When you are planning to sell a vehicle privately in Ontario, there are several mandatory disclosures you must provide. This will make the sale of the vehicle legal.
What is Vehicle Disclosure?
Vehicle Disclosure is factual details about the condition, history, and past use of the vehicle.
Selling a Private Vehicle in Ontario
It is Ontario Law that when a person privately sells a vehicle, they must obtain a used vehicle package from the MTO. This package includes:
- A full description of the vehicle
- Plate number
- Vehicle Identification number
- Body Type
- Ontario vehicle registration history
- Liens against the vehicle
- Odometer reading
- Retail sales tax requirements
- Values of the vehicle, wholesale, and retail
- Bill of sale
- Tips on vehicle safety standards inspections
Sellers of a used vehicle in Ontario have obligations that they must adhere to such as:
- Purchase the used vehicle package from The Ministry Of Transportation
- Ensure the information is correct by reading it carefully.
- Complete your name, signature, date, purchase price, and the name of the buyer on the bill of sale.
- Application for transfer must be completed and signed.
- Used vehicle information package must be shown to potential buyers
- Used vehicle information package, along with the vehicle portion of the registration is then given to the buyer
- The seller must remove their license plates and retain the plate portion of the registration. This is required by law.
- Provide a Safety Standards Certificate to verify the vehicle is fit
Cautions for The Seller
The seller must be aware the vehicle will remain in their name until the transfer has taken place. The vehicle transfer is done through ServiceOntario. A seller is responsible for the vehicle until the transfer has taken place. This means if there is a fraction involving the vehicle before the transfer, the seller is responsible. It is recommended that the seller follow up with the buyer for transfer confirmation. It is an offense under the Highway Traffic Act if the transfer has not taken place within 60 days. As a seller, you must give full disclosure of the use and condition of the vehicle. Any fact disclosed that the buyer discovers it is not true may entitle the buyer to return the vehicle.
When purchasing a vehicle privately, you are not protected. It is the buyer’s responsibility to:
- Ask many pertinent questions about the vehicle
- Ask the seller for ID and ensure they match the Ownership
- Take the vehicle for a thorough test drive
- Purchase and review Carfax vehicle history reports
- Carefully read the Used Vehicle Package
- Check for liens against the vehicle
- Have the vehicle checked over by a reliable mechanic before purchase
- Obtain a receipt that includes the selling price and the seller’s information
Cautions for the Buyer
The saying goes, buyer beware. Before you make this expensive purchase, make sure you get all the facts. If the deal sounds too good to be true, it probably is. Always get the vehicle inspected by a reputable mechanic. If there are issues with the vehicle, it could be a bargaining tool with the sale price.
Purchasing a Used Vehicle From a Dealership
There are also specific steps to take when buying a used vehicle from a dealership.
Ontario Motor Vehicle Industry Council
The OMVIC mandate is to maintain a safe, fair, and informed marketplace. This is done by protecting the rights of consumers. This creates an honest and open competitive market for registered motor vehicle dealers.
Motor Vehicle Dealers Act and the Consumer Protection Act
The Motor Vehicle Dealers Act and Consumer Protection Act protect consumers when purchasing from an OMVIC-Registered Dealer. However, they do not protect a consumer from the private sale of a vehicle. Dealers and Salespeople are bound by law to disclose 22 requirements. The disclosure must include the history, condition, and past use of the vehicle.
Mandatory disclosures are as follows:
- The make, model, trim level, and year of the vehicle
- Past use of the vehicle
- Whether or not the vehicle was leased or rented and not owned by someone other than the dealer
- Any collision or incident damage exceeding $3000 and the total amount of damage if known by the dealer
- Whether or not the vehicle was written off by an insurance company
- Whether the vehicle has had 2 or more non-bumper parallel panels replaced
- If the manufacturer’s warranty has been canceled
- Has been any fire damage sustained by the vehicle
- If there has been any water damage caused by immersion that has gone to the level of the interior floorboards.
- Any structural damage or changes to the structure of the vehicle
- If the vehicle has an anti-lock braking system that does not work
- It must be disclosed if any of the vehicle’s airbags are not operational or missing
- If the vehicle requires repairs to the engine, transmission or powertrain, subframe or suspension, computer equipment, electrical system, fuel system, or air conditioning
- The total distance drove
- It must be reported if the odometer is not operational, replaced, rolled back, or is in miles
- If the vehicle is materially different from its original specifications.
- Anything on the vehicle relates to a different vehicle model
- If the vehicle was previously registered in another jurisdiction, other than Ontario and a statement of what other jurisdictions it was registered in
- The vehicle was previously stolen and then recovered
- A statement of any other pertinent facts that could expect to influence the decision of a buyer
All of the above information must be included by written statements in the vehicle Purchase contract.
Purchasing a Vehicle Privately VS Dealership
The fact that purchasing a vehicle privately may be the cheaper route to go may not be the best route. You have no legal protection. Purchasing through a dealership not only provides protection, but warranties are available. There are no warranties when purchasing privately. Dealerships are required by law to disclose everything relating to the vehicle. Private Sellers are not bound by the same requirements. When purchasing privately, you are always taking a chance. If you are going to purchase privately, it’s best to know the seller personally. Buying from family or friends is a safer bet.