How do I transfer vehicles and their insurance when I buy a business in Ontario?

If the business you are buying owns cars or trucks, the vehicles are not covered just because the business is. This page covers Ontario only; check the rules where you are if the vehicles are registered elsewhere. Whether anything needs transferring depends on the deal. In an asset purchase, the vehicles included in the sale are transferred to you. In a share purchase, ask your lawyer whether any vehicle changes hands at all before you plan the steps below.

The seller’s package and your permit application

Under s.11.1(1) of Ontario’s Highway Traffic Act, a person who sells or transfers a used motor vehicle must provide a valid used vehicle information package and deliver it to the purchaser at the time of sale or transfer. Under s.11.1(3), the purchaser must deliver that package to the Ministry before obtaining a new permit for the vehicle. Section 11.1(4)(d) lets regulations exempt classes of sellers from s.11.1(1) and classes of purchasers from s.11.1(3). ServiceOntario’s page says a buyer can also purchase the package before the sale or when registering the transfer at a ServiceOntario centre. The same page says OMVIC-registered dealerships do not need to provide one.

Insurance has to be in place before the permit moves

Under s.13(2) of Ontario’s Compulsory Automobile Insurance Act, the Ministry of Transportation shall not issue, validate or transfer a permit unless it is satisfied that, when the application is made, the vehicle is insured under a contract of automobile insurance. Separately, s.2(1) says that, subject to the regulations, no owner or lessee of a motor vehicle shall operate it, or cause or permit it to be operated, on a highway unless it is insured under a contract of automobile insurance. Section 15(1)(a) lets regulations exempt persons or vehicles from the Act or any of its provisions, subject to conditions in the regulations. Arrange the policy for each vehicle before the application, not after.

The safety standards certificate

Ontario Regulation 172/22 amended the Vehicle Permits regulation (Regulation 628 of R.R.O. 1990) and set out its section 2.0.1. Under s.2.0.1(2) of Regulation 628, a permit indicating a fit status shall not be issued for a used motor vehicle unless a safety standards certificate was issued on an inspection completed within the preceding 36 days. Section 2.0.1(1) says the section does not apply to motor assisted bicycles or to vehicles covered by s.2.0.2 or 2.1; s.2.0.2 sets its own certificate requirements, with its own exceptions, for vehicles that must display an annual or semi-annual inspection sticker. Section 2.0.1(3) lists cases where s.2.0.1(2) does not apply, among them an applicant who is the spouse or estate of the registered owner, and certain registered dealers, so read it against each vehicle. Under s.2(2) of Regulation 628, a permit indicating an unfit status may be issued where a required certificate is missing. Ask the seller which vehicles already have a current certificate.

Questions to settle before closing

• Which vehicles are owned by the business, and which are leased or owned personally by the seller?
• Is the deal an asset purchase or a share purchase, and which vehicles actually change owner?
• Who orders each used vehicle information package and who pays for it?
• Which insurer is binding coverage for each vehicle on the closing date?

Insurance for the business itself is a separate question, covered in this answer on new insurance at takeover.