Can You Transfer a Car Loan to Another Person in Canada? A Kingston Guide to the Routes and the Ontario Paperwork
If you searched "transfer car loan to another person canada", this guide is written for one situation: you have a car with a loan on it, and someone else wants to take over the car.
Whether a loan can move to another person is set by your loan agreement and your lender, so ask your lender first. If the loan cannot move, the car still can: the other person buys it with their own financing or cash, your loan is paid out, the lien is discharged, and then the ownership changes at ServiceOntario.
This guide walks through four routes, what Ontario's lien and ownership rules say, and the family-gift transfer the Government of Ontario describes for eligible relatives. The rules quoted here are named to their source: the Government of Ontario, the Financial Consumer Agency of Canada or OMVIC.
Jim Thompson Chrysler is a Chrysler, Dodge, Jeep and Ram store on Gardiners Road in Kingston, and nothing here is legal, tax or financial advice. Where a question turns on your agreement, your lender or a separation, we say who to ask.
Key Takeaways
Start with your lender: ask whether your agreement lets the loan move to another person, and what the payout amount is. Ask for both answers in writing.
When the loan cannot move, the car still can. The other person buys it with their own financing, O.A.C., you sell or trade it, or you pay out the loan and give it to an eligible family member.
In Ontario, the lien is the part to clear first. The Government of Ontario's Access Now page, read October 6, 2026, says that when a consumer loan is repaid, the lender is required to register a "discharge" within 30 days.
A family hand-over has its own Ontario route, and the loan still comes first. The Government of Ontario's page on transferring ownership of a vehicle to a family member, read October 6, 2026, says you may be able to transfer ownership to an eligible family member without paying the retail sales tax when the vehicle is given as a family gift, and Jim Thompson Chrysler in Kingston's advice is to have the loan paid out and the lien discharged first, because a tax exemption does not clear a lien.
Both people can start at Jim Thompson Chrysler in Kingston. The owner can begin at Value My Trade or We Buy Cars, and the person taking the car over can apply for financing online, O.A.C., with approval depending on the lender's review.
Can You Transfer a Car Loan to Another Person in Canada?
Whether a loan can move to another person is set by your loan agreement and your lender, so ask your lender first.
Call with the agreement in front of you and ask two questions: does my agreement allow someone else to take over this loan, and what is the payout amount if I settle it instead? Ask for the payout in writing.
OMVIC's vehicle trade-in page says a car buyer who still owes money on a vehicle being traded in should call their lender to obtain the loan payout, the amount still owing. The same call is where any hand-over starts, whoever ends up with the car.
If your lender says your agreement allows a change, follow the lender's written process exactly, because the lender sets it, not the two of you.
If your lender says no, one of the other three routes in the table further down still works, and if your route is a trade, Value My Trade is where to start.
If the other person simply sends you the payment each month, the loan and the agreement you signed stay in your name unless the lender agrees to change it, so ask your lender before you agree to anything like it.
Which Kingston Hand-Over Sounds Like Yours?
Here are three hand-overs, and each one has a route that ends with the car in the right hands and the loan settled.
The Parent and the First Job
Your daughter has just started her first full-time job in Kingston, and the car in your driveway is the one she learned to drive in. You still owe on it, and you would like the keys to be hers by the end of the month.
If you settle the loan and give her the car, the Government of Ontario's family-gift rules may apply to the ownership change. If she is paying you for it, ask ServiceOntario whether the family-gift rules still apply before you plan around them.
Either way, the day it is done she drives a car registered in her own name, and the loan you signed is closed.
The Couple Dividing What They Own
You and your former partner have agreed who keeps what, and one of you is keeping the car that still has a loan on it.
The route starts with a call to the lender about the loan, and the separation agreement itself is a question for your lawyer. Once the loan side is sorted, the ownership change is a trip to ServiceOntario rather than another hard conversation.
The Owner Whose Plans Changed
You took a job in Ottawa and the car now sits in a Kingston driveway, or the second car has not moved since spring, and the payment still comes out every month. A friend or a co-worker would happily take the car.
The route here is a sale: they buy it with their own financing or cash, your loan is paid out, and the car goes to them once the lien is discharged. If nobody you know wants it, trading it in or selling it to a dealership does the same job, and the payment stops when the loan is settled.
