Vehicle Bill of Sale Ontario: Why It’s Important & How to Get One

Introduction

Buying or selling an old vehicle in Ontario can be exciting, but sometimes it comes with a risk. What if the buyer doesn’t register the car in their name? What if the seller fakes the vehicle’s condition? What if legal issues occur after the deal?

These troubles make it important to have an Ontario Used Vehicle Bill of Sale while transferring ownership of the car. Without this document, you may face legal issues, financial losses, or even conflicts with the other party.

A Bill of Sale Ontario is a legally binding document that records the transaction information between a buyer and seller. This document is a proof of ownership transfer and protects both parties from possible liabilities. This document becomes even more essential when selling an older or scrap car because ownership issues can complicate the process.

In this guide, you will learn everything about the Auto Bill of Sale in Ontario, why it is important, and how to create one in the right manner. No matter if you are selling a functional car or scrapping an old vehicle, getting a Bill of Sale for Car in Ontario is necessary. By following the correct steps, you can get a smooth, transparent, and legally sound transaction.

What Is a Vehicle Bill of Sale in Ontario?

A Vehicle Bill of Sale Ontario is a legal agreement between a buyer and seller that confirms the sale of a used vehicle. It includes fundamental information about the car, the seller, the buyer, and the terms of sale. This document helps avoid disputes by offering clear evidence of the transaction.

In Ontario, a Car Bill of Sale is not the same as a title transfer. It is an additional document that works as proof of the transaction. Although it’s not legally required to register the car, it is highly recommended for both parties’ protection. Without a Bill of Sale, you might face trouble during car ownership transfer. This can lead to issues if the car gets into an accident or receives traffic tickets after the sale.

All necessary details are recorded in a Bill of Sale. This reduces the chance of errors or missing information. So, it is always recommended to draft this document carefully and keep a copy for reference.

Also Read: A Complete Checklist of Documents You Need to Scrap Your Car in Canada

Why Having A Bill of Sale Important in Ontario?

A Bill of Sale is more than just an invoice, it’s your legal proof of a vehicle transaction. This document protects both buyers and sellers from potential disagreements in the future. It ensures smooth ownership transfer and helps prevent fraud and legal issues. Let’s learn the importance of Bill of Sale:

1. Legal Protection

A Bill of Sale Ontario gives you legal security by recording all the sale’s details. If any dispute happens in the future, you can use this document as proof. Without written proof of the transaction, it may be difficult to resolve conflicts between the buyer and seller. It can lead to financial losses or legal consequences.

2. Proof of Ownership Transfer

The Auto Bill of Sale Ontario confirms that the seller no longer owns the car. This protects the seller from being blamed for any traffic violations or accidents after the sale. If the buyer fails to register the vehicle in their name, the bill of sale serves as an additional layer of proof that the seller has fulfilled their obligations.

3. Financial Security

A Sample Bill of Sale Ontario works like a receipt for the buyer and protects them from fraud or false claims. It also ensures that the seller gets paid the agreed amount and prevents any false claims regarding the price or condition of the vehicle.

4. Essential for Used Car Sales

When selling a used vehicle, a used vehicle Bill of Sale for Car makes the process clear and official. It builds trust between the buyer and seller. Without this document, you might run into unnecessary complications, especially if you disagree with the sales terms later.

5. Simplifies Future Transactions

A well-written Car Bill of Sale Ontario ensures that the details of the transaction are clear and legally recognized. If the buyer wants to sell the car later, having this document can make future sales easier and help avoid any confusion regarding ownership history.

Also Read: How to Sell Your Junk Car: Key Tips for Avoiding Scams and Getting the Best Deal

What to Include in a Used Vehicle Bill of Sale in Ontario?

A Car Bill of Sale Ontario should include the following information:

• • Buyer and Seller Information: Full names, addresses, and contact details.
  • Vehicle Details: Make, model, year, VIN (Vehicle Identification Number), and mileage.
  • Sale Price: The agreed price and payment method.
  • Date of Sale: The exact date the transaction took place.
  • Signatures: Both parties must sign the document.
  • Conditions of Sale: Any terms agreed upon.
  • Odometer Disclosure: An accurate reading of the vehicle’s mileage at the time of sale.
  • Warranty Information: If the car is sold with a warranty, the details should be outlined clearly.

A Bill of Sale Template can help ensure you include all important details. It is advisable to review the document carefully and consult a legal expert to avoid any missing information issues.

How to Get a Bill of Sale in Ontario?

Getting a Bill of Sale in Ontario is an easy process, but you need to pay attention to the details. No matter, if you are buying or selling a car, including all necessary information will help you avoid future legal or financial issues.

1. Download a Bill of Sale Template

You can find a Bill of Sale template online or create your own. Make sure it includes all the necessary details. There are many templates available out there for different types of transactions, so choose one that works best for you.  

2. Fill Out the Necessary Information

Include accurate information about the car and both parties to avoid future arguments. If you leave any information, then it could cause legal issues.

3. Sign the Document

Both the buyer and seller need to sign the Vehicle Bill of Sale Ontario to make it official. Without signatures, the document is not legal.

4. Keep Copies

Both parties should keep a signed copy for their records. Having multiple copies ensures that the document is available whenever you need it.

