OMVIC OMVIC Vehicle Sales Process and Documentation 5 — Questions and Answers
Question 1: A dealer knowingly sells a vehicle with a salvage title without disclosing it to the buyer. Under the MVDA, the buyer's most likely remedy is:
- A $200 compensation payment from OMVIC's consumer fund
- Rescission of the contract and a full refund through the Motor Vehicle Dealers Compensation Fund (Correct answer)
- Filing a complaint with the BBB only
- Accepting the vehicle as-is since the sale is final
Correct answer: Rescission of the contract and a full refund through the Motor Vehicle Dealers Compensation Fund
OMVIC's Motor Vehicle Dealers Compensation Fund provides recourse for buyers who suffer financial loss due to dealer fraud or misrepresentation.
Question 2: Which detail about a buyer's trade-in is a dealer legally required to include in the bill of sale?
- The trade-in vehicle's full service history
- The trade-in allowance (agreed value of the trade-in) (Correct answer)
- The dealer's resale plan for the traded vehicle
- The trade-in vehicle's insurance history
Correct answer: The trade-in allowance (agreed value of the trade-in)
The agreed trade-in allowance (value credited to the buyer) must appear on the bill of sale as it directly affects the net purchase price.
Question 3: A dealer is required to provide a Safety Standards Certificate for a used vehicle sold in Ontario. Who is authorized to issue this certificate?
- Any licensed mechanic employed by the dealer
- A licensed motor vehicle inspection station approved by the Ministry of Transportation (Correct answer)
- The original vehicle manufacturer's dealer network only
- OMVIC inspectors upon request
Correct answer: A licensed motor vehicle inspection station approved by the Ministry of Transportation
Safety Standards Certificates in Ontario can only be issued by a motor vehicle inspection station licensed by the Ministry of Transportation.
Question 4: Under OMVIC regulations, what happens if a dealer advertises a vehicle at one price but the bill of sale reflects a higher price?
- The buyer must pay the higher bill of sale price as the final legal document
- The advertised price is generally what the buyer is entitled to pay (Correct answer)
- The dealer can charge the higher price if they can justify it
- The transaction is automatically voided and both parties are released
Correct answer: The advertised price is generally what the buyer is entitled to pay
Charging more than the advertised price is a violation of OMVIC's advertising standards; buyers are entitled to the advertised all-in price.
Question 5: A buyer discovers after purchase that the vehicle had been a daily rental previously — a fact the dealer knew but did not disclose. Which OMVIC rule was violated?
- The rule against selling vehicles at auction without disclosure
- The mandatory disclosure requirement for prior use as a daily rental vehicle (Correct answer)
- The requirement to provide a warranty on all used vehicles
- The prohibition on selling vehicles with more than 200,000 km
Correct answer: The mandatory disclosure requirement for prior use as a daily rental vehicle
Prior use as a daily rental is one of the specifically mandated disclosures under OMVIC regulations that must be made before completing the sale.
Question 6: How long must an OMVIC-registered dealer retain copies of bills of sale and related transaction records under the MVDA?
- 1 year
- 3 years (Correct answer)
- 7 years
- Indefinitely
Correct answer: 3 years
The MVDA requires registered dealers to retain all transaction records including bills of sale for a minimum of 3 years for compliance and audit purposes.
Question 7: A customer test drives a vehicle and verbally agrees to purchase it. The salesperson prepares a bill of sale but the customer leaves before signing. Is there a binding contract?
- Yes, the verbal agreement is fully binding under Ontario law
- No, a motor vehicle sale contract is not binding until it is signed in writing by both parties (Correct answer)
- Yes, if the test drive receipt was signed
- Yes, if the salesperson has a witness to the verbal agreement
Correct answer: No, a motor vehicle sale contract is not binding until it is signed in writing by both parties
Under the MVDA, motor vehicle sale contracts must be in writing and signed by both parties to be enforceable.
OMVIC OMVIC Vehicle Sales Process and Documentation 5
A dealer knowingly sells a vehicle with a salvage title without disclosing it to the buyer.
Under the MVDA, the buyer's most likely remedy is: