Buying a used car: Closing the sale

Did you know?

When transferring ownership of a car in BC, who registers the sale?
  • Buyer
  • Seller
  • Both

You’ve found a used vehicle that's just right for you, and you want to buy it. Here are steps to take to negotiate and finalize the sale. 

What you should know

About documenting the sale 

There are two parts to documenting the sale of a used vehicle. One is the transfer/tax form, as it’s called. This is a government form that must be completed and registered with ICBC. We explain the details below, under close the sale.

The other part is your agreement with the seller. Whether you’re buying from a dealer or a private individual, it’s key to get your agreement in writing. Having clear, written terms protects both parties from unwelcome surprises. We dig into this more below under get ready to buy, in step 5.

For now, know that if you’re buying from a dealer, they must give you a written purchase agreement. Under the law in BC, the agreement must include (among other things):

  • the odometer reading at the time of the sale, and whether it accurately records the true distance travelled by the vehicle

  • whether the vehicle ever had damage that cost more than $2,000 to repair

  • whether the vehicle is from out of British Columbia

  • an itemized list of any repairs needed and the associated cost 

  • whether the vehicle has ever been used as a taxi, police car, emergency vehicle, a lease vehicle, or a rental vehicle, or in organized racing

  • everything about the cost of buying the vehicle, including any dealer fees, documentation and administrative fees, licence and insurance fees, and the interest costs if you’re financing the purchase

The dealer must give you a copy of the purchase agreement at the time the agreement is accepted.  

How sales taxes work 

Generally, when you buy a used vehicle in BC, provincial sales tax (PST) is payable on the purchase price. That is whether you buy from a car dealer or a private seller. (There are some limited exceptions, explained here, such as when a relative gifts you a vehicle.)

When you buy privately, the PST rate is 12% (it’s more for passenger vehicles sold for above $125,000). PST is generally payable at the time the vehicle is registered with ICBC. On the transfer/tax form (explained below under close the sale), both the seller and buyer must certify the price of the vehicle. 

When you buy a used vehicle from a dealer, the PST rate is 7% (it’s more for passenger vehicles sold for above $55,000). As well, a dealer will charge federal goods and services tax (GST) at a rate of 5%.

The total price

Speaking of the price of a used vehicle, under the law in BC, if you’re buying from a dealer, the price you see on a window sticker or advertisement must be the total price. This is the full amount you have to pay to purchase the vehicle (not including taxes). This number needs to include any dealer fees, documentation and administrative fees, inspection and pre-delivery fees, and any transportation charges. You pay sales taxes on the total price.

How warranties work

“As I drove the used car off the lot, I was thrilled. I loved the car, and the dealer had thrown in a 90-day warranty to sweeten the deal. Three weeks later, the back seat flooded during a heavy rain. I brought the car back to the dealer. The good news: the repair was covered under the warranty. The bad news: it would cost over $2,000 and I was going to have to pay half of it. I hadn’t realized that the dealer’s ‘50/50 warranty’ meant that I had to pay 50% of the cost for a covered repair.”

– Zhang, Richmond, BC

Under the law in BC, certain conditions are implied in every sales contract. Whether you buy from a car dealer or privately:

  • The seller must have the right to sell the vehicle, and tell you if there are any liens against it (such as a claim by a lender that a car loan wasn’t paid). 

  • The vehicle must be as described by the seller.

  • The vehicle must be durable for a reasonable period of time.

If you buy from a car dealer, there are additional conditions implied in the contract:  

  • The vehicle must be of merchantable quality (that is, it has to be in usable condition and can’t be damaged). 

  • The vehicle must be fit for the purpose you bought it for. 

Collectively, these conditions are referred to as the legal warranty. If (for example) the vehicle isn’t reasonably durable, you can point to the legal warranty to get a repair or refund (as we explain here and here).  

If a dealer offers you an extended warranty

When you buy a used vehicle from a car dealer, they may suggest you buy an extended warranty. This is their promise to cover certain types of repairs and maintenance for a given period if there are problems. 

But be aware that an extended warranty may give you no more rights than you have already through the legal warranty. If you're offered an extended warranty, check its terms:

  • How long is it good for?

  • What repairs are covered?

  • Does it cover parts and service, or just one or the other?

  • Is it a “50/50 warranty,” where you pay half the costs of covered repairs?

  • Where will you have to go to get warranty repairs?

Be cautious if you’re asked to waive the legal warranty

The legal warranty can be waived for a used vehicle (if done so clearly). Be cautious if you’re asked to waive it or the seller says the vehicle is being sold “as is.” You’ll want to be sure you’ve done everything you can to protect yourself by following the steps below.

Get ready to buy 

Step 1. Take steps to protect yourself

Before you start negotiating on price, take steps to make sure the seller is trustworthy and the vehicle is in the condition they say it is. Here are key steps to protect yourself when buying a used car.

Step 2. Do your research on price

Check out the Canadian Black Book, Kelley Blue Book, and online classified ads to learn the average price of the make and model you’ve got your eye on.

Turn your mind to the things that affect the selling price, such as:

  • how many kilometres the vehicle has on it

  • the wear and tear both inside and out

  • the vehicle’s accident history

  • any flaws or mechanical issues

Getting a vehicle history report and independent inspection will be key in understanding the condition of the vehicle and shaping what kind of offer to make.

