What is a Bill of Sale for a Used Car?

Planning to buy or sell a used car in Canada? You may need a bill of sale. An important component of most private car sales in Canada, a bill of sale is a legal document used to transfer car ownership from the seller to the buyer. Depending on where in Canada you live, a bill of sale is legally required to complete a private vehicle sale. Designed to protect both the buyer and the seller, a car bill of sale is used to register the vehicle with your province or territory, to determine how much (if any) sales tax must be paid and acts as a proof of purchase. The good news is that creating a used car bill of sale is actually pretty simple.

What is a bill of sale?

A bill of sale is a legal document containing the details of a private car sale. You can think of it as a sales contract or receipt.

Which provinces require a bill of sale?
A bill of sale is required to legally transfer ownership from the car seller to the buyer in most Canadian provinces and territories. Private car sellers in Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Prince Edward Island, Newfoundland and Labrador, Nunavut, Yukon and the Northwest Territories must provide a bill of sale. In Quebec and Nova Scotia, a bill of sale is recommended but not required. A bill of sale is not needed to transfer ownership in British Columbia.

Why do you need a bill of sale?
In most provinces, a bill of sale is required to transfer ownership, calculate sales tax and register the vehicle under the new owner's name.

Transfer ownership
When making a large purchase, like a new or used car, it's important to have proof of purchase. As the official receipt of a private used car sale, a bill of sale is used to transfer ownership of a used vehicle from the seller to the buyer and is required by most provinces to officially register the car under the new owner's name and license plates. As a legal document, a bill of sale also protects both parties from future disputes. If in the future the car is stolen or involved in an accident, a bill of sale can be used by the new owner to prove ownership, while the seller can present the bill of sale to authorities to prove that the car is no longer their responsibility.

Calculate sales tax
Depending on the value of the used car you plan to buy and where you live, you may need to pay sales tax on the purchase. While private sellers are not required to collect sales tax (and should not do so), buyers should be aware that they may be required to pay tax when registering the vehicle. The price listed on the bill of sale will be used to calculate how much (if any) sales tax is due.

As with most purchases, the tax rate on used cars varies between Canadian provinces and territories. British Columbia charges from 12% to 20%, depending on the value of the car. Buyers in Saskatchewan pay 6% PST on used cars valued at $5,000 or more. Used cars in Manitoba are subject to 7% RST, while 13% HST is applied to pre-owned vehicles in Ontario and 9.975% QST is charged on private car sales in Quebec. In the Atlantic provinces (New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland and Labrador), used car sales are subject to 15% HST. No sales tax is charged on private car sales in Alberta, Yukon, Nunavut or the Northwest Territories.

For buyers considering purchasing a used car from another province, it's important to remember that, when it comes to private sales, buying a car in a different province will not help you save on tax. Sales tax on private used car sales is charged at the time of registration in your home province or territory and is based on where you live, not where the car was purchased.

Vehicle registration
In most provinces, a bill of sale is required to register a vehicle under a new owner. The details on the bill of sale will be used to officially transfer ownership into the buyer's name and to register or issue new license plates and vehicle permits. This is an important step in any vehicle purchase and must be completed in a timely manner. In Ontario, Alberta and Manitoba, you must register your new used car within six days of the date on the bill of sale. Saskatchewan and PEI drivers have seven days to register their vehicle. Newfoundland drivers have 10 days to complete registration, while drivers in New Brunswick have 14 days. Buyers in British Columbia, Quebec and Nova Scotia have the most generous ownership transfer period, with up to 30 days to register.

What information do you need to include in a bill of sale?

If you're wondering how to make a bill of sale, here are the six items a bill of sale needs to include:
1. Vehicle Identification Number
Every vehicle has a unique Vehicle Information Number (also known as a VIN). You can find the VIN on the bottom right corner of the dashboard (visible through the windshield), on the interior frame of the driver's side door and on the vehicle's registration papers. Both the buyer and the seller should double-check that the VIN on the bill of sale exactly matches the VIN on the car and on the vehicle permit.

2. Vehicle details
The bill of sale needs to include an accurate description of the vehicle. You should include the car make, model, year, body type, colour, engine type (gas, diesel, hybrid or electric) and odometer reading (mileage) at the time of purchase.

3. Purchase price
There are two reasons a bill of sale must include the purchase price. Firstly, it is a receipt. It benefits both the buyer and the seller to have an accurate record of the transaction. Secondly, this information is required by provincial governments to calculate sales tax. It's important to note that some provinces will check the purchase price on the bill of sale against the assessed value or wholesale value of the car and charge tax on the higher amount. In other words, even if the buyer pressures you, there's usually no benefit to listing a lower amount than the actual agreed-upon purchase price.

4. Purchase date
The purchase date listed on the bill of sale is used to determine what date the car must be registered by. Failure to register the car within the allotted time may result in fines.

