I want to buy a car from someone. What should I think about?
Question & AnswerI want to buy a car from someone. What should I think about?
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.