The do’s and don’ts for flipping cars in Ontario.

You’re looking for a side hustle and you think you can put your grease monkey skills to good use by flipping used cars on Kijiji. Beware – you’ll soon find yourself treading the fine line between that of a car enthusiast and a curbsider.

Curbsiding is defined as the practice of selling vehicles for profit without a proper license. It is an illegal practice, and one that could get you into serious legal trouble. Curbsiders abound in Ontario – in fact, the Ontario Motor Vehicle Industry Council (OMVIC) estimates that of all classified listings for used cars, 25% are posted by curbsiders. Their listings are often difficult to tell apart from legitimate used car listings, since they tend to look exactly the same. One thing curbsiders tend to have in common is that they are selling cars that are not registered in their personal name.

But what if you want to resell cars and be on the level? If your passion for vehicles reaches a point where you are routinely buying and selling cars, there is a way to register yourself as a dealer and turn your hobby into a legitimate business. It is a fairly involved process, but it can be done.

Here’s what you should do, and not do, to stay out of potential trouble.

Don’t.

Misrepresent yourself.

If you’re buying cars with the intention of reselling them without ever registering them in your name, let’s face it, you’re curbsiding. While some car enthusiasts can and do trade cars regularly, they typically buy them with the intention of using them before moving on to something else. (Selling a used car that’s been registered in your own name is perfectly okay, as long as you follow all the rules.)

Misrepresent the vehicle.

As the seller, you are required to provide a Used Vehicle Information Package (UVIP) to the buyer. The UVIP will show the car’s ownership history along with the mileage at the time of sale. This is done to prevent fraud (along with the classic odometer rollback trick often used by unscrupulous curbsiders.)

Do.

Get your dealer licence.

As of this writing, an OMVIC dealer licence costs $500 a year. There is a formal application process that includes a background check, plus you’ll need to chip in to the OMVIC’s Compensation Fund, which is a consumer protection program. Oh, and you’ll need a properly zoned location for your fledgling business. For more info, check out the OMVIC website.

Complete the automotive certification course.

Before you can legally resell cars as a dealer, you need to complete a certification course and take a multiple-choice test. Georgian College offers both a self-study correspondence course and an on-site course option. To pass the test, you’ll need to get a score of at least 60%.

Stay on the right side of the law.

As a registered OMVIC dealer, you are bound by the Motor Vehicle Dealers Act and the OMVIC Code of Ethics which set out the criteria for registering as a dealer, along with the integrity and compliance standards that need to be met by anyone engaged in the business of buying and selling vehicles.

Finally, just like any other business, you’ll need a GST/HST number, along with business insurance – a car dealer needs a commercial Garage Auto Policy, which typically costs a few thousand dollars a year depending on the business model and sales volume. Here again, the OMVIC website is a trove of useful information.

If you need more tips on selling your car, we’re here to help.

The CAA Auto Advice team provides Members with free automotive advice. If you have questions about car care, buying a new or used vehicle, auto repairs, vehicle inspection, driving costs and more, contact us by phone at: 1-866-464-6448 or email: autoadvice@caasco.ca 

 

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