Thursday, September 2, 2010

How to sell a used car in Ontario

I recently sold my car privately. I thought I'd write about the process to help others, or to help myself if I need to refer back some day. The government has lots of info on the process, but sometimes a real person's experience is still useful.

Background:

  • I live in Ontario, so this is all Ontario-centric
  • I had no liens against the car
  • The car was in excellent condition (not a salvage or rebuild)

The steps I took to sell the car:

  1. Got the UVIP from the Government
  2. Cleared up lien issue
  3. Made a "brochure" page with detailed info about the car
  4. Posted ads
  5. Received responses; found a buyer
  6. Preparation for final sale
  7. Completed sale

UVIP

The UVIP is an official document showing that you own the car, and whether there are liens against the car. It also provides a "bill of sale" page that you fill out to complete the sale. The UVIP took about five days to arrive, but they say to allow two weeks. I ordered mine online, but you can also walk into a ServiceOntario location. It's $20.

One piece of info that the UVIP mentions is the "brand" (not to be confused with "make", e.g. Toyota) of the car. My buyer asked what that meant, so you may want to familiarize yourself with it. In short, it says whether the car was ever severely damaged and then rebuilt. If your "brand" is something other than "None", you probably need to be very aware of it. Details here.

Liens

I initially had a car loan, but it was paid off some time ago. The UVIP, however, still showed that GMAC had a lien against my car! I was surprised about this. I called up GMAC and got them to issue a letter stating that they had no further interest in the car, and they did that. I think this is a common practice. It may be (speculation) that they don't bother clearing the lien when you're done paying. Anyway, keep this in mind since it added another week of waiting around for documentation.

Brochure Page

Because I am a nerd, I made a simple Google Sites page listing all the details I could think of about the car, a bunch of pictures, the price, and how to contact me. I sent this to all interested buyers, and on Facebook, etc. This is obviously an optional part of the process, but it may help market the car, and should at least save you typing up answers to the same questions each time someone contacts you.

Posting Ads

I posted ads on two services: Kijiji and Auto Trader (trader.ca). Both are free, but Kijiji is the far superior experience, in my opinion. I got way more "leads" from Auto Trader, but at least 50% of them were scammers. I eventually sold the car through Kijiji.

AutoTrader side-rant

AutoTrader is frustrating. Your ad is only up for seven days or so before it silently expires. Eventually, someone from a call centre phones you up to try to upsell you to the AutoTrader print version. They wanted something like $140 to put my ad in the print version! I politely declined. In their defense, you can re-post your ad online over and over again for free, suffering only the inconvenience.

The biggest frustration was that each time I posted my ad it was rejected at least once before finally being admitted. The first time I tried it was my fault: I tried to put a link in the ad, which they don't allow. Subsequent attempts to post it were rejected stating it was a dealer ad. I couldn't figure this out at first, but eventually I realized what it was: I mentioned the name of the dealership where I bought the car years earlier. I don't know if they are just scanning for keywords, but it was pretty clear I wasn't a dealer. Each time you have to explain why your ad is legit there is a two to eight hour turnaround time via email. Just a clunky experience, but necessary to endure because they attract a lot of potential buyers due to their brand.

Ad Responses

At least 50% of ad responses I got via email (especially from the Auto Trader ad) were scams. The common one is: "I'd like to buy your car, but I can't come see it for [insert lame/amusing/creative reason]. I will pay you via PayPal and my 'courier' will come pick it up." It's usually easy to spot these scams, but here are some common things I noticed in scammer responses:

  • no phone number
  • phone number with international area code
  • generic text in emails like "I'd like to buy your item"
  • suspicious name that sounds auto-generated: "Kelvin Eric", "Alex Matt"

If it's a real buyer, they'll talk to you on the phone and come see the car in person. Anything else is highly suspicious. I found a legitimate buyer after about six weeks.

Preparing for Sale

After the buyer and I agreed on a price, he asked me if I would get the car e-tested and certified (safety certified). This had not crossed my mind before since the car was only four years old, and with very few kilometers on it. It's not required that the seller do these things, but it's certainly a sign of good faith, so I was game. I got the e-test done at Oil Changers ($40), and a local mechanic in Kitchener did the safety inspection ($90). For finding a mechanic to do the inspection, just make sure they are an official "Motor Vehicle Inspection Station," recognized by the government.

