Executing a Used Car Sale and Purchase Agreement and Registering the Vehicle to the New Owner

The practice of buying a used car is very common in Ukraine. Many who wish to buy or sell a used car have questions regarding the procedure for concluding a sale and purchase agreement and re-registering the car to a new owner. In this article, we describe the key points and provide answers to frequently asked questions related to car sale and purchase.

What a Car Sale and Purchase Agreement Must Contain

A car sale and purchase agreement (hereinafter – the Agreement) – is a standard agreement for the sale and purchase of movable property, the terms of which are regulated by Chapter 54 of Subsection 1 of Section 3 of the Civil Code of Ukraine (hereinafter – CCU). In accordance with the provisions of the CCU, the agreement must be concluded in written form and must contain the following essential terms:

• subject matter of the agreement (it is worth detailing the car's characteristics: model and make, color, year of manufacture, engine capacity, mileage, frame or body number, etc.)
• price
• procedure for transferring the vehicle.

The parties are entitled to determine other terms at their discretion.

What are the Ways to Conclude a Car Sale and Purchase Agreement

Although the CCU does not require notarization of a vehicle sale and purchase agreement, an agreement concluded in an arbitrary form will be invalid. This is evidenced, in particular, by judicial practice.

The Supreme Court, composed of the panel of judges of the First Judicial Chamber of the Civil Cassation Court, when considering case No. 145/145/17 in its Resolution of January 22, 2019, established that the fundamentally important components of an agreement include its content and form, as well as the method and place of its conclusion. This conclusion is substantiated by the provisions of CMU Resolution No. 1200 “On Approval of the Procedure for Wholesale and Retail Trade in Vehicles and Their Component Parts Having Identification Numbers”. The Resolution clearly states that the execution of sale and purchase agreements for vehicles and their component parts having identification numbers on commodity exchanges is carried out using registered (respectively, in the territorial service center of the Ministry of Internal Affairs and the State Service of Ukraine for Food Safety and Consumer Protection) exchange agreement forms with the direct presence of administrators of such bodies.

The parties may, if desired, notarize the Agreement, or do so during vehicle re-registration directly at the Ministry of Internal Affairs service center.

A notary verifies the Agreement for compliance with the current legislation of Ukraine and checks the car for encumbrances in the Unified State Register of Encumbrances of Movable Property (USREMP).

The conclusion of the Agreement at the Ministry of Internal Affairs service center (hereinafter - SC) takes place in the presence of a center employee. After the Agreement is certified by the SC employee, direct re-registration of the vehicle to the new owner is carried out.

What is the Procedure for Vehicle Re-registration

CMU Resolution No. 1388 of September 7, 1998 on the Procedure for State Registration (Re-registration), Deregistration of Cars, Buses, as well as Self-propelled Machines Constructed on Car Chassis, Motorcycles of All Types, Makes and Models, Trailers, Semi-trailers, Motor Carriages, Other Equivalent Vehicles and Mopeds (hereinafter - CMU Resolution No. 1388 of September 7, 1998 / the Procedure) stipulates that owners of vehicles and persons operating such vehicles on legal grounds are obliged to register (re-register) vehicles within 10 days after acquisition (receipt) or customs clearance, or temporary import into the territory of Ukraine, or the occurrence of circumstances that are grounds for making changes to registration documents.

Registration (re-registration) is carried out directly at the Ministry of Internal Affairs service centers.

Thus, for car re-registration, it is necessary to contact the territorial service center, providing the package of documents stipulated by paragraph 8 of the Procedure, namely:

• application from the owners, submitted in person or by an authorized representative, which is filled out on-site at the SC
• documents identifying the seller and buyer (passport and identification code) and/or confirming the representative's authority (notarized power of attorney)
• vehicle registration certificate (technical passport)
• document certifying the acquisition of the vehicle.

What Other Documents Need to Be Added

• payment documents for administrative service fees
• in case of sale/exchange of more than 1 vehicle during the reporting (calendar) year, it is necessary to provide the appraised or average market value of the vehicle and a document confirming payment of income tax from the sale of movable property (in accordance with paragraph 173.2 of Article 173 of the Tax Code of Ukraine).

Detailed information on the provision of administrative services and their cost is available on the official website of the Main Service Center of the Ministry of Internal Affairs of Ukraine via this link.

On our YouTube channel “Biznesuy” you can watch an interesting and useful video about electronic labor books, and it will only take 6 minutes.

Car Re-registration: Frequently Asked Questions

Is Car Re-registration Possible Without Deregistration

Yes, it is possible. Change of owner is not a ground for vehicle deregistration. An exhaustive list of grounds for deregistration is established by Resolution No. 1273 of the Cabinet of Ministers of Ukraine dated December 16, 2020.

Is Insurance Valid During Car Re-registration

Yes, upon a change of car owner, the Compulsory Civil Liability Insurance Agreement remains valid until its expiration date, and the rights and obligations of the insured person transfer to the person who acquired ownership of such vehicle (in accordance with subparagraphs 20-1.1. and 20-2.1. of Article 20 of the Law of Ukraine No. 1961-IV "On Compulsory Civil Liability Insurance of Owners of Terrestrial Vehicles" dated July 1, 2004).

How Many Cars Can Be Registered to One Person

The current legislation of Ukraine does not establish any restrictions or requirements regarding the number of cars owned by one person.

Can Two Owners Be Entered in the Technical Passport

Yes, it is possible. Paragraph 6 of the Procedure stipulates that vehicles belonging to several natural or legal persons (co-owners) are registered under one of these persons upon their written application. At the same time, a corresponding entry (Full Name is a co-owner) is made in the "Special Notes" section of the registration certificate regarding the other co-owner.

Do Ministry of Internal Affairs Service Centers Re-register Vehicles During Quarantine

Yes, the Ministry of Internal Affairs service centers operate on their usual schedule during lockdown. However, to avoid a large number of people being simultaneously present at the Ministry of Internal Affairs service centers, and to comply with anti-epidemic sanitary requirements, services are provided by prior appointment, as announced by the Main Service Center of the Ministry of Internal Affairs (MSC MIA) on its official Facebook page.

To do this, you can:

• use the “Electronic Queue Registration” function on the website (for those Ministry of Internal Affairs service centers where it has been updated)
• or register by phone at regional or territorial Ministry of Internal Affairs service centers where the electronic queue has not yet been implemented.

Additionally, on its official Facebook page, the MSC MIA regularly reminds about the possibility of obtaining other services via online service.

Thus, as we can see, the procedure for concluding a car sale and purchase agreement and re-registering it to a new owner is much simpler than it might seem at first glance. It only requires a few hours of your time and a complete list of documents.

The lawyers of Olha Petrukhina Law Firm will provide you with qualified assistance in drafting and certifying a sale and purchase agreement, and will help with the re-registration of the vehicle to the new owner.