Seller beware’ is the law in private car sales:
Did you know?
Private car sellers can be held liable for a new owner’s bills if the ownership isn’t transferred. So, find a purchaser you trust to do this task.
John Pettitt sold his car for $800 in 2008 to a buyer he found on the Internet. He thought that was the end of the story.
Imagine his surprise to receive a letter in January, demanding he pay $798 in towing and storage charges or face court proceedings.
“It was a tremendous shock to me, a senior in his 80th year,” says Pettitt, who refuses to pay a penny for charges he didn’t incur.
Under the Highway Traffic Act, a buyer of a used vehicle has to register it with the Ontario transport ministry within six days of acquiring ownership.
Pettitt’s buyer didn’t register the change in ownership. The cost of insurance may have been a factor, since you must have proof of insurance before you can attach licence plates to a car.
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This is a cautionary tale about still being on record as the registered owner of a vehicle sold almost five years earlier — and not finding anyone to help track down the current owner.
“I do not understand why I should be dragged through the courts when I diligently complied with every letter of the law,” Pettitt wrote to his MPP.
“The used vehicle information package tells the vendor to give the signed documents to the purchaser to take to the registry office. It does not say that you have to ‘frog march’ the purchaser there.”
In August 2008, he placed ads for his Ford Caprice wagon at AutoTrader and Kijiji, popular websites for selling cars privately.
“I was asking for more than $800, since the car was in good condition, even though it was old,” he says.
Pettitt tried to protect himself by refusing to accept a cheque. (The man took a few weeks to collect the money and paid with $20 bills.) He also asked for his driver’s licence number.
On hearing from the towing company this January, Pettitt went into an Ontario transport ministry office with his documents, showing that he’d sold the car. But he couldn’t get out of paying the bill.
The paperwork he’d obtained from the ministry showed him as the registered owner.
The towing company said it would settle for a smaller negotiated amount. Otherwise, it would have to proceed into collection under the Repair and Storage Liens Act.
When contacted by a collection agency in early July, Pettitt asked for help from the transport ministry.
“While I appreciate the frustration this matter has caused you, there is no further action the ministry can take at this time until the current owner registers the vehicle in their name,” said Paul Brown, director of the licensing services branch.
To Pettitt, the response was upsetting. He had complied with the law when selling his car, but couldn’t get any assurance that the threats of court action and credit rating downgrades would stop.
So, what can be done when selling privately?
Bob Nichols, the transport ministry spokesman, has this advice.
You can visit a Service Ontario centre to request a “report of sale” status placed against the vehicle.
The transport ministry will record it as being sold if you provide a letter showing the buyer’s and seller’s name, date of sale and vehicle identification number or VIN.
“However, the vehicle will still be registered to the seller until the ownership is actually transferred,” Nichols says.
So, take care in choosing a purchaser, since you may be on the hook for bills that arise after the sale.
Ask to go with the purchaser to the Service Ontario office to make sure the registration is transferred out of your name.
Bypassing a dealership can have pitfalls. Be aware of a gap in the law when deciding how to sell your car.
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