Are you having trouble finding your dream car locally? You are not alone. The vehicle shortages nationwide have made purchasing a new vehicle challenging. Due to lower inventory, used-vehicle prices are rising amid intense competition for supply, which is adding to the bottom lines of both new and used vehicles. Many who need a new car are looking beyond borders for a deal. Purchasing an out-of-province vehicle may add stress, require additional paperwork, or raise questions or concerns. If you’re unable to buy a car in your province, you can read on for some tips on purchasing an out-of-province vehicle in Ontario.
Can I Buy a Car Out-Of-Province?
Yes, you can! Whether you purchase a car through a dealership or a private sale, you can buy a car from any province in Canada. However, taking this route can entail several additional expenses – extra paperwork, extra research, extra time, and awareness of the regulations in each province, as they vary from one province to the next.
Breakdown of Key Considerations
1. Legality
- Legal and Regulatory Aspects: Buying a car out of province is legal; however, each province has its own regulations regarding vehicle sales and registration.
- Research: Familiarize yourself with the rules and regulations of both the province where you’re buying the vehicle and the province where you’ll register it.
- Sales Tax: You’ll need to pay the applicable sales tax (HST or PST) in the province where you register the vehicle. Additionally, you may be eligible for a refund for any sales tax you pay in the province when purchasing the car.
- In-Transit Permit: You may need an in-transit permit to legally drive the vehicle back to your home province for registration and payment of sales tax.
- Insurance: Obtain auto insurance before driving the vehicle out of province, and ensure coverage is in place before applying for an in-transit permit.
- Bill of Sale: Ensure you have a proper bill of sale that includes the purchase price, vehicle identification number (VIN), and the contact information for both the buyer and the seller.
2. Paperwork and Documentation
When visiting a ServiceOntario office, please ensure you have the following paperwork ready. Once you have presented these documents, you will be provided with a vehicle registration document and an Ontario licence plate. In Ontario, privately owned vehicles no longer require a licence plate sticker based on your date of birth.
- Out-of-Province Ownership or Title: Be prepared to provide an out-of-province ownership or title as part of the registration process in your home province.
- Proof of Insurance: You’ll need to provide proof of insurance when registering the vehicle in your home province.
- Vehicle History Report: Obtain a comprehensive vehicle history report to verify details such as accident history, outstanding vehicle loans (if any), and unresolved safety recalls, particularly when purchasing from a private seller.
3. Additional Considerations
- Shipping: If you don’t want to drive the vehicle back yourself, you can arrange shipment to your home province.
- Provincial Variations: Regulations and requirements vary by province; please check with your province’s transportation authority for the most accurate information.
- ServiceOntario: For information on registering an out-of-province vehicle in Ontario, visit ontario.ca.
- Contact ServiceOntario: For questions about retail sales tax exemptions, contact ServiceOntario at 416-235-2999 ( GTA ) or toll-free at 1-800-387-3445 (Canada).
Before You Buy a Vehicle Out of Province
- Check with the Seller: Ensure the vehicle is in good condition and that the seller has all the necessary paperwork.
- Contact your province’s Vehicle Registration Authority (VRA): If you’re buying from another province, contact their VRA to understand any specific requirements or permits required for transporting the vehicle to Ontario.
- Determine the car’s condition: Obtain a pre-purchase inspection to ensure the vehicle is in good condition.
- Cover all the bases: Negotiate the vehicle price and finalize any other sale terms.
Any vehicle entering from another country or province must obtain a Safety Standard Certificate confirming compliance with all provincial safety and pollution requirements. You should consider getting a thorough mechanical inspection, including a safety certification from a licensed mechanic, before finalizing the purchase.
New Vehicle Requirements
When buying a new car, the plates, registration, and sales taxes must be paid in the province where you reside. Regardless of the province where you buy the vehicle, you must pay sales tax in your home province. Typically, you’ll need to have the car insured before any of the above can happen. All paperwork must be completed in the province listed on your driver’s licence.
Unfortunately, there is no standard rule or regulation for registering out-of-province vehicles. Make sure to check with ServiceOntario to ensure your bases are covered!
Be Clear with the Seller
If it’s a dealership, ensure they’re correctly set up to conduct interprovincial transactions. The type of service you receive will vary among dealerships – some will track down and obtain a new vehicle for you, others will not. Trading among dealerships across provinces also varies by make, model, and province.
If you’re considering buying from another province, be sure to ask about specifics related to your situation and locale. With a bit of research, you may encounter dealerships that have a reputation for being specialists in serving out-of-province shoppers like yourself. If you opt for a private sale, ensure the seller is willing to sell their car out of province.
Verify the Vehicle
Before signing anything, always obtain a comprehensive vehicle history report. These reports will help you review items such as accident history, outstanding vehicle financing, and unresolved safety recalls. This is especially important if you’re buying from a private seller. It’s also a good idea to thoroughly inspect the car’s interior and exterior, taking as many photos and videos as possible. It’s also recommended that you undergo a thorough mechanical inspection, including a safety certification from a licensed and trusted mechanic. Remember, there may be some out-of-province inspections required, so please check with the VRA where you’re and where you’re buying from. Why? Inspection thresholds may vary by province.
Important: If buying privately, verify the seller’s ownership and registration against a government-issued personal ID to ensure they match. Also, review consumer protection laws to ensure you’re covered in both the province where you’re buying and the one where you’re bringing it.
Insurance and In-Transit Permit
If you are taking possession of a vehicle in one province and driving it to another, you may be eligible to receive an in-transit permit. This document will allow you to take the vehicle home, register it, and pay the applicable sales tax. However, be sure to have your insurance in place before you can obtain this permit. You will have to complete the sale of the vehicle before you can get your insurance coverage, as you cannot insure something you do not own. So, follow the steps below to get started:
- Buy the vehicle
- Obtain the insurance for it, and finally
- For yourself, obtain the in-transit permit
Sales Tax on Out of Province Cars
For any vehicle you buy out of the province, you will need to pay the sales tax applicable to the province where you reside. This is where choosing a dealer that specializes in out-of-province sales comes in handy, as they will handle this for you. If you buy a car from outside Ontario, you will be responsible for paying the sales tax of that province. Then, you will need to follow the process to obtain the refund upon returning to Ontario, where you will pay the sales tax.
Purchasing an Out-of-Province Vehicle: Pros and Cons
Before you purchase a vehicle out of province, please carefully consider the pros and cons of the transaction. Buying out of province may not be worth the extra effort. Additionally, it isn’t worth the time, energy, and costs of re-registering the vehicle and refunding or repaying sales taxes. Be sure the savings from buying out of province aren’t offset by the cost of travel and lodging to bring it home.
On the other hand, if you need to purchase a vehicle in a province where you do not reside due to a lack of inventory or long wait times in your province, be sure to choose the right dealership. It can make all the difference by streamlining the process. Do your research!
Are There Any Paperwork Requirements When Buying a Used Car Out of Province?
Suppose you purchase a used car from another province. In that case, additional work may be required. This includes the need to have the vehicle inspected and certified in accordance with your province’s safety standards.
Will I Need to Pay Shipping Costs?
If a local dealer obtains a vehicle on your behalf from an out-of-province dealer, they’ll incur vehicle shipping costs. These will likely be billed to you.
Are There Additional Fees to Be Aware Of?
Once you purchase an out-of-province vehicle, you’ll also need to transfer the title to the province where you reside. Typically, this must occur within one to four weeks of your purchase. However, ensure you check the specifics for your province, as well as additional fees and costs.
If you’re looking to purchase an out-of-province vehicle, contact isure today to set up a new auto insurance policy!
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