OMVIC OMVIC Vehicle Sales Process and Documentation 3 — Questions and Answers
Question 1: Under the MVDA 2002, which of the following is considered a 'material fact' that a dealer must always disclose to a buyer?
- The colour preferences of previous owners
- That the vehicle was previously used as a police cruiser (Correct answer)
- The dealer's wholesale purchase price
- The names of previous registered owners
Correct answer: That the vehicle was previously used as a police cruiser
Prior use as a police vehicle is a specifically enumerated mandatory material fact disclosure under OMVIC regulations.
Question 2: A buyer signs a purchase agreement for a new vehicle but later discovers the model is delayed by 6 months. Under the MVDA, what right does the buyer have?
- Accept the delay with no recourse
- Cancel the agreement and receive a full deposit refund (Correct answer)
- Only receive a partial refund of 50% of the deposit
- Wait the full 6 months as deposits are non-refundable
Correct answer: Cancel the agreement and receive a full deposit refund
If a dealer cannot deliver a vehicle within a reasonable time or as specified, the buyer is entitled to cancel and receive a full deposit refund.
Question 3: What is the primary purpose of requiring dealers to record the odometer reading on the bill of sale under OMVIC/MVDA?
- To calculate the appropriate insurance premium
- To help prevent and detect odometer fraud (Correct answer)
- To determine the vehicle's remaining warranty period
- To establish the vehicle's trade-in value benchmark
Correct answer: To help prevent and detect odometer fraud
Recording the odometer reading at time of sale creates a documented baseline that helps detect and deter odometer rollback fraud.
Question 4: A buyer wants to cancel a purchase agreement for a vehicle bought at a dealership three days after signing. Under Ontario law, does the buyer have a cooling-off cancellation right?
- Yes, buyers always have 10 days to cancel any consumer purchase
- No, there is no cooling-off period for in-dealership vehicle purchases (Correct answer)
- Yes, but only for new vehicles purchased from franchise dealers
- Yes, buyers have 48 hours to cancel after signing
Correct answer: No, there is no cooling-off period for in-dealership vehicle purchases
Ontario's Consumer Protection Act cooling-off rights apply to door-to-door sales, not to purchases made at a permanent business establishment like a car dealership.
Question 5: When a dealer accepts a trade-in with an outstanding lien, what is the dealer's obligation under OMVIC regulations?
- Ignore the lien and transfer title to the new owner
- Ensure the lien is paid out from the trade-in proceeds and title is clear before reselling (Correct answer)
- Disclose the lien only if the buyer asks about it
- Transfer the trade-in lien obligation directly to the buyer
Correct answer: Ensure the lien is paid out from the trade-in proceeds and title is clear before reselling
Dealers who accept trade-ins with outstanding liens must discharge those liens from the proceeds to ensure clear title before the trade-in can be resold.
Question 6: Which of the following must a dealer disclose if known, even if the damage was repaired and the vehicle looks normal?
- Minor scratches under $500 in repair cost
- Accident damage where repairs exceeded $3,000 (Correct answer)
- Normal wear items replaced during servicing
- Windshield chips repaired under warranty
Correct answer: Accident damage where repairs exceeded $3,000
Accident damage repairs exceeding $3,000 must be disclosed regardless of how well the vehicle was repaired or how cosmetically sound it appears.
Question 7: A salesperson verbally promises a buyer that the vehicle comes with an extended warranty, but this is not written in the bill of sale. Under OMVIC standards, what is the legal status of this promise?
- It is fully enforceable as a verbal contract
- It may not be enforceable as vehicle sales contracts must be in writing (Correct answer)
- It is enforceable only if two witnesses were present
- It is automatically voided by the written contract
Correct answer: It may not be enforceable as vehicle sales contracts must be in writing
Under the MVDA, all material terms including warranties must be in writing on the bill of sale to be reliably enforceable; verbal promises are difficult to enforce.
OMVIC OMVIC Vehicle Sales Process and Documentation 3
Under the MVDA 2002, which of the following is considered a 'material fact' that a dealer must always disclose to a buyer?