You could get the e-test and safety inspection done before finding a buyer, but both expire. The e-test is good for 12 months, so that's not a problem, but the safety inspection is only valid for 36 days, so keep that in mind.

Completing the Sale

The biggest question I had during this process was how I'd accept payment for the car in a safe way. I wasn't selling a beater, so it was a large sum of money to change hands. Cashier cheques and bank drafts are often faked, personal cheques are out of the question, and accepting that much in cash might be the most suspicious of all! I came across this that suggested going with the buyer to his or her bank and getting the bank draft right then and there. Seemed nearly foolproof, so this is what I did. After meeting my buyer I felt I could trust him, so I felt like a bit of a jerk for making him jump through this hoop. I just wasn't willing to accept any risk on the transfer of this much money. On the day of the actual sale we took a trip over to a nearby branch of his bank, went up to the teller together, and they issued me the draft (and gave him a receipt that showed the draft was issued).

Interestingly, when I first suggested this as a way to do the payment, my buyer got a bit nervous. Never having heard of this before, he thought I might be trying to pull something on him! I didn't expect that kind of reaction. I explained my motivation, and sent him the About.com link (above) and he was ok with it. If I was doing it all over I might advertise up front that I require buyers to pay this way.

Payment in hand, there were a few things left to do:

  • Fill out the vehicle transfer bit on my vehicle permit
  • Give the vehicle transfer bit of the permit to the buyer, keep the "plate portion" for myself
  • Fill out the bill of sale in the UVIP
  • Take the plates off my car (yes, the buyer drives away with no plates; he has 6 days to get some put on)
  • Hand over the car and keys
The process was a bit stressful at times, but I ultimately got the price I was looking for, so it was worth it.

53 comments:

  1. This helped me A LOT! Thank you so much for posting your personal experience!

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  2. In the process of selling my first car and your first hand experience is really helpful.

    Thanks for sharing

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  3. @Samantha - No problem. Glad you got some value from it. Good luck with the sale.

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  4. Thanks for your story.

    I'm going to be selling my car soon but the thing is I have a lien on it -- a significant amount. I owe roughly 18k and plan to sell it for 16k. The thing is, I can't afford to pay off the lien until I receive the money from the buyer and i'll eat the 2000. Do you have any idea how this process works? Does the buyer pay the bank where the lien is held and then do I pay the difference?

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  5. @dfacc2a2-9ece-11e0-8357-000bcdca4d7a That is a good question, and unfortunately I don't know the answer. You could try stopping in at a ServiceOntario (I'm assuming you're in Ontario) location and ask them, or try calling up the bank where the lein is and see if they can give you some advice. Best of luck!

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  6. I am just about to sell my car and found this posting to be a great help. Thanks for taking the time to share this Mark

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  7. @adrian No problem. Glad you found it useful.

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  8. I am not confident at all to bring strangers in my house so i sold my car to a licensed wholesaler as is condition, they payed wholesale price for it but i was happy everything was smooth, http://sellmycar.ca for reference, F.J, Richmond Hill

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    1. I stumbled upon this blog a few days ago, looking for similar info. No-one responded to FJ's suggestion to use sellmycar.ca, so I thought I'd register to let others know they are legit, and offer good service.

      I was in a hurry to sell, so I asked them for a quote. They got back to me the next day, and some 3-4 hours after I accepted their offer, they picked up my car and handed me a certified cheque. Couldn't have been easier. No UVIP, ... required, immediate as-is sale.

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    2. @Teo Lar Did you have an outstanding loan on your vehicle or do you know if that would be an issue when selling through sellmycar.ca?

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  9. Thanks for this great article Mark. We just sold my Wife's car and this was very helpful!

    I completely agree with you about the spamming from adds on AutoTrader.ca. I received several odd replies after posting on AutoTrader.ca.

    Kijiji was much easier to upload to, edit, track, etc. I prefered Kijiji to AutoTrader.ca during my selling process.

