If you’re buying a new car in Alberta, then you will need to make sure that the ownership of the vehicle is transferred to you. Just like how you will also need to register your car and purchase Alberta car insurance, transferring ownership of the vehicle is a necessary part of the process. Read on to learn more about this critical process and the purpose of vehicle ownership.
Why vehicle ownership matters
Vehicle ownership, which is another term for vehicle title or vehicle permit, is a document that proves the vehicle you own is, in fact, yours. If you are ever pulled over by a law enforcement officer, they will ask to see the title to your vehicle. Thus, anytime you buy a car, whether it’s new or used, and whether it’s from a dealership or from a private seller, you will need to make sure that the ownership of the car is transferred to you before the deal is done.
Vehicle registration vs. vehicle ownership
Please note that vehicle registration and ownership are not the same. In fact, there are several key differences between title and registration.
Vehicle registration is when you register your vehicle with the transportation agency in your province, and if accepted, your vehicle will be registered. In turn, this proves that your car has been acknowledged as meeting the requirements for operating a vehicle on Canadian roads. All vehicles driven on public roads in Alberta must be registered.
However, in order to register your vehicle, you need to have a vehicle permit or vehicle ownership document first. Otherwise, the province of Alberta would not allow you to register your car legally. Unlike vehicle registration, vehicle ownership is proof that the car in question is legally yours.
Information you will find on a vehicle ownership document in Alberta
When you obtain a vehicle ownership document from a seller in Alberta, you should review it to make sure that it contains the following pieces of information:
- Your legal name and home address
- Your licence plate number
- The vehicle identification number (VIN)
- The make and model of the vehicle
- A portion of your licence plate sticker
When do drivers need to show proof of car ownership in Alberta?
There are a few situations when a driver will need to show proof of car ownership in Alberta. They include:
- When you’re selling your car
- When you’re replacing a lost, stolen, or compromised licence plate in Alberta
- If you need to transfer ownership of the vehicle to another driver, such as to a family member
- If you are pulled over by a law enforcement officer who asks for your vehicle ownership
- When you register your vehicle
Is it legal to drive without valid vehicle ownership in Alberta?
No. In fact, it is illegal to drive without valid vehicle ownership in Alberta. Thus, you must obtain the vehicle title before getting behind the wheel. If you are caught operating a car without the correct ownership documentation, you can receive a fine of up to $230. For this reason, it’s good practice to keep your vehicle permit in your car at all times. Many drivers prefer to keep it in the glove box, but as long as it’s somewhere in your car and you can easily show it to a law enforcement officer when asked, you can avoid a fine.
Transferring vehicle ownership in Alberta
Once you have decided that you would like to purchase a new car, the transferring of vehicle ownership process can begin.
Thankfully, this process is fairly simple. To ensure it goes as smoothly as possible, just make sure that you have a payment method ready to go and that you have the necessary documents and information needed for the transfer to be complete. Just as there are documents you need for car insurance, there are also documents that you need for the transfer of vehicle ownership in Alberta.
As the buyer purchasing a car from a private seller, follow this step-by-step guide to ensure your vehicle ownership transfer goes off without a hitch:
1. Check the VINs
First, make sure that the vehicle identification number of the car matches the vehicle identification number listed on the Used Vehicle Inspection Report.
2. Verify that the bill of sale portion has been filled out
Next, check that the bill of sale portion of the Used Vehicle Inspection Report has been completed. It is the seller’s responsibility to complete this section of the form. Specifically, double-check that the Application of Transfer portion of the bill of sale is filled out.
3. Pay the necessary taxes and other fees
The third step is to pay the required taxes and fees, which the seller can outline for you, or you can research yourself by reaching out to the Ministry of Transportation in your province.
4. Show proof of valid Alberta liability insurance
Next, you will need to provide proof of your car insurance policy, which is mandatory in Alberta. Specifically, you will need to show that you purchased a policy that contains at least $200,000 in third-party liability car insurance. If you need help finding the right insurance coverage, reach out to an insurance broker in Alberta.
Updating your auto insurance policy after you change cars
When you are in the process of buying a new car, you probably have a lot on your mind. In addition to deciding which car is right for you and thinking about how to navigate the vehicle ownership transfer process, you will also need to consider what type of car insurance you need.
As mentioned above, showing proof of your valid Alberta car insurance policy is a necessary part of the ownership transfer process. This is because Alberta car insurance is mandated by the government throughout the province.