What the three have in common is the order: lender first, lien second, ownership third.
What Are the Routes When Someone Else Wants Your Car?
There are four routes, and the right one depends on what your agreement allows and who is paying for the car.
Route | Who applies or acts | What the lender does | What paperwork follows |
|---|---|---|---|
The other person buys the car with their own financing or cash, and your loan is paid out | The person taking the car, with the lender of their choice if they are financing it, O.A.C. | Your lender gives you the payout amount, receives the payout and registers the discharge of its lien | Your lender's written payout, a bill of sale, the ownership transfer at ServiceOntario and, in a private sale, the used vehicle information package |
You trade the car in or sell it to a dealership, and the loan balance is settled in the deal | You, with the dealership; with us, start at Value My Trade | Your lender gives the payout amount; OMVIC says dealers are required to remove liens on trade-ins as soon as possible | Your ownership permit and your lender's contact and account details, plus the dealership's own paperwork |
Your lender agrees to a change under your agreement | You first, then the person taking over, each dealing with the lender | Decides, under your agreement, whether anything other than a payout is possible | Whatever the lender puts in writing, plus the ownership transfer at ServiceOntario |
You pay out the loan and give the car to an eligible family member | You pay out the loan; the family member receives the car | Receives the payout and registers the discharge of its lien | The Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario, plus the documents the Government of Ontario's family transfer page lists |
The payout, any loan fees and any financing terms come from your agreement and the lender, so get them in writing, and the person taking the car over can apply for financing online, O.A.C.
What Should Happen in Ontario Before the Car Changes Owners?
Two things should happen in a private sale or a family hand-over, in this order: the lien registered for your loan should be cleared, and then the ownership should be transferred at ServiceOntario.
Why the Lien Comes First
The Government of Ontario's Access Now page says the Personal Property Security Registration system allows a notice of security interest or lien to be registered on personal property, such as cars, that was used as collateral to obtain a loan.
The Financial Consumer Agency of Canada's page on car liens says liens stay registered on your car until you've paid your debt in full.
The Government of Ontario's used vehicle information package page describes lien information this way: a lien claimant has a right to the car or the amount of the lien from the buyer of the vehicle once the transfer is completed. That line is the reason we would settle the loan before the car goes to anyone.
When a consumer loan is repaid, the lender is required to register a "discharge" within 30 days, according to the Government of Ontario's Access Now page. Ask your lender for written confirmation that the discharge has been registered, and keep it with the ownership.
Checking for a Lien Yourself
The Financial Consumer Agency of Canada says you may search for a lien on a used car through personal property security searches, and the Government of Ontario's Access Now page says you can also search to see if a lien is registered on Access Now.
If you are the one taking the car over, the Government of Ontario's Access Now page says that if there is an outstanding loan, the consumer may either decide against completing the sale or require the seller to arrange for payment of the loan as well as registration of a discharge.
The Ownership Transfer at ServiceOntario
The Government of Ontario's buy or sell a used vehicle page says that when you sell, you give the buyer the used vehicle information package, a signed bill of sale, a completed and signed Application for Transfer from the back of the ownership permit, and a Safety Standards Certificate if one is required.
The Government of Ontario's buy or sell page also says the buyer must register their name as the new owner within six days of the purchase.
In a private sale, the seller is legally required under the Highway Traffic Act to provide the buyer with a used vehicle information package, according to the Government of Ontario's buy or sell page. Our guide to the used vehicle information package covers what it shows and what it leaves out.
A Look-Over Before the Keys Move
A car changing hands is a sensible moment to find out what it needs, so the new owner starts with a clear picture rather than a surprise.
Book a service appointment online and ask our service team what a look-over before a change of owner would involve.
How Do I Transfer a Car to a Family Member in Ontario?
You transfer it at a ServiceOntario centre, and the Government of Ontario's page on transferring ownership of a vehicle to a family member, read October 6, 2026, says you may be able to transfer ownership to an eligible family member without paying the retail sales tax when the vehicle is given as a family gift. The Government of Ontario's family transfer page also says you will still need to pay the vehicle registration fees.
Settle the loan side first. A tax rule does not discharge a lien, and the Financial Consumer Agency of Canada says liens stay registered until the debt is paid in full.