    Cheers,
    Nadim

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  10. @njamal Glad the article was helpful for you. Congrats on selling the car.

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  11. Mark. The article you wrote was very helpful! Thank you. One question: Is it the seller's obligation to collect on the tax (HST) or this this something the buyer takes care of (separately) based on the sale price for the vehicle?

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  12. @Gheekee - I believe it's up to the buyer to pay the HST. I think they have to do this at the time that they register the car with the ministry. Not 100% sure, but I can tell you that I didn't collect the HST when I sold my car.

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  13. Are you sure it's okay for the buyer to drive away with no plates?
    I am selling my camry and It has no plates on it as i transferred the plate numbers to a different vehicle i downgraded to, a prospective buyer wants to have his mechanic look at it but he cannot get a temp as i need to transfer the car into his name and he can get away with the car as being his without paying. What do I do?

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  14. I am selling the car as is but I am also throwing in safety and emission plus a used car package and car fax but that doesnt seem to set his mind at ease and insists tony graham pick and pull at it...

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  15. As an interested reader I would tell him to bring his mechanic to the car, not your car to the mechanic, otherwise forget it. This person does not have the right to drive away with your vehicle until it is paid for and the ownership has been signed off. As far as you know he could take it home and exchange parts off of it with a vehicle he already owns. Once it is paid for and you sign the ownership and give him the bill of sale (which should include the date of sale and also the V.I.N.), you are relieved of all responsibilities concerning that vehicle, even if the buyer does not transfer the ownership right away. You can, however, go to a licensing office and have the vehicle registered as sold at no expense to you. Does anybody know how to find the value of a vehicle? I'd like to sell a truck, and have no idea what it is worth!!

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  16. @Rich Thanks for you input on the mechanic situation above. Good advice, I think. As for finding the value of your truck, what I did with my car was look for comparables on autotrader.ca, ebay motors, kijiji, etc. I also took my car to a dealer and asked what they'd buy it for to get a low-end estimate. Looks like http://www.canadianblackbook.com has a free service to tell you your car's value. Just tried it and it seemed reasonable for my current car.

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  17. Thanks for the blog. Just listed my car for sale today. Was wondering - once I do sell, can I take the plates to a Service Ontario site or do I need to call to the Motor vehicles place?
    I didn't mind spending the $20 on the UVIP. Was glad to have the instructions!
    My car was originally purchased in the US, am curious to see if the fact that the odomoter/speedomenter is in miles/mph will affect the sale (the kms are also on the speedometer in a smaller font).

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  18. @gd For the plates: I just kept mine since I was getting another car. If you're not getting another car, then according to http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml you can just take them back to any "Driver and Vehicle Licensing Office". I think this means any Service Ontario site that does license renewals/photos/etc.

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  19. Love this! So helpful! (A little freaked to think it might take 6 weeks - I was thinking 6 days, ah well). Your comments about payment never crossed my mind (and I'm a banker!).

    Thanks again, here's hoping all goes well!

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  20. @Elaine The car I was selling was a bit of a speciality item, and I was pushing for top dollar. I imagine a more common, more practical car would sell a lot faster. Best of luck!

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  21. Hi Mark, I have sold my lexus which is on Parking Insurance for the last 6 months, since I left Canada. I have asked my friends to return / cancel the number plates. Can pls advice on what needs to be done to do that. Thanks in Advance

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  22. Mark, thanks for this very helpful post.
    Going to give http://sellmycar.ca a try to see if their quotes are any good. Thanks, FJ and Teo for sharing.

    Also thought I'd share a site that I've been using to determine car values: http://www.vmrcanada.com. Personally, I found it to be easier to use than www.canadianblackbook.com.

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  23. Hi. i'm a private seller. Recently i sold my car to a private individual and he's come back to me on the 5th day, claiming that i was not honest with him and hadn't told him about a major issue. He bought the car as is and had refused certification. It was a cash deal.
    now my question is: is there a law regarding this issue as he wants to take me to court.
    Thank you for your ASAP response. please.
    thanks.

