Question 1

Do I need a bill of sale to sell a car privately in Canada?

Accepted Answer

Yes. A signed bill of sale is required in every province for a private vehicle sale. It records the buyer, seller, vehicle details, agreed price, and date. Both parties should keep a signed copy. Without a bill of sale, you have no proof of the transaction and may remain liable for the vehicle.

Question 2

Who pays the vehicle transfer tax — buyer or seller?

Accepted Answer

The buyer pays provincial vehicle transfer tax (RST/PST) when registering the vehicle at the provincial registry. In most provinces, the tax is calculated on the sale price. In Ontario and some other provinces, it is calculated on the higher of the sale price or the wholesale book value — so understating the price does not help the buyer.

Question 3

Do licence plates stay with the seller or the car?

Accepted Answer

In Ontario, Quebec, and most other provinces, licence plates stay with the seller. The buyer must obtain their own plates when registering the vehicle. In Alberta and a few other provinces, plates may transfer with the vehicle. Always remove your plates before the buyer drives away unless your province explicitly allows plate transfers.

Question 4

Do I need a safety certificate to sell a car privately?

Accepted Answer

It depends on the province. Ontario does not require a safety certificate for the sale itself, but without one the buyer cannot put plates on the car. BC, Manitoba, and several other provinces have their own inspection requirements. Check your province's guide on this page for the specific rule.

Question 5

What happens if there is a lien on the car I want to sell?

Accepted Answer

You must pay off the lien and obtain a lien release before you can legally transfer ownership. Selling a vehicle with an undisclosed lien is illegal and exposes you to significant liability. The buyer can lose the vehicle to the lender if a lien is discovered after purchase. Run a PPSA search on your own vehicle to confirm your lien status before listing.

Sell a Car Privately in Canada

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