Who Counts as Family for This Transfer
The Government of Ontario's family transfer page lists these eligible family members:
spouse (including a common-law spouse)
parent or step-parent
grandparent or step-grandparent
son or step-son, and daughter or step-daughter
grandson or step-grandson, and granddaughter or step-granddaughter
son-in-law, daughter-in-law, father-in-law and mother-in-law
sibling, half-siblings (siblings with a common parent) and adopted siblings (siblings with a common parent through adoption)
If the person you are giving the car to is not on that list, ask ServiceOntario before you plan around the exemption.
The Sworn Statement and What to Bring
The Government of Ontario's family transfer page lists these documents:
the Sworn Statement for a Family Gift of a Used Motor Vehicle in the Province of Ontario, which a Commissioner of Oaths may charge a fee to commission
proof of Ontario vehicle insurance
an Ontario driver's licence
the vehicle ownership permit with the back portion completed
a Safety Standards Certificate, which the Government of Ontario's family transfer page says is not required for spouse-to-spouse transfers, but you must complete a spousal declaration
The Government of Ontario's family transfer page says only one exempt transfer of the same vehicle, between family members, is allowed within a 12-month period.
Before a family transfer, check for a lien through Access Now, the same search a buyer would run.
When the Hand-Over Is Part of a Separation
The Government of Ontario's family transfer page says that if the vehicle acquired from a spouse or former spouse was part of a settlement under the Family Law Act, it may be exempt from the retail sales tax, and that a supporting document stating the vehicle was part of the settlement is required.
What a separation agreement means for the car and the loan is a question for your lawyer, and the loan itself is a question for your lender.
Who Is This Guide Not For?
Four readers need a different page or a different professional, and we would rather say so here.
If your car is leased rather than financed, a lease is a different agreement, and whether it can be handed to someone else is written in that agreement. Our lease vs finance guide has a section on getting out of a lease early.
If your real question is about financing a car of your own with a credit history you are worried about, that is a separate subject, and the honest first step is to apply for financing, O.A.C.
If someone has asked you to co-sign so they can take over a car, read the agreement and ask the lender exactly what co-signing would commit you to before you sign.
If the hand-over is part of a separation or an estate, a lawyer is the right first call, with the lender and ServiceOntario after that.
Financing and Trading In When You Want to Transfer a Car Loan, O.A.C.
The person taking the car over can apply for financing online, O.A.C., and the owner can start at Value My Trade or We Buy Cars if the car is going to a dealership instead.
For the Person Taking the Car Over
Financing is available on the vehicles we sell, O.A.C., and approval depends on the lender's review of your application, so no outcome is promised before it has been reviewed.
Whether financing can be arranged on the specific car you are taking over from someone else, rather than one from our inventory, is a question to ask our team before anyone signs anything.
If the car you were offered turns out not to suit you, our used inventory and our new inventory are where to look next, and Build and Price is a place to start on a new one.
For the Owner Handing It Over
See what your current vehicle is worth online first, and ask our team how a vehicle with a loan on it is handled as a trade-in.
If you would rather sell than trade, We Buy Cars is the place to start. Bring your lender's details and a written payout statement either way.
OMVIC's vehicle trade-in page says OMVIC's Code of Ethics, the Consumer Protection Act and the Sale of Goods Act require dealers to remove liens on trade-ins as soon as possible.
OMVIC's vehicle trade-in page also says that if a dealer offers to make the monthly loan payments on a trade-in, rather than pay off the loan in full, you should understand this is a significant risk and contact OMVIC at once.
If You Owe More Than the Car Is Worth
If you owe more on the car than it is worth, that difference may be added to the amount financed on your next vehicle, O.A.C., increasing the amount borrowed and potentially the total cost of borrowing.
The Financial Consumer Agency of Canada's page on the financial risks of buying a car says that if you sell a car worth less than what you owe on your car loan, you might have to borrow money to cover the difference.
The difference is a conversation better had at a desk with your payout statement in front of you, and you can apply for financing before you visit, O.A.C.
Why Bring a Car Loan Transfer Question to Jim Thompson Chrysler in Kingston?
Because both people in a hand-over can start in one building on Gardiners Road: the owner with a trade or sale question, and the person taking the car over with a financing application, O.A.C.
Jim Thompson Chrysler is a Chrysler, Dodge, Jeep and Ram store at 805 Gardiners Road in Kingston, and our live inventory shows what is currently available.
