Selling Your Vehicle? Make Sure You Transfer the Car’s Ownership

Selling your car can be a bit of a hassle. You need to take photos, list it, and deal with a lot of potential buyers. Once it’s sold, you should notify your car insurance provider and ensure the vehicle’s ownership is transferred to the new owner. If not, you may be still be considered the registered owner and can be held legally responsible for the vehicle, like one woman in Toronto discovered.

There are two options for selling your vehicle. You can either sell it privately or to a dealership.

How to sell your vehicle privately

If you choose to sell your vehicle privately, the easiest way is to go about it is to list it online on a site for selling cars such as AutoTrader,, or Kijiji.

Before listing it, make sure to give the car a good cleaning, take decent photos, and research the vehicle’s value. You can look at the sites mentioned above to determine your car’s value or check out sites like or

Many factors will impact the vehicle’s price. For example, if it’s been in an accident, what colour it is, if you smoked in it, its service history, whether or not there are extended warranties, when the brakes and the battery were last replaced, and if there are winter tires.

It’s recommended that you only accept cash or bank drafts that are received in person. They’re the most secure forms of payment because personal cheques and wire transfers can be fraudulent.

When you do sell, several steps are required, and they vary depending on where you live.

For instance, residents of Ontario are required to purchase a used vehicle information package (UVIP) from ServiceOntario for $20. This document has information about the vehicle (such as the year, make, and model), registration history, a bill of sale, and more.

You must also ensure the vehicle doesn’t have any money owing on it and that the vehicle identification number is the same as on their permit.

When selling the vehicle, you must give the buyer the following:

  • The used vehicle information package.
  • A signed bill of sale that includes your name, the buyer’s name and address, the date, and the sale price.
  • An application for transfer (which is on the back of an ownership permit) that’s completed and signed.
  • A certificate verifying the vehicle meets safety standards (if required), which you can get from a licensed mechanic who has an Ontario Motor Vehicle Inspection Station sign.

The buyer will need to register the car within six days of purchasing the vehicle at a ServiceOntario centre.

For residents of Alberta, a standard bill of sale form is required when selling your vehicle. The bill of sale must include:

  • The names and addresses of both the buyer and seller.
  • The Vehicle Identification Number (VIN).
  • The vehicle’s cost.
  • The make, model/series, colour, style, and year.
  • The signatures of both the buyer and seller.

While other details are optional, it’s recommended that the following information also be included:

  • Odometer reading.
  • The buyer’s and seller’s phone numbers.
  • Witness signatures.
  • If there are any liens against the vehicle.
  • If the vehicle was paid for in full.
  • The method of payment.
  • The payment terms (if any).
  • Any special conditions of the sale.
  • Where the vehicle was last registered.

The buyer will need to transfer the vehicle’s registration. To complete the transfer, they must go to a registry agent, bring identification, prove that they own the car (the bill of sale), and verify that the car is insured.

If the buyer fails to transfer the ownership, you may be on the hook for any towing bills, traffic fines, and legal liabilities. To ensure the transfer does take place; you can hold onto the vehicle until the buyer shows you documents proving it, or you can go with them to a provincial registry office.

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Selling your vehicle to a dealership

Selling to a dealership or trading it in can help avoid a lot of trouble down the road. While you might not get as much money than what you will get from a private sale, it can be a much easier process because the dealer will handle all of the paperwork. You also don’t have to spend time creating an ad, set up a time for test drives, or answer a lot of questions from buyers.

The dealer will take into account the costs of making improvements to the car to make a profit. If there are dents, scratches, or stains, they will need to be repaired. The costs to fix those will usually be deducted from the offer. On the other hand, you don’t need to take care of these before selling — which is what you likely would have had to do if you sold it on your own.

There may also be some tax savings if you trade in the vehicle for another one. In Ontario, for example, buyers only have to pay the tax on the difference between both vehicles. If the trade-in value is $12,500 and the new vehicle costs $37,500, the sales tax is on the difference. In this case, it’s $25,000.

After the sale

Once you've completed the sale of your vehicle, you should notify your car insurance company to let them know you have sold it. If you're buying another car, your insurer will adjust the premium.