Buying a used car in Canada: history, liens, safety certificate and tax, from a dealer or a private seller
A practical checklist before you pay: what an Ontario seller must give you, when you need a safety certificate, how much tax you pay on a private sale in Ontario, BC and Quebec, and how to make sure no lender has a claim on the car.
If you buy a used car from a private seller in Ontario, you pay 13% retail sales tax when you register it at ServiceOntario, calculated on the purchase price or the average wholesale value, whichever is higher. The seller is legally required to give you a Used Vehicle Information Package (UVIP), which shows any liens registered against the car and its previous owners. In British Columbia, the tax on a private sale is 12% for most passenger vehicles, and in Quebec the SAAQ collects QST when the registration is transferred.
Most of the money lost in these deals isn't lost to mechanical failure. It's lost to a debt on the car that nobody disclosed, or to an unlicensed dealer posing as a private seller. This guide sets out what to check, and in what order.
Step one: check the car's history before the test drive
Ask the seller for the vehicle identification number (VIN) before you meet. A seller who won't give it is a warning sign in itself. With the VIN you can get three kinds of information:
- The official provincial history: in Ontario, it's in the UVIP. In Quebec, you get it through SAAQclic, and it shows the number of previous owners and how the car was used before.
- A commercial history report: such as a CARFAX Canada report, which lists reported accidents and insurance claims. ICBC in BC recommends getting a history report before you buy, and OMVIC lists a seller's refusal to provide a CarFax report or UVIP as a sign of an unlicensed dealer.
- Is it stolen? Quebec's Office de la protection du consommateur recommends checking the Canadian Police Information Centre (CPIC) database.
Then have the car inspected by a mechanic you choose, not one the seller recommends. You'll find garages in our auto repair directory.
The UVIP in Ontario: what's in it and who pays for it
In Ontario, the law requires a private seller to give the buyer a Used Vehicle Information Package when selling a used passenger car, light truck or motorcycle. It costs $20, and the seller buys it from ServiceOntario online or at any centre.
The package includes:
- The vehicle's registration history in Ontario: current and previous owners, where they lived, and odometer readings.
- Lien information: any debt registered against the vehicle.
- The average wholesale value, which is the minimum amount sales tax is calculated on.
- The vehicle's last known status, including whether it has been registered as "unfit", and any wreck reports.
- A Bill of Sale form.
A package isn't required for transfers between family members, or when you buy from a registered dealer.
Liens: why you could end up paying for the car twice
If there's an unpaid loan on the car, the debt follows the car, not the seller, and the lender may repossess it from you. Check according to your province:
| Province | Where to check for liens | Deadline to register the car in your name |
|---|---|---|
| Ontario | The lien section of the UVIP | 6 days from purchase |
| British Columbia | The Personal Property Registry | 10 days from purchase, at an Autoplan broker |
| Quebec | The RDPRM register (searches are paid) | Check with the SAAQ |
If a registered debt shows up, don't pay the seller directly. Ask for the debt to be paid off to the lender and for the lien to be discharged in writing before the handover. In Quebec, the Office de la protection du consommateur points out that the registration certificate isn't proof of ownership, so draw up a detailed contract of sale with the seller.
The safety certificate: when you need it and where to get it
In Ontario, a Safety Standards Certificate shows that the vehicle met minimum safety standards on the day of the inspection only. It isn't a guarantee of the car's condition. It's issued by DriveON inspection stations licensed by the Ministry of Transportation, it stays valid for 36 calendar days from the inspection date, and the fee varies from station to station because the government doesn't set it.
You can buy the car and register it in your name without the certificate, but you can't put plates on it and drive it until you have one. A transfer to a spouse is exempt. So agree in writing with the seller on who pays for the inspection, and on the price if it turns up repairs.
In Quebec and British Columbia, the official advice is to get an independent mechanical inspection before you buy. Mandatory inspection rules for certain cases, such as a car coming from another province, are set by the SAAQ and ICBC.
