How to buy a used car: After the sale
When you buy a car, new or used, you’ll need to get auto insurance. Compare car insurance quotes from Canada’s top providers and find affordable coverage today.
This article was originally published on December 6, 2019 and was updated on May 23, 2025.
You did it. You researched, compared prices, car models, and years, negotiated with the seller, and finally purchased a used car. Congratulations! Whether it’s your first time buying a car or a new-to-you upgrade, there are a few essential steps you’ll need to take in the following days to finalize the purchase. This article will break down everything you need to do after you buy a used car in Canada.
Key takeaways
- After you buy a used car, you need to finalize payment, transfer ownership, secure auto insurance, register the vehicle and pay applicable taxes.Â
- Your province or territory will determine the exact process to follow. For more information, refer to the provincial guidelines.Â
- Once your car purchase is complete, you should plan for ongoing costs associated with owning a car, such as gas, parking, maintenance, and unexpected expenses.Â
1. Finalize payment (if you haven’t already)
If you’ve arranged to pay after you pick up the car, your first step to closing the sale is to finalize payment. Once you agree to a price, decide how to pay, whether by financing (weekly, bi-weekly, or monthly instalments) or buying it outright. Leasing used cars is uncommon in Canada.
The advantage of financing is that you won’t be required to foot the entire bill up front. However, you will have to pay interest, which means the overall cost of the car will be more than buying it outright. Try out our car loan calculator to figure out the cost of financing the vehicle.
2. Transfer ownership
Once the payment is final, you’re one step closer to being the official owner! Now, it’s time to transfer ownership of the car, which means the new owner (you) becomes legally responsible for it. The process and documentation you need to complete this step will be different based on your province or territory of residence.
On a general level, you’ll need:
- The ownership/registration documents
- A bill of sale
Depending on where you live, you may also need a used vehicle information package (UVIP), which is required in Ontario. Or, if you live in British Columbia, you will need to complete a transfer/tax form.
In some provinces, this step is completed at the same time as registration. Refer to your provincial guidelines below to understand what documents are required.
3. Get car insurance
You must have valid auto insurance to legally drive a car in Canada (and register it in your name). Driving without insurance is against the law and could result in fines or license suspension. So, you must get a car insurance policy before you pick up your used vehicle and drive it home.
Car insurance can be expensive, but shopping around and comparing quotes can help you find big savings. Whether or not you can shop the market will depend on your province or territory. Some provinces, such as B.C., Manitoba and Saskatchewan, operate on a public insurance model, meaning drivers can only obtain insurance from one place. For example, you can only get auto insurance from ICBC in B.C.
Private insurance-operated provinces like Ontario and Alberta allow drivers to compare quotes from various insurance providers. Ratehub.ca’s insurance comparison tool will help you find your lowest rate before signing a policy.
When looking for car insurance, pay attention to the type of coverage you’re required to have based on your province of residence. Non-mandatory but highly recommended coverage includes collision and comprehensive insurance. Collision insurance protects your car if it’s damaged in an accident, whereas comprehensive coverage protects it if it’s damaged while not in use, for example, if it’s parked.
Tip: Follow a 10% rule to decide whether you should have collision and comprehensive coverage on your car. Insurance experts recommend dropping these optional coverages if your deductible exceeds 10% of your potential payout. If your used car is worth $4,000, and the deductible is $500, your potential payout would be $3,500. In this case, opt out of collision and comprehensive coverage (if you can afford to replace the vehicle out of pocket).
Remember, you must have proof of insurance with you whenever you drive. Most people keep it in the glove box, but in some provinces, you can have a digital pink slip on your cell phone.
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4. Register the vehicle
Once you’ve secured auto insurance, your next step is to register the car in your name. The process and required documents vary by province or territory. In some provinces, registration and insurance are done at the same time.
In Ontario, you have six days to register your vehicle after purchasing a car. You must bring your driver’s license, proof of insurance, UVIP, bill of sale and safety standards certificate, among other documents, to ServiceOntario.
However, to register a vehicle in Alberta, you only need to bring proof of ownership such as a bill of sale, proof of insurance and government-issued ID to a registry agent.
Some provinces may also require a safety inspection, especially if the car is from out of province. At registration, you will also be issued your license plates if you don’t have existing ones. Refer to your provincial guidelines to ensure you have all the required documents and to confirm registration fees.
5. Pay applicable taxes
Paying sales tax is the least exciting part of buying a used car. But it’s an essential part of the post-purchase process. This step comes at the time of registration. The amount you pay will vary by province, so check your provincial guidelines.
In Ontario, you will pay 13% RST based on the price you paid for the car or the wholesale value, whichever is higher. In Quebec, if you buy a used car from an individual not registered for the QST, you will be required to pay 9.975% QST based on the sale price or estimated value of the vehicle, whichever is higher.
In some cases, you will be exempt from paying sales taxes. For example, if you transfer the car to a family member or friend in Ontario, you won’t need to pay tax.
6. Plan for ongoing ownership costs
Once you’ve paid any applicable taxes, the car is officially yours! As a brand-new used car owner, beware of the ongoing fees you’ll likely pay down the road. These include car insurance, regular maintenance, and other costs of owning a car, like gas and parking.
Here are a few fees to plan for:
- Oil changes
- Tire changes (summer to winter tires)
- Battery replacement
- Windshield wipers
- Gas
- Parking fees
- License renewals
- A rainy day fund for unexpected expenses
Links to provincial guidelines
As mentioned throughout this article, the process and steps you’ll need to take after buying a used car differ based on your province or territory of residence. Here is a list of provincial guidelines you can refer to for post-purchase steps:
The bottom line
Buying a used car is exciting, but it also carries a lot of responsibility. To ensure you’ve properly sealed the deal of your used car purchase, follow the after-the-sale steps outlined above and refer to your province or territory’s website for a breakdown of the processes you must follow. Happy driving!