Advertising and Disclosure Rules Flashcards

A dealer advertises a vehicle online at an all-in price of $23,499. When the customer arrives, the F&I manager adds a $799 'documentation processing fee' and a $299 'vehicle history report fee,' explaining these are 'administrative costs not included in the sticker price.' Under OMVIC's all-in pricing regulations, which of the following accurately describes the legal situation?

Answer: Both fees violate the all-in pricing requirement; the only amounts that may be excluded from an advertised price are HST and licensing fees

Under Ontario's all-in pricing regulation, every fee and charge a dealer intends to collect must be included in the advertised price — there are no exceptions for administrative, documentary, or ancillary service fees. The only two amounts that may be legitimately excluded are HST/HST-equivalent taxes and government licensing fees (which vary by municipality). Any other fee not disclosed in the advertised price constitutes a violation of the Motor Vehicle Dealers Act advertising rules, regardless of when or how it is disclosed to the buyer.

A franchised dealership puts a brand-new vehicle into its loaner fleet for 11 months, accumulating 14,200 km. The vehicle is then removed from service and placed on the lot for retail sale. The dealer's sales team argues internally about how to list it. Which of the following approaches is compliant with OMVIC advertising and disclosure rules?

Answer: It must be disclosed as a previously used vehicle whose prior use as a courtesy/loaner vehicle is clearly stated in all advertising and again before any agreement is signed

OMVIC regulations require dealers to disclose the previous use history of a vehicle as a material fact. A vehicle that served as a loaner or courtesy car cannot be represented as new or generically as a 'demonstrator' — its specific prior use must be clearly disclosed in advertising and again verbally/in writing before any agreement of purchase and sale is executed. The 'demonstrator' designation applies specifically to vehicles used for test-drive purposes by prospective customers or by dealership staff for personal demonstration, not service loaners. Failing to disclose the loaner history constitutes misrepresentation.

A dealer runs a print ad with the headline '1.9% Financing for 84 Months!' in large font. In fine print at the bottom, barely legible at 6-point type, it reads: 'OAC. $5,000 minimum down payment required. On select models only. See dealer for details.' Under OMVIC's advertising standards, what is the primary regulatory problem with this advertisement?

Answer: Material terms that significantly affect the offer — such as minimum down payment and model restrictions — must be presented with prominence reasonably proportionate to the main offer claim, not buried in illegible fine print

OMVIC's advertising rules — consistent with Ontario's broader consumer protection principles — require that material conditions attached to a promoted offer must be disclosed in a manner that is clear, prominent, and reasonably visible relative to the headline claim. A $5,000 mandatory down payment and a restriction to select models are not minor qualifications; they fundamentally alter the nature of the 1.9% offer for most shoppers. Burying these terms in 6-point type while the rate appears in large bold font constitutes misleading advertising. The OAC disclaimer alone does not cure the inadequate disclosure of other material conditions.

A dealer acquires a three-year-old sedan at auction. The vehicle history report reveals it sustained approximately $6,800 in collision damage two years ago, was repaired by a body shop, passed a safety inspection, and was returned to road use — but was never declared a total loss and does not carry a branded/rebuilt title. The dealer intends to advertise it at market value. Under OMVIC rules, what is the dealer's disclosure obligation regarding the prior damage?

Answer: The prior collision damage constitutes a material fact that must be disclosed to prospective buyers before any agreement of purchase and sale, regardless of whether the title is branded

Under the Motor Vehicle Dealers Act and OMVIC's Code of Ethics, a registrant must disclose all known material facts about a vehicle — and significant prior collision damage is explicitly considered a material fact. The obligation to disclose is not contingent on whether the title is branded, whether a total loss was declared, or whether the repairs were professionally completed. A dealer who has access to a vehicle history report revealing material damage history is deemed to have that knowledge and must disclose it. Failing to disclose known prior damage — even on a vehicle with a clean title — exposes the dealer to complaints, fines, and potential licence action.

A manufacturer is offering a $3,500 factory-to-customer cash rebate on a specific model. A dealer advertises the vehicle at $31,999 all-in, which already incorporates the $3,500 rebate as a deduction from MSRP. Nowhere in the ad does the dealer mention the rebate separately. A competitor dealer advertises the same model at $35,499 all-in and prominently features 'PLUS $3,500 manufacturer cash rebate!' A customer complains to OMVIC that the first dealer's ad is deceptive because it 'hides' the rebate. Which statement best reflects the correct OMVIC position?

Answer: The first dealer's ad is compliant; a dealer may present an all-in price that already incorporates a rebate without separately itemizing it, provided the price is accurate and no false claims are made

OMVIC's all-in pricing rules require that the advertised price reflect the total amount the customer will pay (excluding HST and licensing). A dealer is permitted to incorporate manufacturer rebates or incentives into a lower all-in price without separately itemizing them — the obligation is price accuracy, not mandatory itemization of how that price was derived. The first dealer's approach is compliant as long as the $31,999 is genuinely the total purchase price. The competitor's format (showing higher base price minus rebate) is also valid. Neither format is mandated; what is prohibited is advertising a price that excludes legitimate charges, not a price that includes legitimate deductions.

A registered OMVIC dealer is also the personal owner of a 2018 pickup truck that they wish to sell privately — not through the dealership. They plan to list it on a private-party classifieds platform, identify themselves only as a private seller, and omit any mention of their dealer registration. Under OMVIC regulations, which of the following is accurate?

Answer: A registered dealer must identify themselves as a dealer in any vehicle sale advertisement they place, because OMVIC's definition of 'trading' applies to dealers acting in any capacity involving motor vehicles

Under the Motor Vehicle Dealers Act, a registered dealer who engages in the buying or selling of motor vehicles — even vehicles they personally own — is considered to be 'trading' and must comply with all OMVIC registration and disclosure requirements. A dealer cannot shed their registrant obligations by listing a personal vehicle on a private platform and omitting their dealer status. Advertising without identifying oneself as a registered dealer is a breach of OMVIC regulations, exposes the dealer to enforcement action, and denies the buyer protections they are entitled to (such as the right to a Used Vehicle Information Package and statutory protections under the MVDA). There is no 'five vehicles per year' private exemption for registered dealers.