How Much Tax Do You Pay on a Used Car in Ontario

Most people want to know how much the tax will be before they purchase something. Buying a secondhand car is no different in this regard. There are distinct laws and regulations in each of canada’s provinces, including Ontario. The provinces are affect by the characteristics of provincial taxation. Canada as a whole pays federal taxes. People are curious as to how their use car for sale purchases would affect their taxes. In relation to the state where they bought it.

Paying Taxes on a Used Car

The first concern that will surface is whether there will be a tax on the acquisition of a used car for sale. Generally speaking, the answer to this question is “yes.” The manner the sale is conduct will be where it differs. Was the transaction, for instance, conduct privately or through a dealership? The taxes impose on a used SUV for sale when it is sold are transfer taxes.

Does a Used Car Bought from a Private Seller Require Tax Payment?

There used to be a lot of controversy around whether taxes apply to private sales. To control this, overtime regulations were put in place. The tax implications for private sales are different. The HST and other federal taxes have no influence on this. What form of tax is owed will depend on the provincial tax laws. Most provinces will have some laws governing this.

There is still ongoing contention about the taxes. The argument is that the vehicle could go on sale several times and each time there is a tax levy against it. The province decides how much tax is due. But in most cases, it is on the full sale price of the vehicle. Some people desire to make an effort to avoid paying the full amount of tax that they are required to pay. They can try to persuade the vendor to issue them a receipt showing a lower purchase price. The ministry is however aware of this practice.

Buyers of second hand cars in Ontario do not have to pay sales tax to the car dealerships in Mississauga. However, consumers of used cars typically pay RST at a rate of 13%. The sum is determined by the higher of the vehicle’s wholesale value or purchase price. You will require a professional appraisal if the used car for sale you are purchasing in Ontario is 20 years or older. Because in Ontario, you do not have to pay sales tax if you are a Status Indian, buying a secondhand car from a close relative, or getting one as a gift. 

It is crucial to understand that taxes will be due when you are purchasing a used car for sale from private car dealers in Mississauga. The seller is not, however, compensated for these taxes. At the time the vehicle registration is transferred, the unpaid tax is due. Generally, taxes will be charged at a rate of 13%, if Ontario is the location of the transaction. It can be challenging to estimate the cost in its entirety. The sum is deducted from the cost of buying the car.

However, consideration is given to the vehicle’s wholesale worth. The amount subject to tax is whichever of these increases the car’s worth the most. There are additional guidelines for calculating the tax. This implies that an appraisal will be require for these automobiles. Those that purchase vintage or classic vehicles might have to cope with it.

How to Pay Less Tax in Canada When Purchasing a Used Car

If you are trying to find a way to buy a used SUV for sale with fewer taxes, trading in your own used automobile can help you save money on taxes when you purchase a car. The value of your trade-in vehicle is deduct from the price of your new car when you trade it in. Only the smaller sale amount will be subject to tax at that point. Better still? If you are financing your car purchase, it may help you make lower monthly payments in the long run.


Not everyone wishes to purchase a new vehicle. Sometimes your budget simply cannot support the most recent model of the vehicle you require. Or perhaps you simply love the characteristics and appearance of a more age model. Purchasing a used SUV for sale or truck either privately or from any car dealerships in Mississauga could be the solution if you are searching for a nice, trustworthy vehicle for your expanding family or a dependable pick-up truck for your home-base business.

Buyers of a used SUV for sale face a few significant obstacles compared to those of new car buyers. One of these problems is taxes. Tax legislation is continuously evolving. Therefore, it is crucial to read these before a transaction to ensure that everything is in order. Both private car dealers in Mississauga and dealership based sales are cover under it. 

Hence, when purchasing a vehicle, you must take tax considerations into account and you should keep in mind that the ministry will be knowledgeable about the prices of cars. To find out how much tax you must pay when purchasing a secondhand car in Ontario, read this article.

Related Post – How to Sell a Used Car in Ontario