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HomeCar Insurance ResourcesNotifying your insurance company when replacing your old car

If you’re replacing your old car with a new one in Canada, it’s essential to notify your insurance company. Here are the steps you might want to follow:

  1. Call your insurance agent or company: When you know you’re going to replace your old car, contact your insurer as soon as possible. They need to know about the change because it could affect your premium. Be sure to ask about any potential rate changes so there are no surprises on your next bill.
  2. Provide necessary information about the new vehicle: The insurance company will need information about the new vehicle, such as its make, model, year, and VIN (Vehicle Identification Number). If you’ve taken out a loan to buy the car, the lender’s information will also be required.
  3. Adjust your coverage if necessary: With a new car, you might need to change your insurance coverage. For example, if your old car only had liability coverage, you might want to add comprehensive and collision coverage for your new car. Or if your new car has advanced safety features, you might be eligible for certain discounts.
  4. Confirm the switch: Make sure the insurer has removed the old car from your policy and added the new one. If you’re trading in your old vehicle, the dealer will likely handle the paperwork to cancel the old vehicle’s registration. But if you’re selling it privately, you’ll have to handle this.
  5. Provide proof of insurance for the new car: After your insurer has made the switch, ask them to send you a new proof of insurance card or letter. You’ll need this when you register your new vehicle.

It’s always a good idea to shop around for car insurance when buying a new car. Rates can vary widely among providers, so it might be a good time to see if you can get a better deal. It’s also worth checking what the insurance requirements are in your specific province or territory, as auto insurance is regulated at the provincial level in Canada.

Does it cost to transfer insurance to another car

Whether there’s a cost to transfer your car insurance to another vehicle depends on a few factors:

  1. The new vehicle’s details: If the new vehicle you’re insuring is more valuable, has a higher theft rate, or is more expensive to repair, your insurance premium might increase. Conversely, if the new vehicle is less expensive or considered safer, your insurance premium might decrease.
  2. Your insurance company’s policies: Some insurance companies might charge a small administrative fee to make changes to your policy. This isn’t common, but it’s worth asking about when you contact your insurance company.
  3. Changes to your coverage: If you choose to increase your coverage (for example, by adding comprehensive or collision coverage for a new car when you only had liability coverage for the old one), your premium will increase.
  4. Cancellation fees: If you’re changing insurance providers rather than just transferring your policy to a new car, you might need to pay a cancellation fee. This is more likely if you’re cancelling your policy before it expires.

Ask about any potential changes to your premium or fees before you make the switch. This way, you’ll know exactly what to expect.

How much does it cost to transfer a car?

The cost of transferring a car (which often involves a vehicle registration transfer and paying taxes on the sales price) varies by province in Canada.

Here’s a general idea of what you might expect:

  1. Alberta: In Alberta, a vehicle registration transfer costs around CAD $22.
  2. British Columbia: In BC, transfer tax is calculated as 12% of the vehicle’s purchase price or fair market value, whichever is higher. There is also a transfer fee of CAD $18.
  3. Manitoba: Manitoba Public Insurance charges a transfer of ownership fee of CAD $10 plus the applicable taxes on the purchase price or the red book value, whichever is higher.
  4. New Brunswick: The province charges 15% Harmonized Sales Tax (HST) on the purchase price or the Red Book value (whichever is higher). There is no specific fee for the transfer of ownership itself.
  5. Newfoundland and Labrador: The province charges 15% Harmonized Sales Tax (HST) on the purchase price or the Red Book value (whichever is higher).
  6. Nova Scotia: The province charges 15% Harmonized Sales Tax (HST) on the purchase price or the Red Book value (whichever is higher). The transfer fee is CAD $13.10.
  7. Ontario: In Ontario, you would pay a retail sales tax (RST) that’s calculated as a percentage of the purchase price or the Canadian Red Book price, whichever is higher. This percentage varies from 13% to 20% depending on the type of vehicle. The transfer fee is CAD $32.
  8. Prince Edward Island: The province charges Harmonized Sales Tax (HST) at a rate of 15% on the purchase price or the Red Book value (whichever is higher). The transfer fee is CAD $20.
  9. Quebec: In Quebec, the QST (Quebec Sales Tax) is 9.975% of the purchase price or the estimated value. The transfer fee is CAD $28.
  10. Saskatchewan: In Saskatchewan, the transfer of ownership fee is CAD $20.
  11. Northwest Territories: The transfer fee is CAD $20, and there is a 5% sales tax.
  12. Yukon: The transfer fee is CAD $15. The territory charges a 5% sales tax on the purchase price.
  13. Nunavut: The territory does not charge for vehicle transfers, and there is no sales tax.

Always check with the appropriate provincial agency for the most accurate information.

About the Author: Valerie D. Hahn

Valerie is an insurance editor, journalist, and business professional at RateLab. She has more than 15 years of experience in personal financial products. She strives to educate readers and ensure that they are properly protected.

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