OMVIC OMVIC Trade-Ins, Liens and Vehicle Registration 3 — Questions and Answers
Question 1: What is the term for a vehicle title in Ontario that has been designated due to significant damage, flood, or write-off?
- A lien title
- A conditional title
- A branded title (Correct answer)
- A restricted title
Correct answer: A branded title
A 'branded title' in Ontario indicates the vehicle has been designated — for example, as irreparable, salvage, or rebuilt — due to significant damage or total loss.
Question 2: A consumer purchases a vehicle from a private seller without obtaining a UVIP. Who bears the risk of any undisclosed lien discovered after the sale?
- The lender, who should have notified the buyer directly
- The buyer, since purchasing without a UVIP means they assumed the risk of unknown encumbrances (Correct answer)
- OMVIC, which indemnifies all private sale purchases
- The Ministry of Transportation, which is liable for registry inaccuracies
Correct answer: The buyer, since purchasing without a UVIP means they assumed the risk of unknown encumbrances
Buyers who skip the UVIP in private transactions assume the risk of unknown liens; the UVIP is specifically designed to protect buyers from post-sale lien surprises.
Question 3: Under the MVDA 2002, which statement about 'as is' vehicle sales by registered dealers is correct?
- Dealers can sell vehicles 'as is' without any disclosure requirements
- An 'as is' sale still requires the dealer to disclose all known material defects in writing (Correct answer)
- Selling 'as is' transfers all legal liability to the buyer regardless of dealer knowledge
- 'As is' sales are prohibited by the MVDA for vehicles less than five years old
Correct answer: An 'as is' sale still requires the dealer to disclose all known material defects in writing
Even in 'as is' transactions, dealers must disclose all known material defects; the 'as is' designation does not waive the dealer's duty of honesty.
Question 4: Which document must a private seller in Ontario provide to the buyer at the time of a used vehicle sale?
- A CARFAX vehicle history report
- A Used Vehicle Information Package (UVIP) (Correct answer)
- A manufacturer's certificate of origin
- A notarized bill of sale
Correct answer: A Used Vehicle Information Package (UVIP)
Ontario law requires private sellers to provide the buyer with a UVIP from ServiceOntario at the time of the sale.
Question 5: A vehicle lien registered under the PPSA is 'perfected' when:
- The lender receives the final loan payment
- The lender files the security interest registration in the PPSA registry (Correct answer)
- The vehicle's ownership is transferred to the lender
- The Ministry of Transportation endorses the lien on the permit
Correct answer: The lender files the security interest registration in the PPSA registry
A security interest in personal property (including vehicles) is perfected under the PPSA when the creditor registers the interest in Ontario's Personal Property Registry.
Question 6: If a dealer sells a vehicle to a consumer and fails to pay out an outstanding lien as agreed, the lender can:
- Only pursue the dealer for damages since the vehicle has already been sold
- Repossess the vehicle from the buyer since the lien remains legally registered against the vehicle (Correct answer)
- Report the dealer to the Ministry of Transportation only
- Cancel the vehicle's registration plates automatically
Correct answer: Repossess the vehicle from the buyer since the lien remains legally registered against the vehicle
A registered lien travels with the vehicle; if the dealer fails to pay it out, the lender retains the right to repossess the vehicle from the new owner.
Question 7: Under Ontario's Highway Traffic Act, when are licence plates returned to the seller versus transferred in a vehicle sale?
- Plates always transfer with the vehicle in all sale types
- In private sales, plates belong to the seller and are retained; in dealer sales, plates are handled per buyer instruction (Correct answer)
- Plates always stay with the vehicle regardless of seller type
- Plates are automatically cancelled at ServiceOntario upon any vehicle sale
Correct answer: In private sales, plates belong to the seller and are retained; in dealer sales, plates are handled per buyer instruction
In Ontario, licence plates are registered to the owner, not the vehicle; in a private sale, the seller retains their plates and the buyer must obtain new plates upon registration.
OMVIC OMVIC Trade-Ins, Liens and Vehicle Registration 3
What is the term for a vehicle title in Ontario that has been designated due to significant damage, flood, or write-off?