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  24. @salima That's an unfortunate situation. I am not a lawyer, but it sounds like "caveat emptor" to me. I'd seek professional opinion. Best of luck.

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  25. Hi Mark,

    Thanks for your input. This will greatly help me in selling my used car. I was wondering if you sell a car "as is", does safety, certification and e-test need to be provided? and does the Bill of Sale provided in the UVIP have the term that the sale was made "as is." As for legal reasons, it would be an important term to use. Also, if this term is not on the Bill of Sale in the UVIP, can we type up a personal Bill of Sale and use that instead?

    and lastly, did you make a photocopy of your bill of sale and provide the original to the customer?

    Thanks in advance!

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    1. @AlexT - Sorry for a very late reply. I don't actually recall the details of the bill of sale. Sorry! Best of luck.

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  26. Hi Alex T,
    There's some information I gathered at the end of my site (my car is for sale in there but please disregard) http://armenzg.com.

    eTest and certification is needed for the buyer to provide before he can register with the ministry.
    "as is" is generally valid as long as you were honest. I read (I don't know where) that "as is" is used too often these days but it requires you to be honest on what changes or accidents the car might have had and you were aware of it.

    I hope this helps.

    Thanks Mark lots since I was going to document the same things but I'm glad you took care of it already (I wish I had found your post in advance). I wish professional writers out there made things as properly summarized as you did. Kudos.

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    1. @Armen - Thanks for the kind words, and glad the write-up was useful to you.

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    2. This first-person account is very useful. One question: Did you add HST to the price, or did you pay it out of the price you received?

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    3. If I recall, you do not add the HST to the price. The buyer pays the HST at the Ministry of Transportation when they register the car (i.e. after the sale is done). More info: http://www.fin.gov.on.ca/en/guides/rst/209.html

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  27. Hi Mark. Thanks for starting this discussion. It's one of the few places with clear information regarding this process. Here's my question (or possible dilemma). I am from Alberta, and would like to purchase a car from a private seller in Ontario. I've done the due diligence on the car, but the tax situation is mystifying. My understanding is that private sales across Canada are not subject to GST, but the HST is the question. My understanding is that if I buy the car and drive it back, as a resident of Alberta I would not pay any provincial sales tax. If it was a dealer, I would be require to pay GST, and I think I would have to apply for a rebate on the balance of the HST. Can you or anyone reading this suggest a place where I can find out the rules about non-resident purchases of cars in Ontario? Many thanks to anyone who can help with this.



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    1. @AltaGD Good question, and I have no idea what the answer is. I would go to the equivalent of a "Services Ontario" location ("Alberta Registries" or whatever you go to register a car) and ask them what would happen if you showed up trying to register a car you bought in Ontario. I think short of that it's all speculation.

      Also I'm not sure about driving cross country in a car with no license plates. Might be something else to ask about.

      Best of luck!

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  28. Thanks. This is very useful, Mark. I'm trying to sell a car too and am uncertain about one aspect - test drives.

    A dealership would copy my licence and insurance before letting me take a test drive (accompanied by the salesperson, of course).

    This is the awkward part of a test drive in a private sale. How do I ensure that the person driving is licenced, has insurance and, by extension, will be liable for any damage or violations while driving my car (with me accompanying)?

    Suggestions?

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  29. @caterisparibus In my case I went with the buyer on the test drive. This may have been stupid on my part (especially in light of the tragedy of http://inmemoryoftimbosma.ca/), but it was just a judgement call on my part. You could potentially mitigate this by bringing a friend on the test drive. Make sure you outnumber the buyer(s)?

    For license and insurance: get them to show you their license, make sure it's valid. If you have a scanner, scan a copy perhaps, or take a picture of it with a digital camera/phone, though this seems less important if you're going with them on the drive.

    Insurance: check with your insurance company, but I think YOUR insurance covers the car, regardless of who is driving, as long as the driver has a license.

    Worth noting: I'm not an expert on this, I just wrote a blog post that ranks well in Google :) Best of luck.

