OMVIC OMVIC Vehicle Sales Process and Documentation 4 — Questions and Answers
Question 1: Under OMVIC's Code of Ethics, a dealer who discovers a known defect in a vehicle after the sale has been completed should:
- Say nothing if the buyer has not noticed
- Contact the buyer and disclose the defect as soon as possible (Correct answer)
- Only disclose if the buyer returns for service
- Repair the defect silently under warranty if it qualifies
Correct answer: Contact the buyer and disclose the defect as soon as possible
OMVIC's Code of Ethics requires dealers to act honestly and disclose material facts even after a sale, particularly regarding safety-related defects.
Question 2: A dealer is selling a vehicle on consignment. Under the MVDA, how must this arrangement affect the sales documentation?
- No different than a normal dealer-owned vehicle sale
- The consignment arrangement must be disclosed to the buyer (Correct answer)
- The original owner handles all documentation directly with the buyer
- The vehicle must be sold at auction only
Correct answer: The consignment arrangement must be disclosed to the buyer
When selling on consignment, the dealer must disclose that the vehicle is being sold on behalf of a third party, which is a material fact for the buyer.
Question 3: What is the correct procedure when a dealer realizes that a vehicle's odometer reading cannot be certified because of an instrument cluster replacement?
- Record the current reading without comment
- Disclose on the bill of sale that the true mileage is unknown (Correct answer)
- Remove the vehicle from sale until the true mileage is verified
- Estimate the mileage based on the vehicle's age and condition
Correct answer: Disclose on the bill of sale that the true mileage is unknown
When true mileage cannot be confirmed, the dealer must state 'true mileage unknown' on the bill of sale rather than certifying an unverifiable reading.
Question 4: Which of the following would be grounds for OMVIC to discipline a registered salesperson under the MVDA?
- Selling a high volume of vehicles in one month
- Failing to disclose prior taxi use of a vehicle to a buyer (Correct answer)
- Advertising a vehicle that was already sold pending financing
- Offering a buyer a free first oil change as an incentive
Correct answer: Failing to disclose prior taxi use of a vehicle to a buyer
Failing to make mandatory disclosures such as prior taxi use is a breach of the MVDA and OMVIC's Code of Ethics, subject to disciplinary action.
Question 5: A buyer is financing a vehicle through a dealer. Under OMVIC regulations, the cost of borrowing (interest charges) must be:
- Disclosed only if the buyer requests a full breakdown
- Clearly disclosed in writing as part of the financing agreement (Correct answer)
- Verbally explained at time of delivery only
- Excluded from the bill of sale to avoid complicating the transaction
Correct answer: Clearly disclosed in writing as part of the financing agreement
Consumer protection laws require full written disclosure of financing costs including the total cost of borrowing in the financing agreement.
Question 6: When can a registered dealer legally refuse to refund a deposit to a buyer who has decided not to proceed with a purchase?
- Any time — deposits are always non-refundable
- When the buyer cancels without cause after the dealer incurred specific documented costs on the buyer's behalf (Correct answer)
- Whenever the dealer has held the vehicle off the market for more than 24 hours
- Deposits can never be kept under any circumstances
Correct answer: When the buyer cancels without cause after the dealer incurred specific documented costs on the buyer's behalf
A dealer may retain all or part of a deposit if the buyer cancels without valid cause and the dealer can demonstrate actual losses incurred in reliance on the agreement.
Question 7: Under the MVDA 2002, what is the prescribed minimum information that must appear on a vehicle inspection certificate presented at time of sale?
- Only the VIN and pass/fail result
- The VIN, inspection date, inspector's name, and all items inspected with results (Correct answer)
- A general statement that the vehicle passed provincial safety standards
- The service technician's signature only
Correct answer: The VIN, inspection date, inspector's name, and all items inspected with results
A safety standards certificate must include the VIN, inspection date, inspector identification, and the results for all required inspection items.
OMVIC OMVIC Vehicle Sales Process and Documentation 4
Under OMVIC's Code of Ethics, a dealer who discovers a known defect in a vehicle after the sale has been completed should: