Automotive

Questions about the logistics and possible scenarios when buying / selling a car between friends

  • Last Updated:
  • Jan 16th, 2020 6:11 pm
Deal Expert
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Apr 21, 2004
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Questions about the logistics and possible scenarios when buying / selling a car between friends

My nephew and sister will be returning to Ontario in June to live here for good and there's a friend who will leaving Canada (before mid-February) shortly who's selling a car they are interested in.

It seems that my sister/nephew will have to get auto insurance before they can register the vehicle and take possession.

Can the following be future-date so that the seller gets her cash, parks the car on my driveway (not to be driven) and takes off her auto insurance coverage while we wait for sister/nephew to arrive in a few months' time?
  • bill of sale,
  • vehicle permit with the application to transfer,
  • Safety Standards Certificate
also any recommended shops in the GTA to do the SSC who will not overstate potential repairs since the 2012 MY car being sold is in pristine condition? They just want the bare minimum safety inspection because the car is dealership serviced and there is no issues with it at all.

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Hmmm, it seems I can put the car under my name first and then transfer to my sister when she arrives but can I do so while limiting any impact on my insurance premiums? I won't be driving the car at all.
https://www.fin.gov.on.ca/en/tax/rst/sp ... icles.html

Gifts between family members
A specified vehicle may be transferred exempt from RST to a person from a member of his or her family provided no consideration was given in respect of the vehicle.

A family member means a father, mother, spouse (which includes a common law spouse), brother, sister, grandfather, grandmother, son, daughter, grandson, granddaughter, son‑in‑law, daughter‑in‑law,

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Can the car be registered only under my sister's name or does her son have to be on the car registration too if both of them will be driving?

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Is there a way to find out ahead of time the blackbook value at which HST will be calculated in case the transaction price will be at a very low amount (way below the Autotrader.ca cash offer)? I've read once on RFD that the blackbook value of a car being sold was not established and so he was free to use a very low transaction price.


https://loanscanada.ca/auto/how-to-priv ... n-ontario/

Get an Insurance
You will need to, of course, get insurance for the vehicle before picking it up as well.

Register and Take Possession of the Vehicle
Once you have the insurance and the money for the car, you can set up a meeting time and place to make the exchange. In addition to transferring the registration, there are a few things/documents you need to have. You will need a bill of sale, vehicle permit with the application to transfer, and the Safety Standards Certificate. Once you have all the necessary documents and the car, you can register it to your name and take possession.



Many, many thanks.
5 replies
Banned
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Mar 7, 2007
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Sure, you can do it either way, but here are some points to consider.

Safety Standards Certificate is good for 36 days, then it expires. Sure, it is good to get it now, but you will have to get it again if the car is parked for a few months.

My best certification story - at the Toyota dealer. They never tried to over sell anything.

If you park the car on your driveway (not to be driven), there's a very, very small risk of someone stealing it (or damaging it). Would it be covered under your house insurance?

If the car has a safety certificate, you could register it to your name now (it will need insurance, you could add it to your existing insurance policy, and you will need to pay for new plates in all likelihood), but then you need to cancel the insurance asap, so you do not overspend, But I do not see any particular advantage to put it to your name now.

You could also register to your name as "unfit", but I don't see advantages to that either.
______________________________
Deal Fanatic
Jun 26, 2007
5977 posts
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???
You don’t need to buy liability insurance for a parked car.

I would suggest you get the vehicle privately appraised and they will write whatever price you want and that’s the price you’ll have to pay for taxes when you transfer the car from the friend to you. You can give your friend more than the appraised price but that appraised price is used strictly for tax purposes when you register the vehicle at service Ontario.

You can transfer ownerships without insurance as long as you let the counter staff know that the vehicle is not being driven and you do not need plates for it. They will simply give you only the ownership portion. AFAIK you also do not need to do a safety for a non driven vehicle, not plated vehicle. I would double check this though as I haven’t done this sort of transfer in a while.

When your sister arrives you need to get the family gift letter signed by a commissioner of oaths, look on the internet for someone that can, I paid $15 for my last one. You can also get it signed at service Ontario locations but specific ones. Both gifter and receiver must be present at signing and do not sign the form before hand, it has to be signed in front of the commissioner.

You can put fire and theft on the vehicle if you choose to. It’s like $300/year at most.
Deal Fanatic
Jun 26, 2007
5977 posts
1468 upvotes
???
Only one driver needs to be on the registered ownership, usually the primary driver but even if they aren’t that’s ok. However whoever is listed must be on the insurance policy as well.

Your sisters son can be listed as a secondary driver on the insurance policy, and it is mandatory if they reside at the same address, have a license and have no independent insurance policy of their own (meaning their own car and insurance).
Deal Expert
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Apr 21, 2004
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If I purchase and then transfer to my sister (HST exemption and non-arm length transaction), do we have to the safety just once or twice? Thank you.
Deal Addict
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May 18, 2002
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Brampton
Heres my thoughts:
Have the owner sign the vehicle permit.
Park the car in your driveway.
When relatives arrive, they get insurance and a temp permit.
Drive to get safety.
Drive to Ministry and pay tax to register.
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