Transfer of ownership
Avoid post transfer nightmares!
Whether selling your vehicle privately, signing it over to a wrecker or body shop, you should always make sure the ownership has been transferred out of your name before instructing your insurance broker to delete the vehicle from your policy.
A bill of sale or signed ownership does not constitute a legal change of ownership in the eyes of the MTO. As long as the ownership is in your name, you are considered the owner of the vehicle. Of course this is something that could perhaps successfully be argued in court, but not without considerable stress and financial outlay. The following example will illustrate the importance of never assuming the party taking over the vehicle has followed through with Service Ontario to finalize the transfer of ownership.
Let’s say you sell your vehicle to a body shop. You receive a bill of sale and sign the back of the ownership, leaving it with the purchaser. You then contact your insurance broker and instruct them to delete the vehicle from your policy. Some time later that vehicle becomes involved in an accident resulting in injuries to some of the parties involved. The next thing you know you have received, as the owner of the vehicle, legal notice regarding the injuries resulting from the accident.
Of course you are shocked. It turns out the shop had apparently repaired the vehicle and sold it to someone who did not legally plate the vehicle or complete the transfer of ownership. As the ownership was never changed, the MTO still showed you as the owner of the vehicle. With no insurance coverage in place you are on your own to prove this was no longer your vehicle and defend the legal action against you.
If you are selling your vehicle to a family member, trading it in at a reputable car dealership or signing it over to your insurance carrier as a result of a claim, the risk of the ownership not getting transferred over is likely minimal, but that extra step of confirming with your nearest Service Ontario office that the transfer is complete can allow you to delete the vehicle from your insurance policy with confidence.