Insuring a financed, leased or used vehicle in Québec

A financed or leased vehicle does not belong entirely to you: a lender or a lessor has an interest in it, and your insurance contract must take that into account. A used vehicle raises other questions: when to insure it, how to register it and what to check before paying. Here are the essentials, with the rules of the standard Q.P.F. No. 1 form approved by the Autorité des marchés financiers (AMF) and the SAAQ's guidance.

What the lender or lessor can require

Civil liability insurance is mandatory for everyone: according to the SAAQ, you must hold private insurance of at least $50,000. For damage to your own vehicle, Chapter B (Section B in the official English form) remains optional under the law, but your financing or lease agreement can require certain protections, for example B1 (all perils) or a combination of B2 (collision or upset) and B3 (accidents without collision or upset), as well as a maximum deductible. Read that clause before asking for quotes.

The Q.P.F. No. 1 provides, in its Declarations, a line for the “Creditor entitled to the indemnities under Section B, to the extent of the creditor's interest.” Two endorsements approved by the AMF frame that role:

• Q.E.F. No. 23a, advance notice to the creditor: the insurer must give the creditor at least 15 days' notice before cancelling or changing a Chapter B coverage, if the change works against the creditor.
• Q.E.F. No. 23b, coverage granted to the creditor: the Chapter B indemnities are paid to the creditor, according to its interest and up to what it is owed, if the vehicle is not repaired, or even if it is repaired when the creditor holds a prior claim or a hypothec. The creditor keeps this protection even if the insured failed to meet certain obligations under the contract, and it undertakes to pay, at the insurer's request, any unpaid premium.

If you switch insurers during the financing, have the creditor listed on the new contract as soon as it takes effect. The finance company can also require that your loan be insured, for example in case of death or disability. The AMF points out that even then, it is up to you to choose your insurance product and your insurer.

The gap between the loan balance and the vehicle's value

The AMF sums it up this way: in general, your auto insurance covers the actual value of your vehicle, meaning its value at the time of the loss, not the price you paid for it. The Q.P.F. No. 1 puts it in its own way: the value of the damage payable cannot exceed the “actual cash value” of the vehicle.

Yet a vehicle depreciates, while the balance of a loan or a lease goes down only as the payments are made. Early in the financing, especially with a small down payment or a long term, the balance can exceed the value of the vehicle. In a total loss, the basic indemnity follows the actual cash value, not your balance. With the coverage granted to the creditor, it is paid to the creditor according to its interest; if the balance exceeds the indemnity, the difference remains your responsibility. To gauge your situation, compare the balance shown on your financing statement with the prices of comparable vehicles on the market.

The solutions aimed at that gap

The AMF distinguishes two types of protection against the loss of value, and neither is mandatory:

• The replacement cost endorsement (avenant valeur à neuf), an addition to your auto insurance, offered by your damage insurance agent or broker or by an online firm. In the forms, this is endorsement Q.E.F. No. 43, “Change to indemnity”: its options 43C to 43F change the calculation in a total loss (value agreed in advance, compensation without depreciation, replacement value, increased indemnity), and options 43A and 43B, in a partial loss.
• Replacement insurance, a separate coverage, the Q.P.F. No. 5 form, which can be bought from an agent, a broker, an online firm or, for now, a dealer.

Here are some of the differences the AMF points out:

Question	Replacement cost endorsement (Q.E.F. No. 43)	Replacement insurance (Q.P.F. No. 5)
Same insurer as your auto insurance	Always	Not necessarily
Price	Set for the term of the contract, it can change at renewal	Set only once, at purchase
After a total loss	Replace the vehicle or receive a lump sum	Replacement is mandatory
Deductible	Generally payable	Reimbursed by the replacement insurance
Renewal	With the auto insurance	No, fixed term

The AMF specifies that in the event of an accident or theft, you cannot claim an indemnity under both protections at once: you have to choose.

You may also be offered a product described as covering the gap between the balance of your loan or lease and the insurer's indemnity. Ask in writing what exactly it pays (the replacement cost, the balance owed or the difference), for how long and with which exclusions, and check that it does not duplicate a protection you already hold.

At the dealership, the employee must give you an information sheet on your rights as soon as they offer you insurance, along with an explanatory document. According to the AMF, you can change your mind within 10 days of the purchase, with no fees or penalty, by notifying the insurer by registered mail using the notice of rescission provided in that document. The AMF adds that as of January 1, 2027, dealers will no longer be able to offer replacement insurance; the product will remain available from certified representatives and firms.