Tax on a private sale in Ontario, BC and Quebec
Buying from a private seller doesn't mean you're exempt from tax. You pay it to the government when you register the car, not to the seller.
| Province | Tax on a private purchase | Calculated on | Where it's paid |
|---|---|---|---|
| Ontario | Retail sales tax (RST), 13% | The purchase price or the wholesale value, whichever is higher | ServiceOntario |
| British Columbia | PST of 12% on passenger vehicles under $125,000, then 15% and 20% on more expensive ones | The purchase price or the Canadian Black Book average wholesale value, whichever is higher | An Autoplan broker, at registration |
| Quebec | QST | The selling price, or the estimated value if higher in the cases Revenu Québec specifies | The SAAQ, when the registration is transferred |
What this means in practice: if you buy a car in Ontario for $8,000 and its wholesale value in the UVIP is $10,000, the tax is calculated on $10,000. Writing a lower price than you actually paid on the bill of sale won't change that, because the wholesale value is the minimum tax base. In Ontario, there's no tax on a car given as a gift to a close family member, provided you complete a Sworn Statement for a Family Gift.
If you buy from a dealer, GST/HST or provincial sales tax is normally added to the invoice.
Licensed dealer or private seller: what you give up with each
In Ontario, car dealers are regulated by OMVIC. Buying from an OMVIC-registered dealer gives you the protection of the Motor Vehicle Dealers Act:
- All-in pricing: the advertised price must include every fee the dealer intends to charge, except HST and licensing fees.
- Disclosure: you're entitled to full disclosure of the vehicle's history, past use and condition. You may be able to cancel the contract if the dealer failed to disclose specific information the law requires.
- The compensation fund: it compensates buyers who suffered a proven financial loss dealing with a registered dealer. Claims must be made within two years of the problem, and private sales aren't covered.
In British Columbia, dealers are licensed by the VSA, and buying from a licensed dealer puts you under the province's consumer protection law. In Quebec, a dealer must hold a licence from the Office de la protection du consommateur and must display a label on the car showing the price, the odometer reading, the warranty class and any past use, such as taxi or rental. The law guarantees that the car will be fit for normal use for a reasonable period.
Buying privately is usually cheaper, but it comes with almost no protection. Quebec's Office de la protection du consommateur says plainly that the Consumer Protection Act doesn't govern transactions between two individuals, and OMVIC confirms that it doesn't regulate private sales. You'll find dealers in our car dealers directory; check their registration yourself on the OMVIC, VSA or Office de la protection du consommateur website.
Curbsiders: how to spot an unlicensed dealer
Some people sell cars as a business while posing as private sellers, to avoid the licence and the obligations that come with it. Warning signs listed by OMVIC include:
- The seller has several cars for sale, or is selling from what looks like a business location.
- The price is clearly below market value.
- The name on the ownership doesn't match the seller's ID, or the car was registered in their name only a few days ago.
- They refuse an independent inspection, a CarFax report or the UVIP.
- They avoid writing a bill of sale with their name and address on it.
Before you pay: your paperwork checklist
- A written, signed bill of sale with both parties' names and addresses, the VIN, the price and the date.
- In Ontario: the vehicle portion of the ownership permit, with the back completed by the seller, the UVIP, and the safety certificate if there is one. In BC: the seller's original registration (APV250) and the transfer/tax form (APV9T) with original signatures on both; electronic signatures aren't accepted.
- Valid insurance before you drive. See our guide to car insurance for newcomers, because the premium may change your decision.
- A valid driver's licence for your province. The details are in our guide to exchanging a foreign driver's licence.
If you're buying before winter, check the tires and read our guide to driving in a Canadian winter.
Frequently asked questions
Do I pay tax if a friend sells me the car for a token price?
In Ontario and BC, the tax is calculated on the purchase price or the wholesale value, whichever is higher, so a token price doesn't reduce it. Ontario's exemption applies only to a gift to a close family member, with a sworn statement.
Does a safety certificate mean the car is in good condition?
No. The Government of Ontario says it isn't a guarantee of the vehicle's condition, only proof that it met minimum standards on the day of the inspection. An independent mechanical inspection is a different thing.
Who buys the UVIP in Ontario?
The seller is legally required to give it to the buyer. It costs $20 from ServiceOntario.
What if a debt on the car shows up after I buy it?
The lender may repossess the car, because the debt is registered against it. That's why you check the lien registry before paying and insist on a written discharge of the lien.
Do I need a credit history to finance a used car?
Financing depends on the lender's assessment, and your credit history affects both approval and the interest rate. Start building it with our guide to building a credit score from scratch.