What you need to know about gifting a car in Ontario this holiday season

By: Brennan Doherty on November 27, 2025

Quick takeaway:

Gifting a car in Ontario requires proper planning for insurance, registration, and paperwork.
New cars from dealerships often include registration, but used cars require the recipient to handle it themselves with proof of insurance, permits, and plates.
Family members can transfer ownership tax-free with a sworn declaration and Safety Standards Certificate, but all paperwork must be done in person at ServiceOntario.
Recipients have 14 days to add the gifted car to their insurance policy, but uninsured recipients must set up coverage before driving.
Gifting a car doesn’t impact insurance rates, but double check the recipient’s policy matches the new vehicle’s needs.

This article has been updated from a previous version.

Holiday season is right around the corner, and so is the rush to find the perfect gift. For some, that gift might have four wheels and take up a lot of space in the garage.

Just like any other retailer, car dealerships have year-end sales, and you might be able to score a sweet deal on an SUV for your spouse or a first car for your newly licensed teen.

Purchasing a vehicle for gifting in Ontario is straightforward — you buy it like any other present. But car insurance and vehicle registration require a little more planning. Here’s what you need to know to make sure the car — and the lucky recipient — are properly insured and registered by Christmas.

How to register a gifted vehicle

All drivers must register their vehicle before properly taking it to the roads. Registering a vehicle means officially listing it with the government, linking it to its owner, and making sure it meets legal and safety requirements. This is important for road use, accountability, and public safety.

The specifics of this process varies from province to province. For example, in Ontario, anyone receiving a new car can only register it after securing insurance. If you buy from a registered dealer, they’ll handle the paperwork for you.

However, if you’re buying a used vehicle, you’ll need to register the vehicle yourself. To do that, you’ll need:

Proof of insurance
The vehicle’s relevant information
The original vehicle permit from the seller
The plate portion of the permit (so the recipient can attach their licence plates)
Proof of purchase
Your driver’s licence

Learn more: How to read a Carfax report

Costs to register a vehicle

In Ontario, vehicle permits cost $32, a new or replacement licence plate is $59. As of 2022, Ontario eliminated licence plate renewal fees for passenger vehicles, motorcycles, and light-duty trucks.

When you transfer the car ownership to its new recipient, they’ll have to register the vehicle in their name. If you transfer the car to a family member, inform them that they’ll need their own proof of insurance, permit, and licence plates.

If they’re a new driver and don’t have plates or insurance, it’ll be up to them to sort everything out before they hit the road. Under Ontario law, a vehicle permit must be updated with a new driver’s details within six days of transferring the vehicle’s ownership.

What about emissions testing? While Ontario no longer requires emissions testing for most passenger vehicles, it’s worth double-checking if the vehicle you’re gifting falls under any exceptions, such as heavy-duty diesel vehicles or older models.

Gifting a car could exempt you from paying sales tax

In Ontario, it costs less to gift a car to a family member than to a friend. This loophole allows someone to give a used vehicle to a member of their family without paying the usual retail sales tax. The government’s definition of “family” includes adopted siblings, in-laws and half-siblings.

To take advantage of this exemption, you’ll need all the usual documents to transfer ownership of the vehicle — proof of insurance, a vehicle ownership permit, and your driver’s licence — on top of a specific sworn declaration document from the Ontario government and a Safety Standards Certificate.

This document requires both the recipient and giver of the vehicle to state their relationship with one another. It also asks the giver for information about when and from whom they originally bought the vehicle. There’s a separate form required if you also want to transfer licence plates.

None of these actions can be completed by mail. If you’re gifting a vehicle in Ontario and want to take advantage of this tax exemption, all the paperwork must be completed in person at a ServiceOntario location.

With a few calls to your insurer and updated paperwork, your gift will be road-ready in time for the holidays.

Read next: 3 car dealership upgrades to avoid

How to insure a gifted vehicle

Insuring a gifted vehicle is simpler than it sounds.

“It would be the same as anybody getting a new vehicle,” says Ashley Kaspar, director of insurance distribution for CAA Insurance. “Typically, you would have about 14 days from the time you get your vehicle in your possession to adding the vehicle to your existing policy.”

In other words, the giver doesn’t need to set anything up with the insurance company in advance of giving the gift — it’s up to the recipient to set up the insurance within two weeks of receiving the vehicle.

Kaspar advises anyone lucky enough to receive a car for Christmas to call their auto insurance provider as soon as possible to make sure they have the coverage they need. This is especially important if the recipient is upgrading from an older vehicle that’s insured to a brand new one over the holidays.

“The coverage you may have had on that older vehicle may not be the same coverage you want on that newer vehicle,” Kaspar says.

For example, if the older vehicle no longer has collision coverage, but your recipient wants that protection for their newly acquired vehicle, the 14-day grace period only covers the existing insurance policy. In other words, if they want collision coverage on the new vehicle, they’ll need to sort it out before getting behind the wheel.

There is one exception to the 14-day grace period, and that is if you’re gifting a car to a family member or friend who doesn’t already have car insurance.

Of course, it is illegal in Canada to drive without insurance, so the recipient will need to set up their own insurance policy if they don’t already have one. Kaspar explains that this can happen if, for example, an elderly grandparent gifts an uninsured grandchild one of their own vehicles.

Even if they’re already listed on the gift-giver’s insurance policy as a secondary driver, they will need to set up their own separate insurance policy if the given car is in their name.

Lastly, does the insurance company need to know that the car was given as a gift? And can that impact someone’s insurance rates? Kaspar says no to both questions.

“There is no difference between if it was a gift or if you’ve purchased it yourself.”

Keep in mind, gifting a car involves more than just a big bow. It also means handling insurance, registration, and paperwork, but with the right steps, you can make sure the lucky recipient drives into the new year stress-free.