If you already owned a car previously, then you likely have an insurance policy. In this case, if you would prefer to stick with your current provider and policy, then all you will need to do is notify your insurance company about your new car.
Please note that informing your insurance company of any changes that could impact your insurance, such as a change in your vehicle, vehicle modifications or changes, a change in address, or a change in marital status, is required. It is written in the Auto Insurance Consumers’ Bill of Rights, and the reason for this is that changes to your car or address could impact your risk level and, therefore, your insurance rates.
Thus, your insurance company has a right to know about these types of updates. If you fail to notify your insurance company about your new car and they later find out, they could cancel your policy or deny any future claims due to fraud or misleading information.
Grace periods for car insurance
Although it’s best to update your car insurance policy with your new car’s information as soon as possible, most insurance providers offer a grace period of 10 or 14 days. This means that you have about a two-week window to get your ownership and registration details sorted before you notify your insurance company, and you can still be covered during this time.
Find out if your insurance company offers a grace period by contacting them directly. Remember that if you fail to update your car insurance policy within this grace period and you need to file a claim, your insurance provider could deny your claim.
How updating your car insurance with your new vehicle information could impact your policy
Many customers are quick to assume that notifying their insurance company about their new vehicle will lead to an increase in their car insurance rates. The reality is that it could go either way. There are plenty of circumstances in which updating your car insurance policy with your new car could actually save you money on car insurance.
This is because insurance companies will consider a multitude of factors when calculating your premium. From your age and claims history to your driving record and gender, tons of details come into play when premiums are calculated. There are even several car-specific factors, like the vehicle's value, the vehicle's horsepower, the vehicle's safety rating, the vehicle's average repair costs, and the vehicle's theft rate. All of these factors - and more - will be considered by your insurance company when they update your premium.
If they find that your new car is safer to drive, has lower repair costs, and has a lower theft rate, you may end up with a cheaper premium than before!
Insurance tips before buying a new car in Alberta
Before investing in a new car in Alberta, follow the tips below to ensure you get the most out of your insurance policy:
Determine your insurance needs
Your car insurance needs will change over time, so when you buy a new car, it’s a good idea to assess whether your existing coverage is still working for you. For example, if you are buying a used vehicle that’s older, whereas you previously owned a brand-new vehicle, then you may not need certain types of additional coverage like comprehensive car coverage or collision car insurance. Depending on the value of the car you're buying, these coverage types might not be worth it. Alternatively, you might decide that you can now afford to raise your deductibles, which could help you reduce your premium. If you decide to adjust your policy, just make sure that you still meet the minimum coverage requirement in Alberta. All Alberta motorists must have policies that contain the following coverages:
Shop around for affordable auto insurance coverage
To make sure that you find the most affordable coverage possible, whether you’re looking for your first-ever policy or your fifth policy, shopping around is key. This is the only way to ensure that you’re getting the best possible price for your coverage.
An insurance broker at BrokerLink can help you shop around by reaching out to some of the top insurance companies in Alberta and obtaining quotes on your behalf. From there, we can compare the policy options available to you and present you with the best ones based on your budget, driving habits, and insurance needs.
Whether you’re looking for a basic car insurance policy or an enhanced policy that features extra protection like accident forgiveness coverage, we can help. We can also give you an idea of how much car insurance costs per month in Ontario or Alberta so that you can go into it with a realistic idea of the price of your policy.
Read through leasing and financing contracts carefully
If you end up leasing or financing your next car, make sure that you review these contracts carefully. While there are many terms and conditions to be aware of, we want you to pay particular attention to the insurance requirements listed in the contract. Many leasing companies require drivers to purchase car insurance beyond basic coverage in Alberta. For example, some lenders stipulate that the borrower must have valid collision and comprehensive insurance coverage throughout the duration of the lease.
Get insured before picking up your vehicle
Even if your insurance company offers a grace period, it’s best to finalize your insurance policy before you pick up your new car. This way, you will have peace of mind knowing that you are insured from the second you get behind the wheel of your new car.
Get in touch with BrokerLink to learn more
Still have questions about the vehicle ownership transfer process in Alberta? Reach out to BrokerLink today. We can offer insight into the importance of transferring ownership from one owner to another, as well as how to do this.
Plus, as car insurance experts, we can make sure that you have the right coverage for the ownership transfer to go off without a hitch. We can also help you with renewing your car insurance in the future or even filing an insurance claim after you report a car accident.
Reach out to BrokerLink today to learn more and obtain a free car insurance quote.
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