Long-term leasing, the particulars

The Q.P.F. No. 1 includes a lease of at least one year in its definition of owner: a long-term lessee is therefore treated as an owner. When the lessor and the lessee are both named on the contract, endorsement Q.E.F. No. 5a adapts the contract to that situation.

The AMF specifies that the replacement cost endorsement and replacement insurance are available for purchased vehicles as well as for vehicles leased long term. A particular rule applies, however: if total loss options 43D, 43E or 43F cover a leased vehicle whose owner and lessee are both named on the contract, only the lessee is entitled to the difference between the value calculated under the option and the actual cash value.

Buying used, from a private seller or a dealer

Before buying from a private seller, the SAAQ recommends, among other things, examining the vehicle in daylight, test-driving it long enough, having it inspected by a mechanic, asking for repair invoices showing the mileage and making sure it is not a flood-damaged vehicle. It also advises checking with the Registre des droits personnels et réels mobiliers (RDPRM), Québec's register of personal and movable real rights, that the vehicle is free of debts, since a vehicle that is not fully paid off can be seized by the creditor. Finally, draw up a bill of sale: the SAAQ points out that the registration certificate is not a title of ownership. The ownership history, available in SAAQclic for a fee, shows, among other things, whether the vehicle has been rebuilt and how many owners it has had.

On the insurance side, arrange coverage before you hit the road. If you are already insured and the new vehicle replaces yours or is added to it, the Q.P.F. No. 1 gives it the same coverage under certain conditions, in particular informing the insurer within 14 days of taking possession and paying the additional premium. Calling before you drive away is still simpler.

The insurer may also ask you for a formal undertaking concerning the risk of theft of the entire vehicle: that is the purpose of endorsement Q.E.F. No. 45. The Q.P.F. No. 1 provides that in the event of non-compliance with a formal undertaking that increases the risk, the coverage for the risk concerned is suspended.

At a dealer, the AMF points out that the dealer is not authorized to sell or offer auto insurance. It can refer you to a firm, and be paid for doing so, but you remain free to shop for your insurance through the intermediary of your choice.

Registration with the SAAQ and the licence plate

Between private individuals, the transfer can be done online in SAAQclic if the vehicle is a passenger vehicle less than 25 years old, registered in the name of a single person, and no unpaid ticket is attached to it; the seller and the buyer must both have their SAAQclic file. The buyer then accepts the transfer and registers the vehicle within 48 business hours, entering the actual mileage shown on the odometer. Otherwise, the transaction takes place at a service point, where the buyer and the seller present their driver's licence or another official document with a photo.

As for the plate, the seller can choose to transfer theirs to the buyer, and the SAAQ encourages reusing the plate of the vehicle purchased. Otherwise, the buyer affixes a temporary paper plate while waiting for the metal plate, which is sent by mail.

At registration, the QST is payable even on a used vehicle: the SAAQ collects it on the higher of the sale price and the estimated value of the vehicle. Between private individuals, there is no GST to pay.

Finally, the SAAQ points out that the seller remains the owner of the vehicle, and responsible for it, until it is registered in the buyer's name: offences or an accident occurring in the meantime would be attributed to the seller. Buyer or seller, complete the transfer without delay. At a dealer, ask how the registration will be handled.

Your checklist

• Read the insurance requirements of the financing or lease agreement.
• Have the creditor listed on the insurance contract.
• Assess the gap between the balance and the value of the vehicle, then compare the replacement cost endorsement and replacement insurance.
• For a used vehicle, check the RDPRM and the history, and insure the vehicle before driving away.
• Complete the transfer with the SAAQ without delay.

We are neither an insurer nor a broker: we explain, and our licensed partner presents quotes to you. Our guide to switching insurers explains how to move from one contract to another without a coverage gap.

Sources

• Autorité des marchés financiers (AMF), lautorite.qc.ca: Q.P.F. No. 1, endorsements Q.E.F. No. 5a, 23a, 23b, 43 and 45, the page on replacement cost and replacement insurance, the page on car dealers and insurance, the news item of July 30, 2026 on the sale of insurance by dealers.
• Société de l'assurance automobile du Québec (SAAQ), saaq.gouv.qc.ca: transferring a registration from one individual to another, checklist on transfers in SAAQclic.

Pages consulted on September 29, 2026.