How to Transfer Vehicle Ownership in Ontario

*This article is updated from its original version published on May 17, 2021 

For most Ontarians, owning a car is a necessity that brings unmatched freedom, privacy, and convenience. Yet, as your life and needs change, you may find it’s time to move on from your current vehicle—whether that means upgrading to a modern model or gifting your old car to a family member. 

You can transfer car ownership to another owner in two ways: as a gift or as part of a sale. The process can be completed with anyone who has a valid driver’s licence and an active auto insurance policy. 

Most people, however, are unsure of how to transfer ownership of the vehicle when selling. Too often, the most critical piece of the puzzle is ignored: your vehicle ownership permit. Without this essential green slip of paper, a legal transfer of ownership simply cannot happen. 
 
Before we go any further, let’s understand vehicle ownership better. 

What is vehicle ownership?

Vehicle ownership is the green piece of paper that you probably have tucked away in your glove box. It’s a permit that proves vehicle ownership and is issued once the transfer process is complete. It includes details such as the license plate number, the VIN, the make and model of the car, and the owner’s name and address. 

Tyler Flemming, a licensed insurance advisor with Surex, says “ownership identifies the legal registered owner, and you cannot insure a vehicle you do not own.” 

When you transfer car ownership, the legal owner of the vehicle switches. In Ontario, each vehicle on the road is required to be registered to an owner; while many vehicles are registered to a single owner, some are owned by multiple people, such as a car shared by a married couple.  

Legally, you are required to carry this permit with you at all times while driving. 

What is the importance of vehicle ownership? 

Contrary to popular belief, vehicle ownership documents do more than prove ownership.  This document is also important when making an insurance claim since the owner of the vehicle is the person who will be compensated for any damage against the insured peril.  

Kori Duff, licensed insurance advisor with Surex, says vehicle ownership helps establish who has an insurable interest in the vehicle.  “The individual listed on the title or registration is the named insured on the insurance policy. It's who will be indemnified in the event of a covered loss.”  

Transferring vehicle ownership in Ontario is not as simple as giving the new owner the car keys. While the process of vehicle ownership transfer is not complicated, there are different requirements depending on whether you are transferring ownership to a family member or a non-family member.  

Transferring vehicle ownership to a family member in Ontario 

This process can be done with less formality compared to transferring to non-family members. However, the government requires inter-family vehicle ownership transfers to be done once per 12 months.  

A family member can be a parent or step-parent, spouse, grandparent or step-grandparent, grandchild or step-grandchild, child or step-child, daughter-in-law or son-in-law, step-sibling or sibling, father or mother-in-law, adopted sibling and half-siblings. Both inter-family parties involved in the vehicle ownership transfer are required to visit a Service Ontario location.     

Duff says transfer requirements may differ depending on the relationship between the parties and the province or territory.  

“Regardless of the relationship, the policy will need to be written to the individual or entity listed on the vehicle title or registration. If the ownership and named insured do not match, a separate policy may be required.” 

The vehicle ownership process will only be initiated if the following documents are provided: 

• Proof of vehicle insurance in Ontario 
• Ontario Driver’s license 
• Vehicle Ownership permit  
• A declaration of vehicle plate transfer (only allowed between family members) 
• A sworn and notarized statement for a family gift in the case of a used motor vehicle  
• Safety standards certificate. Inter-spouse transfers will not be needed provided a notarized spousal declaration is signed.  
• Used vehicle information package (UVIP) 
• Bill of Sale 

Duff recommends contacting your provincial licensing and registration authority to confirm the required documents before the transaction. 

“Requirements vary by province or territory and may include the vehicle title or ownership document, a bill of sale or transfer form, identification, and a safety certificate,” she says. 

How to transfer ownership as a gift 

In Ontario, before gifting your car, you must ensure it is fully paid off (no liens or outstanding car loans) before you transfer car ownership. You and the recipient of the car must visit a Service Ontario location with all the required documentation to complete the transaction. 

Additionally, if you plan to transfer your licence plates to the recipient, note that this privilege is strictly limited to spouses, parents, or children. You will need to complete a plate transfer declaration before doing so. 

Here are some things that Duff says you should consider when gifting a vehicle to a family member:  

• Complete the ownership transfer in accordance with provincial requirements.  
• Ensure the recipient’s name appears on the updated ownership or registration.  
• Confirm that the recipient obtains insurance before driving the vehicle. (Your advisor can help with this.) 
• Ensure the named insured on the policy matches the registered owner. 
• Notify your insurance advisor so the vehicle can be removed from your policy.  
• If there is a lienholder or lessor, confirm that the loan or lease requirements have been satisfied before transferring ownership. 

Non-family vehicle ownership transfer 

If you are selling your vehicle in Ontario, you may deal with a lot of potential buyers. Transferring a vehicle to a non-family member carries more risk compared to inter-family transfers. Why so? Because private transactions involve unrelated parties, both buyers and sellers must stay vigilant to protect themselves from financial loss, scams, or unfair valuations. The most important step is ensuring that the vehicle identification number matches that of the permit.  

If you transfer car ownership as part of a sale to someone who is not your immediate family, the individual must pay 13% retail sales tax (RST). This 13% tax is calculated based on either the purchase price or the vehicle's Canadian Red Book wholesale value, whichever is greater. 

Flemming explains the difference between transferring to a family member versus a non-family member: “If the vehicle is being given as a gift to an eligible family member, the transfer can qualify for an RST exemption. A Safety Standards Certificate is not required for a spouse-to-spouse transfer,” he says. 

Steps for transferring vehicle ownership 

Flemming outlines what each party must do for a successful transfer: 

Seller: 

1. Get the UVIP (used vehicle information package) 
2. Check for liens 
3. Prepare Bill of Sale 
4. Sign the vehicle permit transfer 
5. Give the buyer the required documents 
6. Remove your plates 
7. Notify your insurer 

Buyer: 

1. Get insurance 
2. Get the Safety Standards Certificate 
3. Go to Service Ontario 
4. Pay RST and registration fees 
5. Register within 6 days 

When you sell your motor vehicle, ensure you remove the license plates. This safeguards you against paying for the new owner’s speeding or parking tickets. After the sale, the license plate should stay with the buyer and not the vehicle. 

Vehicle registration must be undertaken within 6 days after the purchase. New Ontario residents need to register within 30 days of moving.  

Flemming states that insurance must be in place before the vehicle can be registered and driven. 

“Ontario requires vehicles driven on public roads to have insurance,” he says.

How much does it cost? 

In addition to the $20 Used Vehicle Information Package (UVIP), transferring vehicle ownership incurs a basic $32 administrative fee, alongside the standard 13% Retail Sales Tax (RST).  Note that these government fees and taxes apply to all road vehicles, from standard cars and trucks to motorcycles. 

Insurance awareness: 

One of the key requirements when transferring vehicle ownership in Ontario is proof of insurance. When it comes to selling, buying or even transferring vehicle ownership, having a valid and active vehicle insurance policy is mandatory.  

Duff stresses the importance of notifying your insurance advisor of any type of transaction.  

“Notify your insurance advisor before and after the transfer. This helps ensure the vehicle is insured under the correct ownership, confirms any changes to coverage or premiums, and the vehicle is removed from the previous policy when appropriate,” advises Duff.