AUTO-SELLING SNAGS
Never hand over a car in a private sale without the buyer’s ownership papers signed and approved,
Sadia Malik left Canada for Pakistan in 2013. But she’s still getting grief about the car she sold for $1,200 before leaving the country.
She recently received a $5,000 towing and storage bill from a Toronto credit collection agency. As she learned, the new owner did not register her car at the time of sale and abandoned it later on.
“I should not be held responsible for these charges because I have been a victim of fraud,” she told the towing firm before it sent a collection agency after her.
“I used to live in Canada in subsidized housing on social assistance. I became a widow with two minor children and now live with my mother overseas. I have no income and poor health, which keeps me out of the workforce.”
Malik’s dilemma highlights an issue with a private sale. Buyers are supposed to transfer ownership of the vehicle to their own names — but if they fail to do so, sellers can be held liable for new charges.
John Pettitt also had a private sale come back to haunt him. He sold his car for $800 in 2008 to a buyer found online and received a $798 bill from a towing firm five years later.
He followed instructions in his used-vehicle information package, which said to give signed documents to the buyer to take to the registry office.
“It did not say you have to ‘frog march’ the purchaser there,” he told me when I wrote a column in 2013.
The towing firm, which also billed Malik, agreed to waive Pettitt’s bill after I intervened in 2013. I advised Malik to use my name when appealing for help. “Your reference and a complaint to the Better Business Bureau did the trick,” she said. “They wrote off the amount, but I want them to correct my credit bureau reports. I had an impeccable score, which was damaged by this.”
Many private sellers are not aware that vehicles are still registered to them until the ownership is actually transferred. Does the Ontario government do enough to warn them?
Bob Nichols, an Ontario transport ministry spokesman, said Pettitt’s concerns were taken seriously and led to updates in the used vehicle information package (UVIP) coming this fall.
In particular, buyers are told they must register the used vehicle within six days of the sale. This involves bringing the proper paperwork to a licence issuing office, paying retail sales tax, plate and permit fees, plus showing proof of insurance and vehicle safety.
Sellers are told they have the “option” of visiting a Service Ontario centre to report their used vehicle as sold — providing a letter with the buyer’s and seller’s name, date of sale and vehicle information number or VIN.
Pettitt wants to see more information for private sellers about the risk of legal liability for the misdemeanours of buyers, collection actions and credit downgrades. He’s become a fighter for consumer rights.
“Newfoundland gives an explicit warning to private sellers of used cars. Why can’t Ontario?” he asks.
In that province, private sellers have to notify the government within 10 days of a vehicle sale or face a fine. Reporting is mandatory and not optional.
“If the vehicle remains in your name, you may receive the traffic fines that were issued to the new owner. Should an accident occur, you could be financially responsible if the new owner has not obtained insurance,” Newfoundland tells private sellers.
“Remember to protect yourself and submit a notice of sale. Never depend on the purchaser to transfer ownership.”
That’s great advice for private sellers. Never hand over a vehicle until the buyer comes back from a Service Ontario office with the signed and approved transfer of ownership papers. Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca or ellenroseman.com.