How to finalize a used car private sale, documents needed, and what to know

You’re about to take ownership of the used car you’ve bought and you can’t wait to get behind the wheel.

But there remain a couple of final steps in the transaction before you become the legal owner of the prized vehicle you’ve found after an exhaustive search.

Chances are, because you requested the  CARFAX Canada report, you’ve already checked to make sure that there are no outstanding payments on the car, that it has not been in an unreported accident, and that its registration was done according to the rules. You should also ensure that the car you’re buying has not been put up as collateral by its previous owner.

As an added precaution, you visited the site of the provincial department of transport, where, using the vehicle identification number, you checked that the car can be registered in your province and is not subject to removal from the road due to a serious accident, for example.

You’ve also contacted your insurance company and obtained an insurance certificate to take with you to the vehicle registry office. It will confirm that you’ll be covered as soon as the ownership is officially transferred. This kind of coverage is mandatory under the law, at least for civil liability, if your car is not fully covered.

Now it’s time to head to the vehicle registry office. Simply go to the outlet nearest to you or the seller, and go together, as the transaction must be done with both parties present. It’s possible to send someone else by signing a proxy agreement, but this adds an extra identification step to the process.

Buyer and seller must have a piece of identification (a driver’s license would be a good idea), the registration certificate of the used car changing hands, and, if one of the two people is a minor, authorization signed by the parents. Note that a valid driver’s license is not mandatory to buy a vehicle.

The method of payment should also be planned, be it by cheque, debit card or credit card, because the new owner will have to pay for the registration for the remainder of the current year (and sometimes for more than 12 months, depending on the expiry date), while the seller may receive a credit for the unused portion of the registration.

One thing is certain, all applicable sales taxes will have to be paid. These are calculated according to the value as estimated by independent bodies or the value of the transaction and are based on the year of the vehicle. In other words, entering $1 as the value of the car won’t get you out of paying taxes on the sale.

In fact, the only exception to the taxes is if the vehicle is a donation from one family member to another. However, you’ll need to prove your relationship with legal documents, such as a birth or marriage certificate.

You’ve presented your documents and paid the taxes and registration fee. You’re now the proud owner of a pre-owned gem of a vehicle, and you can climb behind the wheel knowing that all your effort was worth it!