Step 3. Negotiate, with patience and confidence

Once you’ve got as much information as you can about the vehicle, ask the seller about any issues you’ve discovered. Press them for details and backup — for example, ask to see service records for any recent mechanical issues. 

When you make your offer to the seller, say it with confidence. 

If the seller makes a counteroffer to your original offer and you’d like to think about it, that’s okay. You can simply stop the deal if you feel like you’re being pressured into paying too much or buying additional features.

If buying from a dealer, pay close attention to each item involved — for example, any extended warranty, or any transportation fee or documentation fee. Keep in mind that anything about the sale of a vehicle can be negotiated, with the exception of taxes. 

Step 4. Consider how to pay

There are things to consider when deciding how to pay for a used vehicle. Weigh all your options before getting financing or a loan. Borrowing can be an expensive way to pay, and you'll want to make sure you can realistically afford the monthly payments (including interest payments).

Step 5. Get the agreement in writing

Whether you’re buying a used vehicle from a dealer or from a private individual, get the agreement in writing

If you’re buying privately, here’s a tool you can use to build your agreement. Or, you can download our agreement template. Put the terms you want into the agreement. If the seller has said they’ll get the brakes fixed before the sale, write that in. 

If you’re buying from a car dealer, they’ll have their own form of agreement. Don’t take the signing of this document lightly

  • Go over every section of the document, including any text on the reverse side of printed pages. 

  • Ask the dealer to explain any terms you don’t understand. 

  • Have the dealer fill in all areas of the document and put a line through any blank spaces.

Once you sign the document, the other party can accept it. After that happens, you have to buy the vehicle. Be aware that when you buy a vehicle, there’s no automatic right of return or cooling-off period the way there is if you lease a vehicle. (But if there's something wrong with the vehicle, or with the way in which it was sold to you, that’s a different story.)

Close the sale


Once you’re ready to buy (having gone through the above steps, with a written agreement in place!), you’re now ready to close the sale. 

If you’re buying privately, below are the steps to transfer the ownership of a used vehicle in British Columbia.

If you're buying from a dealer, the staff at the dealership can help you with the registration, insurance, and licensing. 

Step 1. Get a transfer form

For a private sale, you’ll need to get a transfer/tax form. Here’s a sample. The seller can get a blank transfer/tax form from an Autoplan broker. Here’s a searchable directory of Autoplan brokers.

During coronavirus

During the coronavirus pandemic, the transfer/tax form is temporarily available for download from the ICBC website. Note that original signatures are still required.

Step 2. Seller prepares the vehicle for sale

The seller should remove the licence plates from the vehicle, as well as the insurance and vehicle registration form. The insurance and vehicle registration are actually two parts of the same document. The seller should tear off the bottom portion of that document, the vehicle registration portion, and sign it.

Step 3. Seller provides the vehicle registration, buyer pays 

The seller gives the buyer the signed vehicle registration. The buyer pays the seller. 

Step 4. Both parties complete the transfer form 

Once the seller is paid, both the buyer and the seller complete the transfer/tax form and sign it. If either of you make a mistake on the transfer form, a new form must be completed, as ICBC will not accept a form that has been changed.

Step 5. Register the transfer

To complete the transfer, the vehicle registration and completed transfer/tax form must be brought to an Autoplan broker within 10 days of the sale. 

ICBC recommends that the seller and buyer go together to register the transfer. Doing so protects both parties. The seller can ensure their name and insurance are removed from the vehicle registration record in a timely way; and the buyer can register the vehicle, licence it and insure it all at the same time.

Common questions

I ordered a used car to be delivered from another location. Do I have a right to inspect it before accepting it?

Yes. A contract to buy something is not actually complete until the buyer has had a reasonable opportunity to inspect the goods to ensure they conform to the contract. You have a right to inspect the car and the seller must provide a reasonable time to inspect.

If you do any of the following things, it means you’ve accepted the vehicle:

  • you tell the seller you accept the vehicle

  • you register and insure the vehicle in your name

  • you keep the vehicle without saying anything to the seller   

Can I use the licence plates from my old car for the used car I just bought? 

If you don’t switch over the registration right away, you can drive the new vehicle with the licence plates from your old vehicle for up to 10 days from the date of purchase, as long as all of the following conditions are met:

  • The new vehicle is registered in BC.

  • You’ve sold or disposed of your old vehicle.

  • Both vehicles fall into the same category (for example, both are passenger vehicles).

  • The old licence plates are valid BC plates. 

  • You carry in the new vehicle all of the following:

  • the signed transfer/tax from for the new vehicle,

  • the original vehicle registration, 

  • the insurance papers for your old vehicle (the insurance must still be valid), and 

  • proof that you sold your old vehicle (such as a copy of the transfer/tax form for that sale).

Who can help

Helpful agencies

Vehicle Sales Authority of BC
Oversees retail car sales and helps resolve complaints with licensed car dealers.

  • Reviewed for legal accuracy in October 2022
  • This information applies to British Columbia, Canada
  • Time to read: 9 minutes

Reviewed for legal accuracy by

Mario Garcia, CarbonCure Technologies

Mario Garcia

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Buying a Used Car in British Columbia

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