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Buying or Selling a CarBack to top Back to main Skip to menu
Canada - Buying or Selling a Car
Taxes are payable on new cars and these may be either goods and services tax, sales tax imposed by the provincial government or a combination of the two which is known as harmonised sales tax. Goods and sales tax is at a standard 5% across the country, but the other two taxes will vary in each province. The province of Alberta does not have provincial sales tax or harmonised sales tax. The taxes that are payable will be detailed by the dealer, so you will know in advance how much you will need to pay out.
You need to be sure when you are buying a used car that all the paperwork is in place and everything matches. The used car history report is an essential piece of documentation and you may also need to carry out a safety check to be sure of the roadworthiness of the vehicle. The seller needs to provide you with a certificate of title, certificate of sale and the safety inspection details. Without this information you will not be able to register the vehicle in your name. When you buy privately you should also check the history of the car and ensure that there are no outstanding debts on the vehicle as you do not want to become liable for them.
You may also need to pay taxes on a second hand car. With a used car dealership the same taxes apply as for a new car. If you purchase the car privately then you will be liable for retail sales tax. The rate of retail sales tax will vary in each province but in some areas is in line with the harmonised sales tax rate. The current rates can be obtained from the vehicle registration office.
A new or used car must be registered when the purchase is complete. This needs to be done in the province in which you are living. If you buy from a dealership they are able to take care of this process for you but will normally charge a fee. If you are purchasing a car privately then the registration process is the responsibility of the buyer. All the paperwork should be passed to the buyer and the car should be registered as soon as possible following the purchase.
In order to register a car you will need to produce a certain amount of documentation. You will need to have your driver’s licence, proof that you have purchased the car, the certificate of ‘title’ which has been signed by both parties, proof that you have insurance for driving the vehicle, details of the licence plate, details of the safety inspection and in some areas you may need to have two forms of ID. Fees for car registration are different in each province and in some areas you may need to renew the registration on an annual basis.
Licence plates are assigned to a driver rather than a car and if you change cars the licence plate can be transferred to the new vehicle if you wish. Some provinces may require you to display a ‘temporary’ sticker on the licence plate when you have begun the registration process.
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