Also Read: How to Sell Your Car: Key Tips for Avoiding Scams and Getting the Best Deal

Do You Need a Used Vehicle Information Package (UVIP)?

In Ontario, when selling an old vehicle, you must offer the buyer a Used Vehicle Information Package (UVIP). This package includes important details about the car, such as:

• • Vehicle history
  • Lien information
  • Registration history
  • Odometer readings

A UVIP is necessary when selling a used car privately in Ontario. The buyer cannot register the car without it.

How to Transfer Vehicle Ownership After a Bill of Sale?

Once the Bill of Sale is completed, the official process of transferring vehicle ownership officially starts. Both the seller and the buyer have specific responsibilities to make the transfer legal.

Steps for the Seller

1. Remove the License Plates: In Ontario, license plates are not transferred with the car. As a seller, you must remove the plates before handing over the vehicle keys to the buyer. You can keep the plates for another car or return them to the ServiceOntario center if they are no longer needed. 
2. Provide the Bill of Sale and UVIP: You need to give two important documents to the buyer, a Bill of Sale Ontario and a Used Vehicle Information Package (UVIP). The UVIP includes important details about the car’s history, lien status, and past owners.
3. Cancel Your Insurance: Once you have sold the car, call your insurance company and cancel the policy for that vehicle. This protects you from any incidents after the sale.
4. Notify ServiceOntario: While it’s not required, you can notify ServiceOntario that the car has been sold to avoid any liability issues.

Steps for the Buyer

1. Collect the Required Documents: The buyer must get a Bill of Sale Ontario and the UVIP from the seller. If the vehicle is older than 7 years, a Safety Standards Certificate (SSC) is required for registration.
2. Get Insurance Coverage: Before registering the car, the buyer must have valid auto insurance. Most insurance requires a copy of the Bill of Sale as proof of purchase.
3. Register the Vehicle at ServiceOntario: The buyer must visit a ServiceOntario center to complete the vehicle ownership transfer.

Here is the list of required documents:

• • Bill of Sale
  • UVIP
  • Safety standards certificate
  • Proof of insurance
  • Personal identification

4. Pay the Necessary Fees and Taxes:

• • Ontario charges 13% Harmonized Sales Tax (HST) on used car purchases unless exempt.
  • The buyer must pay registration fees and any overdue fines or fees associated with the vehicle.

Once all steps are completed, the buyer receives a new vehicle ownership permit.

Also Read: How Much Does a Safety Inspection Cost in Ontario?

Common Mistakes to Avoid When Creating a Bill of Sale

One must have a proper Bill of Sale to avoid any future issues after the vehicle transfer. Here are the most common mistakes that buyers and sellers should avoid:

• Missing Important Information

A Bill of Sale should include all details such as the vehicle’s VIN, make, model, year, and mileage. Buyer and seller names, addresses, and signatures must be mentioned. Any missing or inaccurate information can cause delays in transferring ownership at ServiceOntario.

• No Specification of Sales Terms

You must mention proper sales terms in the bill of sale. Mention whether the car is sold as-is or with a warranty. If the seller guarantees any repairs, list them in the Bill of Sale to avoid future issues. If the car has any existing issues, inform them in writing to protect both parties.

• Not Keeping Copies of The Bill

Both the buyer and seller should keep at least two copies of the Bill of Sale. Sellers should get a copy in case of any legal issues in the future. Buyers need a copy for registration and insurance objectives.

• Not Verifying Buyer/Seller Identity

Sellers should verify the buyer’s driving license to make sure the correct information is documented. Buyers should confirm the seller is the registered owner of the car to prevent fraud.

If you avoid these mistakes, then you can have a smoother vehicle sale and ownership transfer process. 

Conclusion

A Used Vehicle Bill of Sale Ontario is an important document when selling a car in Ontario. It’s not legally required, but it offers you security, proof of ownership transfer, and protection against legal issues. Make sure that the document includes proper details and is signed by both parties.

If you are looking to sell a scrap car in the GTA, Greenway Auto Recycling offers trouble-free scrap car removal services. We manage all the paperwork and follow the government codes. Contact us at (416) 783-9026 to get top cash for your scrap car and enjoy an excellent experience.

Frequently Asked Questions (FAQs)

Question 1.  Is a Bill of Sale Required for used car registration in Ontario?

No, but it is strongly recommended. ServiceOntario does not require a Bill of Sale for car registration, but it serves as a legal record of the sale and protects both seller and buyer from future legal issues. 

Question 2. Can I use a Handwritten Bill of Sale?

A handwritten bill of sale is not recommended. If presented for any legal work, this document may not look proper. Therefore, you must download a Bill of Sale template and use it. It’s very important to include all important information such as VIN, sale price, names, and signatures of both parties.

Question 3. Do I need a Bill of Sale for a gifted vehicle?

Yes. If a vehicle is given as a gift between family members, a Bill of Sale is still required along with a Sworn Statement for a Family Gift of a Used Vehicle form. 

Question 4. Can a Bill of Sale be canceled or withdrawn?

No. Once both parties have signed and the vehicle has been transferred, the sale is final. Any issues must be resolved legally afterward. 

Question 5. Does a Bill of Sale prove ownership?

No. ServiceOntario registration is the only official proof of ownership. The Bill of Sale is only a record of the transaction.