What You Need To Know About Gifting A Car in Ontario
After buying a new car, you’re probably asking yourself the same questions that countless drivers have asked before you — what should you do with your old vehicle?
Many drivers opt to trade in or sell their old vehicles to a private buyer. Although selling your old vehicle is a practical choice, it isn’t your only option. You have the ability to gift your car as well.
Gifting a car in Ontario is a relatively common and straightforward process, but drivers should do some research beforehand to ensure that they can complete the process correctly the first time around.
Failing to do the proper research beforehand can potentially cause you to spend more time than necessary and prolong the gifting process.
Feel free to continue reading if you'd like to learn the ins and outs of gifting a car to a family member in Ontario.
START A QUOTEStep-by-step guide on how to gift a car in Ontario
Drivers (and in some cases, recipients) need to complete the following steps in order to gift a car to a relative in Ontario:
- Pay off the remainder of your vehicle loan
- Shop for car insurance
- Sign “Sworn Statement for Family Gift” document
- Prepare your vehicle ownership permit
- Get Safety Standards Certification or Spousal Declaration Form
- Transfer or buy a new licence plate
Pay off the remainder of your car loan
Before gifting a car to a relative, the current owner must ensure that the vehicle is completely paid off. This is due to the fact that you can’t give something away that you don’t entirely own.
After you’ve paid off the vehicle, you are able to do what you please with the car, like give it to a family member as a gift.
Bonus tip — The same rules apply when transferring vehicle ownership to another driver in Ontario.
Shop for car insurance
Drivers cannot register or operate their gifted vehicle at ServiceOntario unless they have valid auto insurance.
Operating a vehicle (gifted or otherwise) without sufficient auto insurance can lead to severe consequences. These consequences range from hefty fines to jail time (depending on the frequency and severity of the offence/s).
You can reach out to your personal Surex insurance advisor if you need help finding car insurance quotes in Ontario. Don’t have the time to call an advisor over the phone? No problem! At Surex, we make it easy for Canadians to shop for insurance over the phone and online, giving drivers the best of both worlds.
Sign a “Sworn Statement for Family Gift” document
During the gifting process, both the driver and the vehicle recipient need to sign a “Sworn Statement for Family Gift” form in front of a lawyer or a notary public.
Signing this document proves to the Ontario government the recipient of the vehicle is an eligible family member (more on this below), and that said vehicle is a gift.
You can get a copy of the “Sworn Statement for Family Gift” document at your local ServiceOntario or online.
Prepare your vehicle ownership permit
Drivers should double-check that they have their vehicle ownership permit on hand before going to their local ServiceOntario to gift their car. This is a green sheet of paper that most drivers store in their glove box or centre console.
You cannot legally transfer the ownership of your car to a family member without the vehicle ownership permit.
Get a safety standards certificate or a spousal declaration form
Ontarians that are gifting a vehicle to a relative need to obtain a safety standards certificate or a spousal declaration form.
A safety standards certificate is needed when gifting a car to a family member that isn’t a spouse. Some examples include:
- Children
- Step-children
- Grandchildren
- Siblings
A safety standards certificate proves that the vehicle meets the MTO (Ministry of Transportation Ontario) safety requirements.
On the other hand, drivers can bypass this step if they give their vehicle to a spouse. However, the owner and recipient will need to sign a spousal declaration form, which proves to the Ontario government that they are a legal couple.
Transfer or purchase a licence plate
When gifting a car to one of the following types of family members, you can either transfer your current licence plate or buy a one:
- Spouse
- Parent
- Child
Drivers that want to give a car to a different type of relative have the power to do so, but you must purchase a new licence plate.
You can transfer your current licence plate or buy a new one at your local ServiceOntario.
FAQ about gifting cars in Ontario
Here are some frequently asked questions that we’ve received about gifting a car in Ontario:
What types of family members are eligible for gifted vehicles?
The following types of family members are eligible to receive a gifted vehicle in Ontario:
- Spouse
- Common-law partner
- Parent
- Step-parent
- Child
- Step-child
- Grandparent
- Step-grandparent
- In-laws (father, mother, brother, etc.)
- Siblings (half, adopted, etc.)
Do you need to get car insurance for a gifted vehicle in Ontario?
Yes! As we mentioned earlier, all drivers need to have valid auto insurance to register or drive a motor vehicle in Ontario (regardless of whether it was given as a gift or purchased).
Where can drivers find cheap car insurance for gifted vehicles in Ontario?
You’re already here!
As Ontario’s digital insurance marketplace, we work hard to make finding high-quality car insurance quotes a frictionless experience. Instead of hopping from broker to broker, Surex pairs you with a personal insurance advisor who is always happy to answer your questions and help you shop for quotes. Within ten short minutes, we can provide you with a collection of top-notch quotes that are sure to meet or exceed your coverage needs.
Contact one of our experienced insurance advisors today to learn how we can help you save up to 25% on coverage when you bundle your policies with one of our providers.
Can drivers give a car to a friend in Ontario?
Yes, but the recipient will pay RST (retail sales tax). This is why gifting is more common amongst family members.
