You are reading this article because you are interested in either selling your vehicle or buying a used vehicle. In Ontario, there are some requirements you should be aware of, both to protect yourself, and to ensure that your vehicle is more saleable.
Used Vehicle Information Package
If you are selling your vehicle, you must purchase a Used Vehicle Information Package. It costs $20.00, and you can get it from most Driver and Vehicle Licensing Offices in Ontario, as well as by mail, phone or on the Ministry of Transportation’s web site at http://www.mto.gov.on.ca/english/dandv/catalogue.htm. This is the responsibility of the seller, not the buyer. The law provides stiff penalties for persons who buy or sell vehicles without using the Package – on a first offence a fine of $100 – $500, and on a second or subsequent conviction, a fine of $200 – $1,000.
Some sales of vehicles are exempt from the use of the package, such as transfers among certain family members, spouses and same-sex partners. There are other classes of individuals and those bound by certain contractual relationships that are not bound to provide a Used Vehicle Information Package as well.
LIENS
A lien is claim against personal property, usually by a lender. If you buy a vehicle and the seller fails to pay off the money owing, you are stuck with the lien. You should check the Used Vehicle Information Package for liens on the motor vehicle before you buy. If there is a lien on the vehicle, you should insist on getting a pay-out statement from the lender, and then you should pay the amount directly to the lender to retire the loan.
Brands
Branding, or classification, of a motor vehicle is required where the vehicle has been deemed a “total loss”. A total loss is defined as a situation where the cost of repairing the vehicle, plus its salvage value, exceed the value of the motor vehicle just before an accident. Insurers or repairers who deal with irreparable or total loss motor vehicles are required to report this to the Ministry of Transportation. The vehicle may be re-licenced as a “rebuilt” motor vehicle, if it has been branded as “salvage”, but not one that has been branded as “irreparable”. This requirement is relatively recent, so an older vehicle may have been rebuilt without any branding noted on the Used Vehicle Information Package. Be careful if the vehicle history shows that at some point an insurance company owned the vehicle. This probably means that the vehicle was, at some point, considered by the insurance company to have been a total loss.
What the seller must do
The seller must show the Used Vehicle Information Package to any prospective buyer, and must provide the buyer with it once the contract for the sale of the vehicle is made. The seller will then remove the plates from the vehicle and remove any personal items from the vehicle. If there are after-market items in the vehicle, the seller and buyer must make it clear what items are going to be removed from the vehicle and what items will stay. The seller must also complete the transfer on the back of the vehicle registration permit. The seller provides the “vehicle portion” of the permit to the buyer, with the completed application for transfer, and keeps the “plate portion” with the licence plates. The seller may use the plates on a different vehicle at a later time, or may return the plates to the Ministry of Transportation for a refund of any unused months of registration.
What the buyer must do
The buyer must ask to see the Used Vehicle Information Package from the seller. You should check for any liens, and make sure that the person who is selling the vehicle is the same person listed as owner. Ask to see identification. If you purchase a vehicle with a shady history, or with a “brand”, you may later discover that your insurance company considers it to have been a stolen vehicle and will likely not pay any claim for damage to or loss of the vehicle.The seller should also ensure that the buyer has registered the transfer of ownership with the Ministry of Transportation.
The buyer must go to a Ministry of Transportation Vehicle Licence office within six days of the date of the purchase and present the Used Vehicle Information Package with the bill of sale portion complete, the Application for Transfer (vehicle portion of permit), a Safety Standards Certificate, Emission Certificate, valid insurance information, an Ontario Driver’s Licence or other identification, the plate portion of permit (if using existing licence plates), payment for retail sales tax, vehicle registration fees and, if required, new licence plates.
Fines for driving a vehicle which has not been properly registered or without valid plates and a proper validation sticker can be quite hefty. If you are pulled over with invalid plates or you have failed to register your vehicle, it will likely be impounded by the police.