5. Seller details and signature
The bill of sale should include the full name, address, phone number and signature of the seller. This is used to transfer the car's ownership from the current owner (seller) to the new owner (buyer).

6. Buyer details and signature
To complete the bill of sale, the seller should obtain the name, address, phone number and signature of the buyer.

Ready to write your bill of sale? RightRide helps private sellers create printable bills of sale online. Simply enter the details of your car sale into RightRide's bill of sale generator and effortlessly create a professional-looking document.

Private vs. registered dealership differences

Before purchasing a car from a private seller in Canada, buyers should research the process and paperwork required in their province or territory. For example, in Ontario, most private sales require a bill of sale, vehicle permit, Used Vehicle Information Package (UVIP) and Safety Standards Certificate (SSC). It is the buyer's responsibility to ask for the necessary documentation as the seller may not be aware of the requirements. On the other hand, if you purchase a used or certified pre-owned vehicle from a registered dealership, the dealer will prepare all the necessary paperwork and may even register the vehicle for you. In general, buying a car from a private seller is often cheaper but involves more work for the buyer, while buying from a dealership can be more convenient but tends to cost a bit more. Kijiji Autos has a huge inventory of used cars for sale
by both private sellers and dealerships, allowing you to choose the purchasing method that works best for your budget and schedule.

What do I need to register a vehicle in my province?

British Columbia
  • Original vehicle registration form with current owner's signature (bottom portion of ICBC form APV250)
  • Completed and signed Transfer/Tax Form (ICBC form APV9T)
  • Bill of sale
  • Proof of insurance for the vehicle that includes the name of the person registering the vehicle
  • Proof of identity such as a driver's license
  • When registering a used vehicle imported into Alberta from another province or country, you will also need an Out-Of-Province Vehicle Inspection Certificate (only valid for 14 days after the date of inspection)
  • Bill of sale
  • Completed Transfer of Ownership form (located on the car's existing certificate of registration)
  • When registering a vehicle that was previously registered outside of Saskatchewan, you will also need a Mechanical Safety Inspection Certificate
  • Bill of sale
  • Completed Transfer of Ownership Document (located on the back of the car's vehicle registration card)
  • Certificate of Inspection (COI) from a Manitoba inspection station (valid for one year from the date of inspection)
  • Bill of sale
  • Completed Used Vehicle Information Package. (Please note that a UVIP is not required when the vehicle is purchased from a registered dealership or from a family member.)
  • Safety Standard Certificate proving the vehicle meets minimum safety standards (valid for 36 days after the date of inspection)
  • Ontario driver's license
  • Proof of insurance
  • Original vehicle permit with Application for Transfer portion completed and signed by the seller (located on the back of the permit)
  • In Quebec, most used car registration processes can be done online through SAAQclic. Exceptions apply for cars over 25 years old, vehicles registered outside of Quebec and vehicles intended for commercial use. After completing the online process, the buyer and seller must go to a SAAQ service outlet to present proof of identity (such as a driver's license) and the car's odometer reading in order to finalize the transfer of ownership.
New Brunswick
  • Bill of sale
  • Certificate of Registration signed on the back by the seller
  • Valid inspection sticker proving the car has passed inspection within the last two years
Nova Scotia
  • Certificate of Registration—seller must sign the Transfer of Ownership section on the back of the certificate, complete the Transfer of Title Certificate of Sale (Part 1) section, and sign and submit the Notice of Sale
  • Application for Certificate of Registration—to be completed by the buyer
  • Valid Nova Scotia Motor Vehicle Inspection sticker (obtained by the seller within 30 days of sale or by the buyer prior to registration)
Prince Edward Island
  • Bill of sale
  • Vehicle permit with Notification of Transfer completed and signed by seller
  • Valid motor vehicle inspection form
  • Proof of insurance
Newfoundland and Labrador
  • Bill of sale
  • Vehicle registration certificate with completed Notice of Sale section
  • Safety inspection certificate
  • Proof of insurance
  • Vehicle registration application
  • In private sales where the purchase price is lower than the vehicle's average wholesale value, the seller and buyer must sign and submit a sworn affidavit confirming that the price on the bill of sale is accurate
  • Bill of sale
  • Copy of vehicle registration
  • Proof of insurance
Northwest Territories
  • Bill of sale
  • Vehicle registration signed on the back by both seller and buyer
  • Photo identification, such as a driver's license
  • Proof of insurance
  • Bill of sale
  • Vehicle registration with Transfer of Ownership section completed and signed

Selling your car on Kijiji Autos

Ready to take the next step? Kijiji Autos offers Canadians a way to buy and sell cars in Canada that is designed to be safe and convenient. Designed to make selling your car easy, Kijiji Autos leads you through the listing process to build a better car ad, helping you reach thousands of motivated buyers in your area. Plus, with our helpful advice hub and with the help of a bill of sale generator, you can feel confident and in control throughout the sale process.
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