OMVIC - Ontario Motor Vehicle Industry Council MVDA and Legislation Questions and Answers 1 — Questions and Answers
Question 1: According to the Motor Vehicle Dealers Act (MVDA), what is the 'all-in pricing' rule for vehicle advertisements?
- The advertised price must include all fees and charges a dealer intends to collect, except for HST and licensing. (Correct answer)
- The advertised price represents the vehicle's base price before any additional options or fees.
- All-in pricing is optional for used vehicles but mandatory for new vehicles.
- The price must include HST and licensing, but not administration or freight charges.
Correct answer: The advertised price must include all fees and charges a dealer intends to collect, except for HST and licensing.
The MVDA requires that the advertised price for a motor vehicle must include all fees and charges the dealer intends to collect. The only exceptions are the Harmonized Sales Tax (HST) and licensing fees, which must be clearly and prominently indicated as extra.
Question 2: A consumer purchases a used vehicle from an OMVIC-registered dealer. Two weeks later, they discover the vehicle was previously used as a daily rental, a fact that was not disclosed on the bill of sale. Under the MVDA, what is the consumer's primary recourse?
- The consumer can only file a complaint with the vehicle manufacturer.
- The dealer is not obligated to disclose previous use as a rental.
- The consumer may have the right to cancel the contract and return the vehicle. (Correct answer)
- The consumer's only option is to sue the dealer in small claims court.
Correct answer: The consumer may have the right to cancel the contract and return the vehicle.
The MVDA has mandatory disclosure requirements for dealers. Failing to disclose that a vehicle was previously a daily rental is a significant omission. This may give the consumer the right to rescind (cancel) the contract within a specific timeframe because it's a material fact that was not disclosed.
Question 3: Which of the following statements about a dealer's responsibility under the OMVIC Code of Ethics is MOST accurate?
- The Code of Ethics is a set of voluntary guidelines with no real penalties for non-compliance.
- A salesperson must not engage in any activity that would cause the dealer to breach the Code of Ethics. (Correct answer)
- Dealers are responsible for their own ethical conduct but not for that of their salespeople.
- The Code of Ethics applies only to interactions with consumers, not to transactions between dealers.
Correct answer: A salesperson must not engage in any activity that would cause the dealer to breach the Code of Ethics.
The OMVIC Code of Ethics outlines the professional standards of conduct for both dealers and salespeople. A key principle is that a salesperson, as a representative of the dealership, must act ethically and not lead the dealer into a breach of the code. Dealers are ultimately responsible for the actions of their employees. The code also applies to dealer-to-dealer transactions to ensure fairness in the marketplace.
Question 4: When advertising a vehicle as 'as-is', what specific disclosure must be included in the advertisement according to MVDA regulations?
- A statement that the vehicle comes with a 30-day limited warranty.
- The phrase 'as-is' is sufficient on its own.
- A specific, mandated statement explaining the vehicle may not be roadworthy and may require substantial repairs at the purchaser's expense. (Correct answer)
- A list of all known defects and required repairs for the vehicle.
Correct answer: A specific, mandated statement explaining the vehicle may not be roadworthy and may require substantial repairs at the purchaser's expense.
Simply stating 'as-is' is not enough. The MVDA requires a very specific statement to be included in any advertisement for an 'as-is' vehicle. This statement clearly informs potential buyers that the vehicle is unfit, not e-tested, not represented as roadworthy, and may require significant repairs at their own cost.
Question 5: A dealer advertises a car for a specific price. A customer comes in and is told that the advertised price is only for financing and the cash price is $1,000 higher. According to OMVIC's advertising guidelines, this practice is:
- Acceptable, as dealers can set different prices for different payment methods.
- Unacceptable and a violation of the all-in pricing rule.
- Acceptable, but only if the higher cash price is mentioned in the fine print of the advertisement.
- Permitted, provided both the finance price and the cash price are clearly and prominently displayed in the advertisement. (Correct answer)
Correct answer: Permitted, provided both the finance price and the cash price are clearly and prominently displayed in the advertisement.
Dealers are allowed to advertise different prices for cash and financing. However, to be compliant with the MVDA and OMVIC guidelines, both prices must be stated clearly, comprehensibly, and with equal prominence in the advertisement. It is misleading to only advertise the finance price and then surprise a cash buyer with a higher cost.
Question 6: Under the MVDA, which of the following is NOT a mandatory written disclosure that a dealer must provide on the bill of sale for a used vehicle?
- The name and address of the vehicle's previous owner. (Correct answer)
- The total distance the vehicle has been driven, if determinable.
- If the vehicle was previously declared a total loss by an insurance company.
- If two or more adjacent body panels (excluding bumpers) have been replaced.
Correct answer: The name and address of the vehicle's previous owner.
While dealers must disclose many crucial facts about a vehicle's history and condition, the personal information of the previous owner is not one of the mandated disclosures under the MVDA. The other options are all specific, required disclosures designed to protect consumers by providing them with material facts about the vehicle they are purchasing.
OMVIC - Ontario Motor Vehicle Industry Council MVDA and Legislation Questions and Answers 1
According to the Motor Vehicle Dealers Act (MVDA), what is the 'all-in pricing' rule for vehicle advertisements?