Buying a used car is a big financial decision, it is important to understand the safest and most compliant steps to buying a used car. This article provides the complete step by step process on how to buy a used car in a private sale transaction.
1 | Locate Your Ideal Car
Use Kijiji or Autotrader, locating the car you want at the price you are looking for is now easier than ever.
2 | Assess Cosmetic and Mechanical Condition
The most important step to a quality car, and the reason for our free comprehensive car inspection checklist, is to get all the information you can possibly gather about the true state of the vehicle. A mechanical inspection, background check, UVIP analysis and test drive should be completed prior to purchase.
3 | Purchasing The Car and Transferring Ownership
There are two documents that need to be filled out. The bill of sale included in the Used Vehicle Information Package (UVIP) and the vehicle ownership. Note that legal ownership and title to the car changes when the vehicle ownership is signed.
While it is not a necessity, for your own safety, it is suggested to pay the seller and sign the paperwork at a bank. Completing the transaction at a financial institution with witnesses decreases the likelihood that you are robbed or left with a seller unwilling to complete the paperwork. Many car sellers already insist at completing the transaction at the bank so they are able to verify the authenticity of your payment.
For the most hassle-free transaction, ensure the car has a safety and emissions certificate prior to completing the transaction.
4 | Set Up Car Insurance
With ownership comes liability, call to activate your insurance immediately. Additionally, to register the car with the Ministry of Transportation (MTO), you must have insurance on the vehicle.
5 | Get the Car Safety and Emissions Test
The Safety and Emissions is required to register your vehicle with the Ministry of Transportation Ontario (MTO). We recommend that you request the seller to complete the safety and emissions test if possible.
If you can’t purchase the car with the safety and emission cert this part can get complicated because you need to get your vehicle to a garage, without having plates on the car. However, you are not legally allowed to drive the vehicle without plates nor can you have the incorrect plates on the car.
There are four solutions to this problem:
- Move the car with a dealer plate.
- Tow the car back and forth.
- Get a temporary plate from the MTO.
- Request a safety prior to purchase and ownership transfer.
The correct process to do this is unfortunately cumbersome, but to do it any other method is to incur significant risk.
6. MTO Registration and Tax Payment
Once you register your car with the MTO and pay the tax on the vehicle, you will recieve new plates and a brand new ownership. The MTO requires you to register your car with them within 6 days after your purchase.
For a complete guide, please read our definitive guide on purchasing used cars.