The Complete Guide to Used Vehicle Bill of Sale in Ontario

Imagine selling your vehicle only to receive a ticket for a violation you haven’t committed, months after the sale. Or, imagine buying a car, only to find out it has been stolen. These scenarios aren’t just hypothetical; they happen to people every day, and far more often than you might think. 

To prevent this from happening, to protect your rights as the buyer or the seller of a used vehicle, and to formalize the sale through regulatory compliance, you shouldn’t just hand the keys to your car in exchange for cash; you should also fill out a used vehicle bill of sale. 

In this guide, we’ll go over what the bill of sale is, how to write one in Ontario, why you would need one, and what the benefits of formalizing your transaction are. 

What Is a Used Vehicle Bill of Sale?

A used vehicle bill of sale is a legal document that records the transfer of ownership of a vehicle from the seller to the buyer. Without a proper bill of sale, both buyers and sellers expose themselves to legal disputes, financial losses, and potential fraud. 

The document contains all the essential details associated with the vehicle you’re selling or buying, as well as the information about the buyer and the seller. This includes the make, model, and year of your vehicle, as well as the VIN and the odometer reading. It also contains the purchase price of the vehicle and the date of the transaction, as well as signatures of both parties.

A completed bill of sale gives the buyer proof that they are the sole owner of the motor vehicle listed in the document, and it frees the seller from any liability after the transaction has been concluded. 

How to Write a Used Vehicle Bill of Sale in Ontario

The bill of sale records the transfer of ownership, and it’s always a good idea to write a bill of sale form even if it’s not required by the state law in cases of private sales. If you’re buying a vehicle, you might need a bill of sale, as your local MTO might need to see proof of purchase. 

It’s important to remember that you should create a bill of sale even if the car is a gift to a family member. If the money did exchange hands, list the price in the bill of sale, as this determines sales tax. 

Start the bill by stating the seller’s and the buyer’s full names, their respective addresses, and their signatures. The names must match what’s on the vehicle permit. Next, provide all the key vehicle details associated with the used car, exactly as they appear on the proof of ownership document. This includes the following information: 

• Year, make, and model (for example, 2018 Toyota Corolla LE)
• Vehicle Identification Number (VIN)
• License plate number (if applicable)
• Current odometer reading (if available)
• Body type and vehicle condition
• Warranty information; In most cases, private party sales are “as is”, meaning no warranty is provided. If there is a separate agreement, include it in the bill of sale.
• Sale price (determines sales tax)
• Date of sale

If you’re unsure about creating a bill of sale, or simply don’t want to go through the hassle of creating one, you can easily download a bill of sale template online. 

Why You Need a Used Vehicle Bill of Sale in Ontario

There are several reasons why you need a used vehicle bill of sale in Ontario. First and foremost, Service Ontario requires a complete bill of sale as part of the transfer of ownership process. It’s one of the documents, along with the used vehicle information package (UVIP) and the vehicle ownership permit, that must be presented when registering the vehicle in the buyer’s name. 

The bill of sale also contains the sale price, which helps establish the sales tax. This price is used to calculate the Retail Sales Tax (RST), which is paid by the buyer when registering the vehicle, unless the transfer of ownership is a tax-exempt gift to a family member.

Lastly, the used vehicle bill of sale also states the date of sale and an “as-is” clause, and protects the seller from any liability after the sale has concluded. It also confirms that the purchase was legitimate and provides the buyer with the necessary documentation to register, insure, and plate the vehicle. 

Key Advantages of a Used Vehicle Bill of Sale

Besides enabling you to legally sell a car to a third person, the used car bill of sale also has several other key advantages: 

• Legal proof of transaction: A bill of sale is official evidence that a legal sale took place between the seller and the buyer. It contains all the necessary details, like the seller information, buyer information, purchase date, and price. 
• Clear ownership transfer: Once signed, the document clearly identifies the buyer as the new owner of a used motor vehicle. It also protects the seller from liability for future accidents or infractions. 
• Record of sale price and tax reference: The sale price recorded on the bill of sale is used by ServiceOntario to calculate RST on the transaction for tax, accounting, and legal purposes. 
• Protection for both parties: Including the “as is” clause protects the seller from the post-sale complaints, while the buyer benefits from a documented agreement that can be referenced in case of disputes or warranty discussions. 
• Requirement for vehicle registration: The bill of sale is required for vehicle registration. Without it, the buyer can’t register or plate the vehicle in their name. 
• Transparency and accountability: By listing all the necessary details associated with the vehicle, the bill of sale promotes honesty and transparency in private sales. 

Both buyer and seller retain copies of the bill of sale, which is important for potential insurance claims, resale, or proof of ownership history in the future.

How to Get a Free Used Vehicle Bill of Sale in Ontario

There are several ways you can get a used vehicle bill of sale for your particular transaction. You can get a copy from your local MoT office or on their website. Alternatively, you can write your own bill of sale using the instructions provided in our guide. 

You can also easily download the used vehicle bill of sale from our website.

Summary

A used vehicle bill of sale isn’t just paperwork. It’s proof of a fair, legal, and transparent transaction, regardless of whether you’re buying, selling, or gifting a vehicle in Ontario. It protects all the parties involved, ensures compliance with Service Ontario requirements, and safeguards you from future disputes. 

If your vehicle has reached the end of its life or isn’t worth the hassle of selling privately, visit ScrapCarPros’ website and get a free quote and instant cash offer for your unwanted vehicle, bill of sale included.