Do You Need Proof of Insurance to Sell a Car in Ontario?

It is not uncommon for people to get confused about vehicle insurance in Canada. This is because it varies among the different provinces. Plus, it is also known to be the most expensive insurance to buy. It varies across the provinces as well. There are a lot of individuals that want to sell their vehicle. But don’t know how this is going to impact the insurance. Some ask if they need to have some type of proof that they have insurance to be able to sell a car.

Selling The Vehicle

selling

There are certain regulations that will take place for selling the vehicle. Keep in mind insurance applies to the driver and is not sold with the vehicle. There is no need for proof of insurance to sell the car. What does need transferring is the vehicle ownership. To do this, there is a specific amount of information that needs providing.

Proof of Ownership

The owner transfer takes place through the government. They will issue a green slip as proof of ownership. It will contain a specific amount of information. It has to have the identification number of the vehicle on it this which is the VIN. Also, it will have the name and address of the new car owner. It will also have the license plate number. There will be another section which is the validation sticker for the license plate. It gets applied to the licence plate. The make and model of the car are also needed. It is the new owner of the vehicle that is going to be responsible for the insurance.

Insurance

As the past owner of the vehicle and being a driver, you should have had insurance. Once you transfer ownership, then it is up to you to make sure that your vehicle insurance gets cancelled. Do it at the moment of transfer of ownership. Then you no longer have any responsibility for this vehicle. But at the same time, the new driver now has the insurance responsibility. You want to make sure that your insurance is no longer connected to this vehicle

You’re Selling Responsibilities

Aside from the issue of insurance as a seller of a vehicle, you do have responsibilities. At least this is so if you are selling a vehicle in Ontario. You may be selling in another Province.  You have the responsibility of checking to see what the rules are for selling a vehicle there.

Information Package

Ontario has increased their laws for individuals selling vehicles. They have to provide a vehicle information package to the buyer.

The vehicle information package is quite extensive. It contains a lot of the information that is needed for the vehicle registration. In addition to this, you have to have a good description of the vehicle. It should include the model the colour and the body type. You also have to determine the status of the vehicle as well is its brand. Identify the body type as well as the cylinders.

You will also have to add Extra information such as;

  • The registration history as an Ontario vehicle. Information is taken from the odometer.
  • You have to declare if there are any liens or debts on the vehicle.
  • If possible, you should be able to provide both the wholesale and retail value of a vehicle. That is of the same year and model. You have to know what the retail sack sales tax obligations are.
  • The package has to include a Bill of sale
  • If you have any information about the safety standards inspections these need including.

Buyer Protection

buyer protection

The vehicle information package is for the protection of the buyer. It has happened on occasion where a buyer has gone to register the vehicle to find it that it is suspended. This means that the buyer was not able to get a permit for a new vehicle.

The vehicle is unfit. There are vehicles registered with the ministry as being unfit. Meaning that they are not mechanically safe. In this case, a safety standard certificate will have to be given to the ministry. It needs doing before license plates are issued to the new buyer.

Destroyed Vehicles

Sometimes a vehicle has been completely disassembled or classed as crashed. If so, it gets a wrecked status at the ministry. If an individual buys a vehicle with this status, they will not be able to get license plates. The driver cannot drive it on a public road.

What is Compulsory?

The buyer’s package is something that is provided by the seller it is compulsory. These packages are bought either on line or through the ministry. The onus is then on the seller to show it to anyone that is interested in buying the vehicle. They need to do this before they go through with the sale. Once an individual does go through with the sale, the package is given to the buyer. Potential problems

Ownership

These issues can arise where the buyer can not properly register the vehicle and get their license plates. The ownership of the vehicle remains in the seller’s hands. This is where the insurance can now be an issue. There is no way that that the buyer can drive the vehicle if they have removed the insurance. For this reason, the buyer should go with the seller to do the transfer. Or ensure that they follow up with the buyer. To make sure that the registration is completed. The seller should get proof of the vehicle transfer either from the buyer or the Ministry.

Repercussions

license plate

In the past regulations were not as strict. There are still many that sell vehicles without going through the proper procedure. But, it is important that they realize that this is not legal. There can be some repercussions where the buyer can come back on the seller because of this. Cancellation of the insurance should not take place until the seller is sure that the vehicle has been properly transferred.

Keep in mind that the seller must remove their license plates from the vehicle. It is because in Ontario the registration system for vehicles has a plate match up to the owner. It means that the plates for a vehicle belong to the owner and not the vehicle.