OMVIC OMVIC Mandatory Disclosures and Consumer Protection 3 — Questions and Answers
Question 1: A registered dealer sells a vehicle and fails to disclose that it sustained $4,500 in collision damage prior to sale. The consumer discovers this after delivery. Under the MVDA, the consumer's most likely remedy is:
- The right to rescind the contract and receive a refund, as the undisclosed repair cost exceeds the $3,000 threshold (Correct answer)
- The right to a partial refund equal to the cost of the undisclosed repairs
- No remedy since the consumer accepted the vehicle at delivery
- A warranty claim against the repairing body shop, not the dealer
Correct answer: The right to rescind the contract and receive a refund, as the undisclosed repair cost exceeds the $3,000 threshold
Failure to disclose accident damage exceeding $3,000 is a mandatory disclosure violation; the MVDA empowers consumers to rescind contracts where material disclosures were omitted.
Question 2: Under the MVDA, which body has the authority to revoke or suspend a motor vehicle dealer's or salesperson's registration?
- OMVIC, as the regulatory body authorized by the MVDA to oversee registrant compliance (Correct answer)
- The Ontario Motor Vehicle Industry Council's Arbitration Board
- The Director of the Consumer Protection Branch of Service Ontario
- The Ontario Superior Court of Justice following a civil judgment
Correct answer: OMVIC, as the regulatory body authorized by the MVDA to oversee registrant compliance
OMVIC, as the delegate of the Registrar under the MVDA, has the authority to investigate, discipline, suspend, or revoke registrations of non-compliant dealers and salespersons.
Question 3: A consumer discovers after purchase that the vehicle they bought from a dealer had previously been registered in a U.S. state as a salvage vehicle, but the dealer did not disclose this. The non-disclosure of the U.S. branded title:
- Violates MVDA mandatory disclosure requirements, as out-of-province and out-of-country branded statuses must be disclosed (Correct answer)
- Is not a violation because Canadian dealers are not required to investigate U.S. vehicle history
- Is only a violation if the vehicle was formally re-registered with a Canadian branded title
- Does not affect the sale since a Safety Standards Certificate was provided at delivery
Correct answer: Violates MVDA mandatory disclosure requirements, as out-of-province and out-of-country branded statuses must be disclosed
MVDA mandatory disclosure obligations cover known branded title information regardless of where the branding occurred; dealers must disclose known U.S. salvage or branded history.
Question 4: What must a dealer provide to a consumer when selling a used motor vehicle to help the consumer understand the vehicle's registration, lien, and ownership history in Ontario?
- The Used Vehicle Information Package (UVIP), which includes registration history, lien information, and reported sales price history (Correct answer)
- A CARFAX Canada report, which is the required provincial disclosure document
- A notarized vehicle history affidavit signed by all prior registered owners
- A mechanical fitness assessment report from an OMVIC-licensed inspection facility
Correct answer: The Used Vehicle Information Package (UVIP), which includes registration history, lien information, and reported sales price history
The UVIP is the provincially mandated document for used vehicle sales in Ontario and contains information on registration history, liens, and past reported sale prices.
Question 5: A consumer wants to make a claim against the Motor Vehicle Dealers Compensation Fund. Which of the following losses is most likely to be eligible for compensation?
- A $3,000 deposit paid to a registered dealer who collected payment but did not deliver the vehicle (Correct answer)
- Repair costs for a mechanical breakdown that occurred three months after purchase
- A price difference between what the consumer paid and what a comparable vehicle costs at another dealership
- Loss of income while the consumer's vehicle was at the dealer's service department
Correct answer: A $3,000 deposit paid to a registered dealer who collected payment but did not deliver the vehicle
The Compensation Fund covers financial losses caused by a registered dealer's fraudulent or dishonest conduct, such as accepting a deposit and failing to deliver the vehicle.
Question 6: Under the MVDA, when a consumer purchases a new vehicle from a franchised dealer, which additional consumer protection applies compared to a used vehicle purchase?
- New vehicles are covered by the manufacturer's warranty, and any dealer-added charges must comply with OMVIC's all-in pricing advertising standards (Correct answer)
- New vehicle buyers have a 10-day statutory cooling-off right that does not apply to used vehicles
- New vehicle purchases are governed exclusively by federal consumer protection law, not the MVDA
- The Safety Standards Certificate requirement is waived for new vehicles since they have never been registered
Correct answer: New vehicles are covered by the manufacturer's warranty, and any dealer-added charges must comply with OMVIC's all-in pricing advertising standards
New vehicles carry manufacturer warranties and OMVIC's all-in pricing and advertising standards apply to all registrants; there is no statutory cooling-off right even for new vehicles under the MVDA.
Question 7: Under the MVDA, a registered dealer who collects a deposit for a vehicle that is not yet in their inventory and then fails to acquire or deliver the vehicle should:
- Return the deposit promptly and in full if they cannot fulfill the order (Correct answer)
- Retain the deposit as liquidated damages for the time spent on the order
- Apply the deposit to an alternative vehicle from their inventory
- Keep the deposit until the consumer signs a release waiving the delivery obligation
Correct answer: Return the deposit promptly and in full if they cannot fulfill the order
When a dealer cannot fulfill a vehicle order for which a deposit has been taken, the MVDA and fair dealing principles require the deposit to be returned promptly and in full.
OMVIC OMVIC Mandatory Disclosures and Consumer Protection 3
A registered dealer sells a vehicle and fails to disclose that it sustained $4,500 in collision damage prior to sale.
The consumer discovers this after delivery.
Under the MVDA, the consumer's most likely remedy is: