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:
 

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.