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  30. I have the same dilemma as caterisparibus regarding test drives, given the Tim Bosma case. Really scared about that. Taking a friend along might not work if you don't have any one nearby. I just submitted my vehicle details on sellmycar.ca, lets see what value they come up with. The value the dealer was giving for trading in my 1998 Accord was peanuts, hence did not proceed with buying a new car with them and instead trying to first sell my current car on my own.

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  31. Now I just need to find a page that has the opposite side of the story; How to buy a used car.
    This is a very informative and well pit-together article and basically saved me hours of frustration! Thank you!

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  32. Mark, your blog is definitely informative and helpful for both private sellers and buyers of used cars. The concerns and fears that everyone expressed in the forum are real and valid. There is actually a business, called SafeSellBuy, in Richmond Hill that recognizes these concerns of private buyers and sellers that their services are to support buyers and sellers to ensure they have a safe experience both personally and financially during the buying or selling process. Private buyers and sellers can now have the ease and peace of mind they want whether they are buying or selling a used car online or offline.
    Check it out: www.safesellbuy.com

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  33. Also, to make it super convenient, SafeSellBuy is in the same plaza as the MTO office. They take all payment types (except CASH), including major credit and debit cards. No chance of scam using their system.

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  34. Has anyone tried the place Rachel posted.I'm always suspicious with those type of posts.

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    1. @Bill The comments appear to be a sales pitch. They weren't the usual obvious spam, so I let them stand. Some digging turns up that a "Rachel Krueger" is the co-founder of SafeSellBuy (according to http://onrichmondhill.com/safesellbuy2). Assuming the Rachel who commented is this same person it would have been nice if she'd disclosed her vested interest in SafeSellBuy. Caveat emptor as always.

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    2. It's true... I am the Rachel Krueger, co-founder of SafeSellBuy in Richmond Hill. When I came across this blog from Mark, I read the comments and resonated with the concerns and fears that different bloggers expressed. These were the very concerns that my business partner experienced when he contemplated on selling his Jeep, and they were the very reasons why we decided to create SafeSellBuy to promote community safety to a group of people (private car buyers and sellers) who have minimal protection under the consumer act. To be honest, I'm not very techkie and wasn't sure how blogging work so "tried" to stay anonymous:) Thank you for the opportunity to share SafeSellBuy services with you and hope we can make a difference to enhance the lives of many around us.
      Mark, I love your thoughtfulness to create this blog to help others. You've done an awesome job sharing your step by step experience as a private seller and giving great tips to ease the process.

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    3. Thanks, Rachel. Best of luck with SafeSellBuy.

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  35. Mark, do you have to pay any taxes on a private sell?

    Eugene

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    1. Yes. http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#retail. I believe the buyer pays them at a ServiceOntario location when registering the car.

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  36. I wish I had known about the 6 days grace driving without plates. I recently sold my wife’s car “as is, where is” and the final buyer gave me one third the purchase in cash promising the rest after he had the car certified and licensed. I was lucky and he was honest and he paid in full four days later and returned our plates but I was very nervous for those four days. Is that grace period documented on a web site somewhere?

    As far as test driving the vehicle I allowed all potential buyers to take it out without me but only after I had their driver’s license and a major credit card in hand. Of 15 to 20 potential buyers only one refused to hand over either item so I refused him a test. Nobody liked the credit card portion of that but when I explained they were being given a major, easily stolen item I just wanted them to share the risk they grumbled but complied.

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    1. Hey Rob. Is it a 6 day grace period to drive without plates, or a 6 day grace period to get the new car registered? I think it's the latter (https://www.ontario.ca/driving-and-roads/buy-or-sell-used-vehicle-ontario) which doesn't imply you can legally drive without plates. I'm unsure though.

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  37. Mark isnt it illegal to drive a vehicle without plates or insurance?? Wouldnt I get stopped by police several times if people reported a vehicle without plates?? I was looking at a truck and I was going to consider using CAA to tow it to my house.

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    1. Hi Chris. I really don't know. When I sold my car (years ago) the buyer drove off without plates. Insurance is a good question too.

      I would do the following BEFORE you buy:

      - go to a ServiceOntario centre and ask them what to do about plates when you buy a used car
      - call your insurance company and ask them what to do
      - come back here and let us know the result :)

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