Sale of Road Vehicles for the purpose of accommodating

If a person purchases a new road vehicle from a dealer and wishes to sell his or her old vehicle to a third party, the person can ask the dealer to act as an intermediary and carry out the transaction. This type of sale constitutes a "sale for the purpose of accommodating" (that is, a sale involving a third party).

Selling the old vehicle through a dealer and buying a new vehicle allows the person to pay GST and QST on the difference between the following amounts:

  • the price of the new vehicle
  • the credit obtained for the sale of the old vehicle

If the dealer does not act as an intermediary in the sale, the person must pay GST and QST on the full price of the new vehicle.


A dealer sells a new vehicle to Mr. Dufour for $30,000.

Mr. Dufour owns a used vehicle that has an estimated value of $12,500. He sells that vehicle for $10,000 to another person.

Mr. Dufour is not obliged to:

  • collect GST
  • calculate or collect QST

The transaction is carried out through the dealer as a "sale for the purpose of accommodating."

Sale of the new vehicle
Selling price$30,000.00 
Credit for the trade-in- $10,000.00
GST ($20,000 × 5%)+  $1,000.00
QST ($20,000 × 9.975%)+ $1,995.00
Amount payable$22,995.00
Purchase of the used vehicle by the dealer
Selling price$10,000.00
(does not apply because Mr. Dufour is not registered for the GST or the QST)
(does not apply because the dealer is not registering the vehicle)
Sale of the used vehicle by the dealer
Selling price$10,000.00
GST ($10,000 × 5%)+ $500.00
Calculation of the QST
Vehicle's estimated value (higher than the selling price)$12,500.00
QST ($12,500 × 9.975%)+ $1,246.88+ $1,246.88
QST is calculated by the vendor, but it is paid by the purchaser when the vehicle is registered.

Estimated value

The estimated value rule must be applied to the sale of a used road vehicle involving a third party.

However, this rule does not apply to a used vehicle accepted as a trade-in under this type of sale. In such cases, the exchange value agreed on by the parties must be used.

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