For those buying bikes for "$100" declared on bill of sale

adri

adri

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Will the insurance companies ever look at what you declared the vehicle purchase for?

i.e. buy a bike for $2k, put $1k into it to get it up to spec / market cost / average condition.
Will they appraise it as a $3k bike (estimated market average) or will they appraise it as a $2k POS?

Please share thoughts and stories, thanks!
 
Despite what you paid for it, they're always going to give you the average market value.
 
So based on your statement, if I buy a bike for 5K and even pay tax based on 5K, I am better off to tell insurance it costed me 500$?

Since it probably will cost me more to insure it if I mention a higher price, though at the end they will pay me average market value of the bike should it be stolen regardless.
 
koorosh said:
So based on your statement, if I buy a bike for 5K and even pay tax based on 5K, I am better off to tell insurance it costed me 500$?

Since it probably will cost me more to insure it if I mention a higher price, though at the end they will pay me average market value of the bike should it be stolen regardless.
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If you pay 5k and the tax on 5k, you will get no benefit from telling them you paid $500.
If you pay $500 for a $4000 (market value) bike and write it off you will get $4000.
They don't take into effect what you paid for the bike just what the bike is worth in market value.
I payed $4200 for my bike, it got backed into and they offered me $4,900+tax for a write-off or a cheque for $3,700 to repair it myself.
 
You could always pay $100 for an appraisal to back it up. But what do you want it for, theft or collision? Unlikely a $3000 bike will get stolen. I would never pay the full coverage premiums for a $3000 bike.
 
adri said:
Will the insurance companies ever look at what you declared the vehicle purchase for?

i.e. buy a bike for $2k, put $1k into it to get it up to spec / market cost / average condition.
Will they appraise it as a $3k bike (estimated market average) or will they appraise it as a $2k POS?

Please share thoughts and stories, thanks!
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insurance only cares about the value of the bike at the time of incident.
what ever they deem your bike to be worth as fair market value is what you get.

how is fair market value assessed?
online ads (auto trader/kijji/GTAM)
comparing year/model/make/usage/ability to prove condition prior to incident.
 
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RetroGrouch said:
You could always pay $100 for an appraisal to back it up. But what do you want it for, theft or collision? Unlikely a $3000 bike will get stolen. I would never pay the full coverage premiums for a $3000 bike.
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Where can you get appraisals done? Called a few shops no one did them
 
I just bought my 2009 Ninja 250r today on paper for $1500. And, on the 'Vehicle Transfer Receipt' that I obtained, it says:​

"The purchaser or purchaser's agent is responsible for the accuracy of the purchase price, which is subject to examination by the ministry. In addition to any unpaid tax, the Retail Sales Tax Act provides for a penalty equal to the unpaid tax plus interest on the total amount."

And on http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#buying , it says:

"Pay the retail sales tax. At the time of the transfer, the Driver and Vehicle Licence Issuing Office collects the tax. The amount of tax is based on the purchase price or the wholesale value, whichever is greater"

Did anyone have the MTO follow up on this ?​
 
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They send letters that mysteriously end up lost in transit. They want their lb of flesh on resale of a used item? I say fornicate them and the horses they rode in on :cool:
 
whetaus-tr said:
I just bought my 2009 Ninja 250r today on paper for $1500. And, on the 'Vehicle Transfer Receipt' that I obtained, it says:​

"The purchaser or purchaser's agent is responsible for the accuracy of the purchase price, which is subject to examination by the ministry. In addition to any unpaid tax, the Retail Sales Tax Act provides for a penalty equal to the unpaid tax plus interest on the total amount."

