OMVIC OMVIC Trade-Ins, Liens and Vehicle Registration 1

Question 1

Under the MVDA 2002 and OMVIC's Code of Ethics, what must a dealer disclose to a customer regarding a trade-in vehicle valuation?

Accepted Answer

Only the final allowance offered for the trade-in

Answer

A written itemized breakdown of the trade-in value and any deductions applied

Answer

The dealership's wholesale resale price for the trade-in

Answer

No specific disclosure is required as trade-in values are negotiable

Question 2

What is a 'lien' on a motor vehicle in Ontario?

Accepted Answer

A financial claim registered against the vehicle by a creditor, typically a lender who financed the vehicle

Answer

A notation that the vehicle failed a provincial emissions test

Answer

A safety recall notice issued by Transport Canada

Answer

A border crossing restriction placed on vehicles imported from the United States

Question 3

Before accepting a used vehicle as a trade-in from a consumer, what is a registered dealer's responsibility regarding liens?

Accepted Answer

The dealer must conduct or facilitate a lien search to identify any outstanding financial claims against the vehicle

Answer

The dealer should ask the customer to check for liens on their own

Answer

The dealer only needs to check for liens if the vehicle is less than three years old

Answer

Lien checks are optional and only required if the customer requests one

Question 4

If a trade-in vehicle has an outstanding lien, how must a registered Ontario dealer handle the lien payout?

Accepted Answer

The dealer must pay out the lien to the lender directly and apply any remaining equity to the customer's transaction

Answer

The dealer can deduct the lien amount from the customer's trade-in allowance and pocket the difference

Answer

The customer must settle the lien independently before trading in the vehicle

Answer

The dealer can ignore liens under $2,500 without consequence

Question 5

In Ontario, the Used Vehicle Information Package (UVIP) must be provided by the seller in which type of transaction?

Accepted Answer

In all private sales of used motor vehicles between individuals

Answer

Only when selling a vehicle to a dealer

Answer

Only when the vehicle is more than 10 years old

Answer

Only when the vehicle has had more than two owners

Question 6

Which organization in Ontario maintains the lien registration system for motor vehicles?

Accepted Answer

The Personal Property Security Act (PPSA) registry administered by the Ontario government

Answer

OMVIC

Answer

The Ontario Court of Justice

Answer

The Canadian Automobile Association

Question 7

A customer trades in a vehicle with a $6,000 outstanding lien and is offered $10,000 as the trade-in allowance. What amount should the customer expect to receive as a net credit toward their new purchase?

Accepted Answer

$4,000 — the lien is deducted from the trade-in allowance leaving the net equity

Answer

$6,000 — the dealer pays off the lien and the customer receives nothing

Answer

$10,000 — the customer receives the full trade-in allowance and pays the lien separately

Answer

$16,000 — the lien amount is added to the trade-in allowance