Buying a used car may seem like something that’s pretty standard across Canada, but each province and territory has its own unique steps that you need to take before you get the keys to your car. There could be more steps in one region compared to another, so here is our guide on how to buy a used car/vehicle in Ontario.
Specifics to purchasing a used car in Ontario
There are certain parts of the used car buying process that are unique to each province, and Ontario is no different. Here are some of the steps you’ll need to take that are specific to buying a used car in Ontario. Most of these pieces are taken care of if you’re purchasing from a dealership, but it’s still very good to know.
Get a Used Vehicle Information Package
Though this is unique to buying a used car privately, it’s important to know that if you are buying a used car in Ontario it must have a Used Vehicle Information Package, or UVIP, from the Ontario Ministry of Transportation. It costs about $20, and in the package is a description of the vehicle, the VIN, year, make and model, retail sales tax requirements, a bill of sale and tips on vehicle safety standards inspections. This must be shown by the seller to the buyer as it’s an important part of finalizing the sale of the vehicle.
Know your rights as a consumer
Buying a used car can be stressful, and there isn’t a standard 30-day warranty on a used car in Ontario, so you’ll need make sure you have all the tools before you buy. Whether purchasing from a private seller or a dealership, OMVIC, the Ontario Motor Vehicle Industry Council, is a resource that maintains a fair and informed marketplace by protecting the rights of consumers. Read up on how they can help protect you during the buying process.
Transfer legal documents
When purchasing a second-hand car in Ontario, the seller must give the vehicle permit, the completed and signed Application for Transfer (found on the back of the ‘vehicle portion’ of the registration permit) and the completed Bill of Sale from the UVIP (with their name, signature, date and purchase price) to the buyer.
Replace licence plates
The person selling the vehicle keeps the licence plates (Ontario uses a plate-to-owner registration system which means they stay with you) and the plate portion of the vehicle registration permit.
Register the vehicle
If you’ve purchased a used car privately, you must register the used vehicle within six days of the sale. You’ll need to take the UVIP, the vehicle permit and the Application for Transfer to the Driver and Vehicle Licensing Office. Here, you’ll pay the retail sales tax, based on the purchase price or the wholesale value (whichever is greater). You’ll also pay the licensing fees for the plates and permit. After that, you can attach plates you already own (you’ll need to bring in the plate portion of your vehicle registration permit), and validate them with a sticker or purchase new plates with proof of your identity that verifies your legal name, date of birth and signature.
Tax on used cars
In Ontario, when purchasing a used car either privately or from a dealership, the person buying the vehicle will pay the sales tax when you register as the legal owner of the used car. The amount of tax you pay can be different though, according to Ontario.ca “In most cases, buyers pay 13% RST or HST in Ontario. The amount is based on the purchase price or the vehicle’s wholesale value, whichever is greater”. There are some exemptions, including if you’re transferring the vehicle to a family member as a gift.
Common tips for buying a used car
No matter which province you’re buying a used car in, there are many steps in the used car buying process that are similar province to province, but knowing what to look for and what to ask when buying a used car can relieve stress during your search.
- Choose the kind of vehicle you want. Think about which features are necessities, and which are luxuries. Evaluate a car’s make/model, fuel economy, safety rating, size, driving experience and resale value.
- Set a budget. How much are you willing to spend monthly, or at once? See what the vehicle’s value range is so you will know what is a fair price.
- Start looking. Research your next vehicle by looking at dealership websites, online marketplaces and public auctions. Figure out whether you want to buy a used car from a dealer or privately. Look into specifics like “how many kilometers is too much for a used car” or “how old is too old for a used car”.
- Test drive the car. Get a feel for the car’s accessories and ensure they work. A 30-minute test drive is important to see how a car runs in a realistic setting.
- Know the history. Our Vehicle History Report + Lien Check provides you with information that’s critical to understand when buying a used car. You can find out if a vehicle has prior accidents, money owing, missed recalls and much more.
- Get a pre-purchase inspection. Getting the car inspected is important to know the cosmetic, mechanical and safety condition of a car. This is a critical step and can help provide negotiation opportunities.
- Check the VIN. VINs have details about a specific car like year, make, model and where it was made. A VIN is typically found on the inside of the driver’s door jamb and windshield. To decode it, you can enter it into our free decoder tool.
- Ask questions. Why they are selling the car? Is it up to date for maintenance? Is it still under warranty? These are just a few of the questions to ask when buying a used car.
- Negotiate. Before you start, get the vehicle’s Value Range, and learn what could influence the vehicle’s value. This will help you make a confident offer based on your research and budget. Keep your emotions in check and be prepared to walk away – a successful agreement will benefit both parties.
- Get insurance. You’ll need to update your insurance before finalizing the sale, so shop around and see what’s out there in terms of prices what your premiums will cover.
Knowing the steps involved in buying a used car in Ontario can help with speeding up the purchase and keeping the stress-levels down during the entire process. If a new car is in your future and you’re not sure what to do with your old one, check out our Used Car Selling Guide and our Trade-in Guide to see what option best suits you!