OMVIC Motor Vehicle Dealers Compensation Fund — Questions and Answers
Question 1: What is the maximum amount a consumer can recover from the Motor Vehicle Dealers Compensation Fund for a single claim?
- $10,000
- $25,000
- $45,000 (Correct answer)
- $100,000
Correct answer: $45,000
$45,000 is the legislated maximum payout per claim under the MVDA. This cap applies regardless of the total loss suffered by the consumer.
Question 2: Who funds the Motor Vehicle Dealers Compensation Fund?
- The Ontario government through general tax revenue
- Registered dealers through a transaction fee remitted for each vehicle sold or leased (Correct answer)
- Consumers through a surcharge collected at the time of vehicle purchase
- Insurance companies licensed to operate in Ontario
Correct answer: Registered dealers through a transaction fee remitted for each vehicle sold or leased
Registered dealers remit a transaction fee to OMVIC for every vehicle sold or leased, including fleet and as-is transactions. These fees fund the Compensation Fund.
Question 3: How much is the transaction fee that a registered dealer must remit to OMVIC for each vehicle sold or leased?
- $5 per vehicle
- $10 per vehicle (Correct answer)
- $25 per vehicle
- $50 per vehicle
Correct answer: $10 per vehicle
$10 per transaction is the prescribed fee dealers must remit to OMVIC for each vehicle sold or leased, which flows into the Compensation Fund.
Question 4: When must a registered dealer remit their transaction fees to OMVIC?
- Within 30 days of each individual vehicle sale
- Monthly, with a sales summary report
- Quarterly, with an audited financial statement
- Annually, with their dealer registration renewal (Correct answer)
Correct answer: Annually, with their dealer registration renewal
Transaction fees are remitted annually at the same time the dealer submits their registration renewal fee, not on a per-sale or quarterly basis.
Question 5: Which of the following scenarios would most likely qualify for a valid claim against the Motor Vehicle Dealers Compensation Fund?
- A consumer is dissatisfied with the colour of the vehicle they purchased
- A consumer suffers a financial loss because a registered dealer committed fraud in the sale (Correct answer)
- A consumer wants to return a vehicle within 10 days because they changed their mind
- A consumer disputes the trade-in value a dealer offered
Correct answer: A consumer suffers a financial loss because a registered dealer committed fraud in the sale
The Compensation Fund exists to reimburse consumers who suffer financial losses as a direct result of a registered dealer's fraudulent or dishonest conduct. Buyer's remorse and valuation disputes are not covered.
Question 6: A consumer's vehicle purchase results in a $60,000 loss due to dealer fraud. How much can they recover from the Compensation Fund?
- The full $60,000, as the Fund covers all proven losses
- $45,000, because that is the maximum per-claim limit under the MVDA (Correct answer)
- $30,000, because the Fund covers only 50% of any loss
- Nothing, because losses over $50,000 are ineligible
Correct answer: $45,000, because that is the maximum per-claim limit under the MVDA
The MVDA caps Compensation Fund payouts at $45,000 per qualifying claim. The consumer could pursue the dealer directly for the remaining $15,000 through civil action.
OMVIC Motor Vehicle Dealers Compensation Fund
What is the maximum amount a consumer can recover from the Motor Vehicle Dealers Compensation Fund for a single claim?