And on http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#buying , it says:

"Pay the retail sales tax. At the time of the transfer, the Driver and Vehicle Licence Issuing Office collects the tax. The amount of tax is based on the purchase price or the wholesale value, whichever is greater"

Did anyone have the MTO follow up on this ?​
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There's no "WHOLESALE VALUE" for motorcycles in Ontario. You pay what's on the receipt as long as both the seller and buyer come up with the same number when asked.
 
whetaus-tr said:
I just bought my 2009 Ninja 250r today on paper for $1500. And, on the 'Vehicle Transfer Receipt' that I obtained, it says:​

"The purchaser or purchaser's agent is responsible for the accuracy of the purchase price, which is subject to examination by the ministry. In addition to any unpaid tax, the Retail Sales Tax Act provides for a penalty equal to the unpaid tax plus interest on the total amount."

And on http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#buying , it says:

"Pay the retail sales tax. At the time of the transfer, the Driver and Vehicle Licence Issuing Office collects the tax. The amount of tax is based on the purchase price or the wholesale value, whichever is greater"

Did anyone have the MTO follow up on this ?​
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Yes they do. As mentioned here there is no wholesale value for motorcycles in ontario that the tax is based on. It's calculated from the value on the bill of sale whether it's $5000 or $500. However because this purchase price is based on your word, the documents that you bring to MTO to do the orginal transfer and pay tax on will be double check by MTO. They will send both you and the seller a document requesting the sale value of the item sold. It must match what you originally said, what you said later & what the seller said so make sure you all have the same number.

The pernalty is the difference in the tax owed x 2. (example if you owe tax on an additional $200, you will be charged and additional $200 for a total of $400 as the difference & a pentaly) Nothing goes on record or blacklisted or anything like that it's just a finacial penalty. I found out the hard way a couple years ago.
 
whetaus-tr said:
I just bought my 2009 Ninja 250r today on paper for $1500. And, on the 'Vehicle Transfer Receipt' that I obtained, it says:​

"The purchaser or purchaser's agent is responsible for the accuracy of the purchase price, which is subject to examination by the ministry. In addition to any unpaid tax, the Retail Sales Tax Act provides for a penalty equal to the unpaid tax plus interest on the total amount."

And on http://www.mto.gov.on.ca/english/dandv/vehicle/used.shtml#buying , it says:

"Pay the retail sales tax. At the time of the transfer, the Driver and Vehicle Licence Issuing Office collects the tax. The amount of tax is based on the purchase price or the wholesale value, whichever is greater"

Did anyone have the MTO follow up on this ?​
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I did I wont explain the details but I now mark the bill of sale when selling the vehicle correct and make sure the seller does so as well.
 
rbjeepthing said:
I did I wont explain the details but I now mark the bill of sale when selling the vehicle correct and make sure the seller does so as well.
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The ministry sends out a letter about the price to you .. you throw it away like mentioned above.

If you didnt than its your own fault .. if not it was the seller who told them than what you really paid.
 
rbjeepthing said:
I did I wont explain the details but I now mark the bill of sale when selling the vehicle correct and make sure the seller does so as well.
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This is a forum, last time I checked. Why bother posting (except to gloat) if you're not going to share the information. ??

Facepaw.jpg
 
My friend bought a bike for $500, and the owner's manual for $3,900.
Pretty expensive owner's manual, but he got a great price on the bike. Taxes paid: $65.
 
Skyler said:
This is a forum, last time I checked. Why bother posting (except to gloat) if you're not going to share the information. ??
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Because details could incriminate me anymore then it already has. The user I quoted in my post asked if anyone ever had MTO follow up on it not what the details were. I answered the users question fully.

Oh and to ad
funny-meme-macros-bearly.jpg
 
I bought my first bike for a lower than market value and the ministry of finance sent me a letter asking for proof. I mailed them back a copy of the bill of sale. I never heard from them again. I emailed the previous owner and they said they never heard anything from the ministry either.

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what a stupid system, paying taxes on a private sale. good job motorcycles are exceptment from blue book values. the mto ( big brother ) already got their tax money on the sale when new. just make sure the buyer and seller agree to say the same thing, should this happen. i like the service manual price, that works for sure.
 
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