How Does Joint Ownership Of A Car Work in Ontario?

Buying a car can be quite an endeavour, especially if you do it by yourself. To offset the high cost of buying a car, many Ontarians decide to purchase one with a spouse, family member, close friend or even a colleague, like a roommate. When two parties buy a car together, it's called joint ownership.

Opting for joint ownership of a car is a fantastic option if you and someone that you trust need to purchase a car but can't afford to do so by yourselves.

But how exactly does joint ownership work in Ontario? And how does joint ownership affect your car insurance rates?

We answer these questions about joint ownership of a car in Ontario, and many more, in the following paragraphs. 

Continue reading to learn more! Afterward, you can compare cheap car insurance quotes with your personal Surex insurance advisor.

What does "joint ownership of a car" mean?

Simply put, joint car ownership is when two parties (i.e. you and your spouse, family member, friend, etc.) purchase a car together. 

Although they may sound similar, joint ownership of a car is different from co-signing a car loan; we'll touch on these differences shortly.

If two parties intend to purchase a car together, they need to ensure that both of their names are listed on the vehicle registration. Both parties also need to make sure that they've signed all of the required documents, like the transfer of ownership form. 

Pro tip — We suggest keeping a copy of your vehicle registration, along with your proof of insurance, in your vehicle at all times. Having these documents in your vehicle is incredibly important, as you'll most likely be asked to provide them if you or the other owner are pulled over by the authorities.

All in all, if you've been wondering how to get joint ownership of a car in Ontario, all you need to do is make sure that both you and the other party are listed on the vehicle registration and have signed all of the required documents. You'll also need to contact your auto insurance provider to let them know about the purchase. 

Please note that if one of the parties already has an auto insurance policy on a different vehicle, a new policy will need to be set up for this vehicle with both of the owners listed as named insureds on it (you cannot add a named insured to an existing policy if they only have interest in one of the vehicles).

How does joint ownership influence your auto insurance premium?

If you've been considering joint car ownership in Ontario, you should take a moment to think about how it could influence your insurance premium (or how you could impact the other party's premium).

While determining the rates for a joint car ownership policy, insurance providers take both parties' insurance and driving histories into consideration. If one of the parties has a spotty driving record, insurance history, etc., then it will affect both drivers' premiums.

Here's an example:

Driver A and Driver B are planning on buying a car together. Driver A has a pristine driving record and has never filed an insurance claim, whereas Driver B has a spotty driving record and has submitted a handful of claims over the past few years. 

If both parties were to purchase their own vehicles, Driver A would (most likely) not have to pay as much for auto insurance as Driver B. But, because the insurance company needs to take both parties' histories into consideration and Driver B has a spotty driving record, Driver A will end up paying more for coverage.

Drivers should note that their driving history isn't the only thing that affects their insurance rates; auto insurance companies take a wide range of factors into consideration, some of which include the drivers':

• Age — Young, inexperienced drivers tend to pay more for insurance than older, more experienced drivers.
• Address — Vehicles in busy, urban areas are more likely to get damaged, stolen, vandalized, etc., than vehicles in rural areas. Because of this, policyholders that live in large cities tend to have higher rates than policyholders (with the same vehicle, level of experience, types of coverage, etc.) in rural areas.
• Coverage preferences/requirements — Opting for additional types of insurance, like comprehensive coverage, will increase your auto insurance rates.

One other thing to consider: As a co-owner of a vehicle and insurance policy, whatever happens to that vehicle will follow both drivers for up six to ten years. If Driver B gets in a serious accident, Driver A will also be rated for that as it happened on their policy. If the policy defaults in payment and is canceled for non-payment, that will follow both owners for three years.

What's the difference between co-signing a car loan and joint car ownership in Ontario?

As mentioned earlier, joint car ownership is when two parties purchase a vehicle together; this is quite different from co-signing a car loan.

When you co-sign a car loan, you're taking on the financial responsibility of paying off the remainder of the loan if the primary signer cannot cover the expenses. If you co-sign a car loan, you don't have to be listed on the auto insurance policy or vehicle registration.

Joint car ownership in Ontario — Is it the right choice for you?

There's no black-and-white answer to this question; to some drivers, joint ownership is a great option, as it gives them the opportunity to purchase a car sooner than they would have by themselves. However, to some drivers, joint ownership may pose more of a risk than a reward. If you enter a joint ownership agreement with a driver who has a poor driving record, it can negatively impact your insurance rates.

Thankfully, there's an easy way to save on insurance in Ontario: teaming up with your Surex insurance advisor!

Save up to 25% when you bundle with our team at Surex

At Surex, we take pride in our team's ability to provide policyholders with the best, cheapest auto insurance quotes on the market. In ten short minutes, we can help you find and compare the best quotes from some of the top-rated providers, like CAA Insurance.

Contact us today to learn how we can help you save (as much as) 25% when you bundle multiple policies with one of our trusted partners.