Canadian Laws on Selling a Car
Used Vehicle Information Package
- In order to sell a used vehicle in Canada, sellers must first purchase a Used Vehicle Information Package from the Ministry of Transportation. The Used Vehicle Information Package contains the registration history of the vehicle, so that prospective buyers will know the number of times the car has changed hands. The package also contains information regarding any liens against the vehicle. Both of the aforementioned elements of the package are in place to protect the buyer. Along with these disclosure documents, however, there are also necessary forms provided to record the bill of sale and the taxes owed on that sale. (The taxes are determined by the average value of a vehicle of the same make and model. Thus, even if the buyer pays well below the Blue Book value, the tax will be predetermined by the government.) The package must be showed to any potential buyers before any sale can be valid.
- In addition to the Information package, many sellers choose to provide a valid safety inspection, as the safety inspection is required for vehicle registration. A safety inspection is performed by an authorized mechanic who checks the brakes and steering of the vehicle as well as the gas lines, lights, turn signals and horns. If the vehicle passes the safety inspection, the seller is presented with a Safety Standards Certificate that is valid for 36 days. Presentation of this certificate to prospective buyers will guarantee that a buyer will be able to register the vehicle.
- Some vehicles are also required to meet emissions standards. If the car or truck was manufactured before 1988, no emissions test is necessary. However, if the car was manufactured in 1988 or later, the vehicle may need a test. In Ontario, during even-numbered years, cars from odd-numbered years must pass emissions tests. So, in 2010 cars manufactured in 1989, 1991, 1993, etc., must take and pass an emissions test before registration. Including a Drive Clean Certificate if necessary will further ensure that the buyer can register the vehicle.