OMVIC - Ontario Motor Vehicle Industry Council Contracts and Consumer Rights Questions and Answers 1 — Questions and Answers
Question 1: Under Ontario's Motor Vehicle Dealers Act (MVDA), which of the following gives a consumer the right to cancel a vehicle purchase contract within 90 days of delivery?
- The consumer found a better price for the same vehicle at another dealership.
- The consumer was not approved for financing with the terms they wanted.
- The contract failed to disclose that the vehicle was previously used as a police cruiser. (Correct answer)
- The consumer decides they no longer like the colour of the vehicle.
Correct answer: The contract failed to disclose that the vehicle was previously used as a police cruiser.
The MVDA provides a 90-day cancellation right if a dealer fails to disclose specific information in the contract, such as the vehicle's previous use as a taxi, limo, police, or emergency service vehicle. The other options are not legally protected reasons for contract cancellation after signing.
Question 2: A dealership advertises a used car for $15,000. According to OMVIC's 'All-In Price Advertising' regulations, what is the only additional amount that can be charged on top of this advertised price?
- Administration fees and freight charges.
- Harmonized Sales Tax (HST) and the actual cost of licensing. (Correct answer)
- A mandatory extended warranty and tire stewardship fee.
- The cost of the safety standard certificate and the OMVIC transaction fee.
Correct answer: Harmonized Sales Tax (HST) and the actual cost of licensing.
OMVIC's all-in pricing law requires the advertised price to include all fees and charges a dealer intends to collect, such as freight, PDI, and administration fees. The only exceptions that can be added to the advertised price are HST and the actual cost of licensing, provided the ad clearly states they are extra.
Question 3: A customer signs a contract to purchase a new vehicle. Two days later, they experience 'buyer's remorse' and want to cancel the deal. What is the general rule in Ontario regarding this situation?
- The customer has a mandatory 48-hour 'cooling-off period' to cancel any contract.
- The contract can be cancelled without penalty if the vehicle has not yet been delivered.
- There is no general 'cooling-off period' for vehicle contracts in Ontario, and the sale is considered final once signed. (Correct answer)
- The customer can cancel but will automatically forfeit their entire deposit, regardless of the amount.
Correct answer: There is no general 'cooling-off period' for vehicle contracts in Ontario, and the sale is considered final once signed.
Ontario law does not provide for a 'cooling-off period' for motor vehicle purchase agreements. Once a contract is signed, it is legally binding on both the consumer and the dealer, except in specific circumstances like non-disclosure of key information.
Question 4: A salesperson tells a customer that a used vehicle has never been in an accident. The customer later discovers the vehicle had $4,000 in collision repairs. Under the Consumer Protection Act (CPA), this could be considered an example of what?
- A breach of contract.
- An unfair practice (a false or misleading representation). (Correct answer)
- A failure of all-in pricing.
- A non-material fact disclosure error.
Correct answer: An unfair practice (a false or misleading representation).
The Consumer Protection Act (CPA) defines unfair practices as making false, misleading, or deceptive representations. Misrepresenting the accident history of a vehicle is a prime example of this. The CPA provides remedies for consumers who are victims of such practices, potentially including contract cancellation.
Question 5: A bill of sale for a used vehicle shows the odometer reading as 80,000 km. Upon delivery, the customer notices the actual odometer reading is 81,500 km. What are the customer's rights in this situation according to the MVDA?
- The customer must accept the vehicle as the discrepancy is minor.
- The dealer is required to provide a cash discount for the extra mileage.
- The customer can demand immediate cancellation of the contract and a full refund. (Correct answer)
- The dealer has 30 days to correct the odometer reading on the vehicle.
Correct answer: The customer can demand immediate cancellation of the contract and a full refund.
A consumer has the right to cancel a contract within 90 days if the vehicle's odometer reading is inaccurate by more than the lesser of 5% or 1,000 km. In this case, the discrepancy is 1,500 km, which is over the 1,000 km limit, triggering the buyer's right to rescission.
Question 6: Which of the following scenarios would legally require a written disclosure on the vehicle sale contract?
- The previous owner was a smoker.
- The vehicle was previously registered in another province. (Correct answer)
- The vehicle's tires were replaced with a different brand.
- The vehicle was used to commute to work daily.
Correct answer: The vehicle was previously registered in another province.
The Motor Vehicle Dealers Act (MVDA) has a list of specific mandatory disclosures that must be made in writing on the contract. This list includes disclosing if the vehicle was previously registered outside of Ontario. While other facts might be material, the out-of-province registration is a specific, required disclosure.
OMVIC - Ontario Motor Vehicle Industry Council Contracts and Consumer Rights Questions and Answers 1
Under Ontario's Motor Vehicle Dealers Act (MVDA), which of the following gives a consumer the right to cancel a vehicle purchase contract within 90 days of delivery?