured party will be entitled to repossess the vehicle from the person who owes the money or from anyone else who buys the vehicle after the lien is registered. The lien information certificate may contain the following basic information:
As the seller of the vehicle, the lien may be registered against you as the debtor. If you have paid off the amount owing to the secured party, you should contact the secured party named in the certificate and request that the lien be discharged. If you have not paid off the lien, the secured party is not required to remove the lien. Previous owners may be listed as debtors on the lien certificate. If this is the case, you should contact each secured party named in the certificate to determine the status of the lien. If the lien has been paid off, you should ask the secured party to discharge the lien. If it has not been paid off, the lien will continue against the vehicle until it is paid. If it is not paid, the secured party can repossess the vehicle at any time from any person. Sellers take note:If you are selling a vehicle which you have not used commercially and have paid off the amount of the lien, the lender should have registered a discharged within 30 days. If a lender fails to do so, the borrower can send the lender a written notice requiring the lender to pay the borrower $500 and any damages resulting from the failure to discharge. The branch will remove a discharged registration 60 days later. For information concerning procedures for vehicles used commercially, contact the Ministry of Government Services. Motor Vehicle InsuranceOntario has compulsory automobile insurance. Before you can attach plates to a vehicle or renew your registration, or buy a temporary (trip) permit the vehicle must be insured. In Ontario, private companies provide insurance coverage. All vehicles must be insured for third party liability for at least $200,000. This covers you in the event that you injure or kill someone or damage someone's property. Collision insurance to cover damage to your own vehicle is a good idea but not required by law. When driving your own or someone else's vehicle, you must carry the pink liability insurance card for that particular vehicle. If you drive someone else's vehicle, make sure you are covered under the insurance to operate the vehicle. You must show this card when a police officer asks for it. If you do not, you can be fined up to $400. Retail Sales TaxWhen you buy a used vehicle privately, the retail sales tax you pay is based on the purchase price or the vehicle's wholesale value, whichever is more. If the buyer paid less than the Canadian Red Book value and an appraisal supports a lower price because of the condition of the vehicle, tax is paid on the declared price or appraised value, whichever is higher. Any reduction in tax is available only when a completed appraisal is given to a licence issuer prior to changing ownership. If the transfer has been completed and tax has been paid on the average wholesale value, an appraisal must be sent in with an application for a refund to the Ministry of Finance. Appraisal forms are available from Driver and Vehicle Licence Issuing offices and Ministry of Finance offices. Tax ExemptionPayment of retail sales tax is not required when a vehicle is a gift and is being transferred between close family members, which only includes a spouse, parent, step-parent, grand-parent, son, daughter, grandson, step-grandson, granddaughter, step-granddaughter, son-in-law, daughter-in-law, father-in-law or mother-in-law. Only one tax-free transfer per vehicle is allowed every 12 months. A statement sworn before a Commissioner of Oaths will be required for certain transfers, such as gifts between family members and transfers for insurance purposes. Diplomats and Status Indians who qualify will be able to complete a transfer without paying tax by simply showing their identity card. Customer Service OptionsBelow are the Ministry of Transportation service channels where you can purchase/order this service. Click on the underlined titles below for an address/location.
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