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I want to buy a car from the man down the street. What do I need to think about?
Clear language definitions to common legal terms.
Buying a car from a private seller can be more risky than buying from a registered used car dealer. There are no consumer laws to protect you when you buy from a private seller. This means that you have fewer options if something goes wrong.
If something goes wrong in a private sale, you cannot complain to the agencies that would help you if you bought from a registered dealer. Your only option may be to go to court.
If you are buying a used car from a private seller, they must provide you with a Used Vehicle Information Package (UVIP). It is also a good idea to get a vehicle history report from CarProof or Carfax.
You should also ask the seller for information like:
- the car’s accident history
- copies of service records, including maintenance and repairs
- a copy of past emissions tests (if applicable)
- proof that they own the car
- proof that there is no money owed on the car
- proof that there is no lien on the car
Try to get this information in writing.
Check to see if the information the seller gives you matches what is in the Carproof or Carfax report. To check that the seller owns the car, look at the vehicle registration and compare the name to the seller’s driver’s licence or other official document.
If it turns out that the seller lied about the car, this can help you in court.
You may also want to:
- ask why the person wants to sell the car
- take a test drive
- have the car inspected by a trusted mechanic before you buy it
Try not to pay for the car with cash. Pay with a cheque so that you have evidence of what you paid and who was paid. Ask for a receipt that includes seller’s information. The receipt will help you figure out how much tax you will have to pay.
You should also be aware that some unlicensed motor vehicle dealers pretend to be private sellers. This is illegal, and these dealers are called curbsiders. If you buy from a curbsider, you are not covered by the consumer protection laws that protect you if you buy from a registered dealer.
Get a Used Vehicle Information Package (UVIP)
When you buy a used car from a private seller, they must give you a Used Vehicle Information Package (UVIP).
The seller should pay for the UVIP because it is their responsibility to give you one.
The UVIP includes important information like:
- the car details (including the year, make, model, color, body type, cylinders, and power)
- the registration history in Ontario (including all present and previous owners, their city of residence, and mileage)
- the car’s fair market value, and the minimum amount of payable tax
- retail sales tax information
- a bill of sale that includes the seller’s name, the date of the sale, and the purchase price
- if there are any liens on the car
If the seller doesn’t give you a UVIP, you can order one through the Ontario government’s website. It costs $20, and can be paid for by credit card. Once you pay, the package will be mailed to you in about 5 business days.
To order a UVIP you need:
- the vehicle identification number (VIN) or the licence plate number of the car
- your Ontario driver's licence number or registrant identification number (RIN), or
- your name and address
Get a vehicle history report
When you buy a used car from a private seller, it is a good idea to get a vehicle history report from CarProof or Carfax. A vehicle history report is not the same as a Used Vehicle Information Package (UVIP).
It contains information about:
- if the car has been damaged or in an accident
- if there is a lien on the car
- if the car is stolen
- if there is a safety recall on the car
A lien is when there is money owing on the vehicle. For example, if the original owner has not fully paid their car loan, there will be a lien on the vehicle. It’s important to know if there is a lien so that you don’t get stuck paying off the original car loan.
If there is a lien that has not been paid, the creditor can come and take the car away from you. A creditor is a person who is owed money.
Get proof that the seller can sell the vehicle
It’s important to make sure that the seller is legally allowed to sell you the car before you buy it. Sometimes people will try to sell a car that they are not allowed to sell. For example, a person is not allowed to sell you a car if:
- the car is stolen
- they do not own the car
- they don’t have permission from the owner to sell the car
- they are a curbsider, which means they are an unregistered dealer and you are not protected by the law
You can read more about curbsiders in the Next Step “Ask yourself if the seller is a curbsider” of the question “I want to buy a car from a used car dealer. What do I need to know?”
If you buy a car that the seller does not have the right to sell, the police can take the car away.
You can make sure that the seller has the right to sell you the car in a few ways:
- Match the seller’s driver’s licence to the information on the car’s registration.
- Match their driver’s licence to information in the Used Vehicle Information Package (UVIP) or the Vehicle History Report.
- Ask for the bill of sale from the original purchase.
Get a Safety Standards Certificate
You must get a Safety Standards Certificate when you buy a car for a couple of reasons:
- The certificate shows that the car has passed a safety inspection by an authorized mechanic at a government-approved inspection station.
- You need the certificate to get licence plates for your car.
A safety inspection only makes sure that the car is safe to drive. It checks for things like the brakes, lights, and steering. It will not tell you if things like the radio, engine or the heater are working.
Private sellers do not have to give you a certificate, but you can ask the seller to include it as part of the sale. If the seller does not give you a certificate, you will have to have the car inspected yourself.
The Safety Standards Certificate expires 36 days after the safety check. Make sure that the certificate will still be valid on the day you get licence plates.
Transfer the registration
When you buy a used car, you have 6 days to transfer the registration into your name.
The car must be registered in your name before you can drive it. If you have not registered the car but need to take it home, you should have it towed to your house.
The previous owner must remove their licence plates from the car. Even if you intend to keep the same plates, they must be registered under your name before you can use them.
To register the car, you need to go to a ServiceOntario centre. You should bring:
- proof of insurance
- your Ontario Driver’s Licence
- the Used Vehicle Information Package (UVIP)
- the bill of sale (there is a section at the bottom of the UVIP for this)
- the Safety Standards Certificate (SSC)
- emissions test results, if applicable
- an owner’s permit with the completed Application for Transfer portion on the back
- odometer reading information
You will have to pay 13% retail sales tax on the price you pay for the car. You pay this tax at the ServiceOntario centre, not to the seller. The amount you are taxed on is either the purchase price or the wholesale value of the car, whichever amount is greater.
Wholesale price is based on the values in the Canadian Red Book. It is the industry standard used to decide the value of used cars. If you paid less than Canadian Red Book value, you can ask for an appraisal from a private appraiser.
If your appraisal amount is less than the Red Book value, you will be charged sales tax on either the purchase price or the appraised value of the car, whichever is greater.
If the car is over 20 years old, you may need an appraisal from the Ministry of Finance.
Note: If the car is more than one year old, you will need an emissions test. For example, if you purchased a 2014 car in 2015, you will require an emissions test.