Selling a car with rust damage

The right way to sell a car to a buyer who wants to use it solely for parts

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From the April 2016 issue of the magazine.

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“My car is badly rusted and will never pass a safety inspection. A private buyer is willing to pay me $350 to use it for parts. If the buyer doesn’t register the vehicle in his name, I could be held responsible for any future infractions. Is there a way I can sell to a buyer who has no plans to register it?”

—N. Saravanamoorthy, Peterborough, Ont.

By not transferring ownership, the buyer avoids paying sales tax on the wholesale book value, which is probably a much higher value than your car is worth. If your buyer decides to flip the car to another buyer without transferring the purchase into his own name this allows him to disappear from the ownership history. The record will show a sale from you to a subsequent buyer. Avoid this by paying a small fee at a Service Ontario office and asking them to brand the car irreparable. That will restrict any subsequent buyer from licensing the car for the road.

George Iny is the president of the Automobile Protection Association. Send him your automotive questions at ask@moneysense.ca.

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