Those looking to buy a used car in Ontario will find there are some differences in the process compared to other parts of the country – and some differences compared with buying a new car. Here’s a walkthrough outlining what steps you need to follow when buying a used car in Canada’s most populous province.
Buying a Used Car in Ontario
Step 1: Research
Before you begin searching through and responding to used vehicle listings, make sure you have a good understanding of what type of vehicle you’re looking for. Take the time now to think things through like how many seats you need, how much cargo space, and whether features like all-wheel drive and Bluetooth connectivity are important to you, as well as considering your monthly payment budget and car insurance. Putting the work into this now and narrowing your list down to a handful of viable options will save you time and make it less likely that you’ll end up back at square one later in the process. You can read more about how to decide on the best used vehicle for you in our guide to Buying a Used Car in Canada.
Step 2: Shop
Once you’re ready, you can confidently start to investigate listings for vehicles that interest you. As an Ontario driver, the safest route is to buy from a dealer registered with OMVIC (Ontario Motor Vehicle Industry Council), either directly or through online vehicle sales listing sites such as CarGurus. OMVIC-registered dealers are monitored under the Motor Vehicle Dealers Act and its regulations and code of ethics to ensure that customers are treated fairly during the car buying process. They’ll also handle certain parts of the process for you as outlined below. Used car buyers in Ontario can also deal with private sellers, which sometimes means paying a lower price but involves more legwork. Some buyers find success at vehicle auctions, though this option is best left to those with an eye for spotting potential mechanical issues independently.
While browsing online listings, beware of curbsiders, which is a term for sellers who misrepresent themselves or the vehicles they’re offering for their own gain. They engage in scams like odometer tampering, reselling stolen vehicles, or selling vehicles that can’t legally be registered due to being write-offs or flood damaged. If a deal seems too good to be true and way below the red book value, there’s a good chance it is. At any point in the process of purchasing a used vehicle, you should be prepared to trust your instincts and walk away.
Step 3: Investigate
Once you find a car that seems like a good prospect, follow these steps to do your research thoroughly before you commit to a purchase.
In Ontario, the Ministry of Transportation requires all sellers to purchase a Used Vehicle Information Package (UVIP)—effectively a basic vehicle history report—and provide it to a potential buyer. This package lists information on a vehicle’s make and model year, powertrain, vehicle registration history in the province including mileage, its insurable status, any liens that may be present on the vehicle, and its fair market value including the minimum amount of sales tax that will be due upon registration. Be sure to review this package carefully, and check the listed VIN to ensure it matches the one found on the vehicle.
If you want a more detailed report on a vehicle’s history, then it might also be worth considering purchasing a report from an agency – the main one being Carfax.
You should also ask the salesperson or private seller for additional information about the vehicle history, whether service records are available, the status of its warranty including any extended warranties that may have been purchased, and whether any required recall work has been done.
More information on how to verify whether the vehicle is being listed at a fair price, how to check its estimated fuel consumption and safety ratings, what to look for during a test drive, and other steps to take before committing to a purchase can be found at the article on Buying a Used Car in Canada.
Step 4: Purchase
If everything checks out and you decide to begin the process of purchasing the vehicle, the first thing you’ll need to do is arrange for a safety-focused vehicle inspection. In Ontario, you’ll need to supply proof of a passed safety inspection at a ServiceOntario location in order to legally put licence plates on the vehicle. If you purchase from a registered car dealership, the dealer will perform the safety inspection for you and submit the paperwork as part of the purchase process. In a private sale, you’ll need to arrange this directly with a licenced mechanic you trust, which costs between $100 and $200 on average. This step can only be skipped if ownership is being transferred between spouses.
Be skeptical if a certificate is provided for you: unscrupulous used car dealers and mechanics may work in tandem to sell vehicles with problems that would otherwise be flagged. Once the purchase is complete, you’ll have little recourse. It’s also worth noting that a safety inspection won’t check for things like whether the air conditioning or radio are working. Don’t forget to look for those things on your own during the test drive.
Once you’ve got the safety certificate in hand and have settled on a price with the seller (whether you’re negotiating a trade-in or just want some numbers knocked off the sticker price), you’ll also need to make arrangements with your insurance company to update your policy and receive proof of insurance, which is another part of the package required to register the vehicle with ServiceOntario.
If you’ve purchased a new vehicle (well, new to you) from a dealership, the staff there will help you with registering the vehicle and will charge you the required 13% retail sales tax (also known as harmonized sales tax or HST, which they will submit on your behalf. If you complete the purchase privately, you’ll need to pay that tax yourself at ServiceOntario when you register the vehicle. No matter how much you pay for the vehicle, you’ll be charged the higher amount between 13% of your purchase price or of the wholesale value listed in the UVIP, unless you have an appraisal performed that demonstrates in writing the car’s lower value. The only way to avoid paying this tax is if ownership is being transferred between close family members or you have certain special statuses.
As of April 2019, Ontario no longer requires a DriveClean emission test to be performed before vehicle ownership can be transferred.
If you’re finalizing the registration yourself following a private sale, ensure you arrive at ServiceOntario with all of the following within six days of completing the purchase:
- your driver’s licence
- the full used vehicle information package (UVIP), including the completed bill of sale
- the vehicle owner’s permit with the Application for Transfer portion on the back completed
- a passed safety standards certificate
- proof of insurance
- the vehicle’s current odometer reading information
Remember, too, that the person selling the vehicle (if a private seller) will keep the licence plates on the car as well as the plate portion of the vehicle registration permit.