What we do:
Talk through which of the four routes fits your situation before anyone signs anything.
Start the trade or sale conversation from Value My Trade or We Buy Cars, with your lender's details in hand.
Take a financing application from the person taking the car over, who can apply for financing online, O.A.C.
Put a used and a new vehicle side by side if the hand-over turns into a fresh start for either of you.
Frequently Asked Questions
Can Someone Take Over My Car Loan in Canada?
Whether a loan can move to another person is set by your loan agreement and your lender, so ask your lender first. If the loan cannot move, the other person can buy the car with their own financing, O.A.C., and your loan is paid out.
How Do I Transfer a Car to a Family Member in Ontario?
Settle any loan first, then transfer ownership at a ServiceOntario centre using the family gift sworn statement. The Government of Ontario's family transfer page, read October 6, 2026, says you may be able to transfer ownership to an eligible family member without paying the retail sales tax when the vehicle is given as a family gift.
What Happens to the Lien When a Car Loan Is Paid Off in Ontario?
The Government of Ontario's Access Now page, read October 6, 2026, says that when a consumer loan is repaid, the lender is required to register a "discharge" within 30 days. Ask your lender for written confirmation that it has been registered, and keep it with the ownership papers.
Can I Trade In a Car I Still Owe Money On at Jim Thompson Chrysler?
The answer depends on the car and the loan, so ask Jim Thompson Chrysler in Kingston how it is handled and start at Value My Trade. If you owe more than the car is worth, the difference may be added to the amount financed, O.A.C., increasing the amount borrowed and potentially the total cost of borrowing.
Can the Person Taking Over My Car Apply for Financing at Jim Thompson Chrysler?
Yes, they can apply for financing online through Jim Thompson Chrysler's credit application, O.A.C., and approval depends on the lender's review. Whether financing can be arranged on your particular car, rather than one from our Kingston inventory, is a question to ask our team before anyone signs.
Find Your Car Loan Transfer Route in Kingston
Call your lender first, get the payout in writing, and then choose the route: the other person's own financing, a sale or trade to a dealership, a change your lender agrees to, or the family transfer.
See what your current vehicle is worth, and if someone is taking the car over, they can apply for financing, O.A.C., so both sides are moving.
Browse our used inventory or our new inventory if the hand-over turns into a new start for either of you.
Then come and see us on Gardiners Road, just off Highway 401, whether you are coming from downtown, the west end, Amherstview, Odessa, Napanee or Gananoque.
Visit us at 805 Gardiners Road, Kingston, ON K7M 7E6
Browse inventory online, value your trade, apply for credit approval, O.A.C., book service, or contact our team.
Local: (613)-389-4426 Sales: (877)-251-9249 Parts: (888)-711-5309 Service: (888)-713-0742
About the Author:
Kerry Irven is the Vice President of New and Used Automotive Operations for Heighton Automotive Group, a family-owned and operated automotive group serving communities across Eastern Ontario. Kerry began his automotive career in new-car sales, building his experience on the showroom floor and working his way through multi-store dealership operations.
With over 25 years in the automotive industry, Kerry has helped grow automotive businesses from one location with 40 to 50 vehicles in stock to more than 500 vehicles across 10 rooftops. His hands-on background in both new and used-vehicle operations gives him a practical understanding of what customers look for when shopping for their next vehicle.
Throughout his career, Kerry has always been actively involved in staff coaching and in understanding customer wants and needs, helping ensure the businesses he works with continue to adapt to what customers are truly looking for.
One of the most exciting chapters of his career has been the shift into modern automotive marketing, embracing new technology, transparent pricing, customer-first inventory strategies, and new ways to create a better vehicle-shopping experience.
Kerry has completed extensive automotive training, including certification through the Ontario Motor Vehicle Industry Council, involvement with the Used Car Dealers Association of Ontario, Canadian automotive dealer training, and multiple customer service courses.
Born and raised on a farm, Kerry has always valued family, hard work, and a practical, down-to-earth approach. Joining Heighton Automotive Group and working alongside Thomas Heighton and family, along with managing partners Kyle Lothian and Martin Gougeon, has allowed him to bring those same values into the car business. It has also allowed Kerry to continue following a simple philosophy: treat every customer exactly the way he would want to be treated.
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