Advertising and Disclosure Rules Flashcards

A dealership lists a used SUV online at $34,999 'all-in.' Before the customer arrives, the sales manager adds a $499 'paint protection film' that was pre-applied to the vehicle two weeks earlier. At delivery, the dealer presents a bill of $35,498. Under OMVIC's all-in pricing requirements, which statement best describes the dealer's obligation?

Answer: The $499 must be included in the advertised price, as all mandatory charges except HST and licensing must be reflected in the listed price

OMVIC's all-in pricing rule requires the advertised price to include every charge a buyer must pay, excluding only HST and licensing fees. A pre-applied product the buyer cannot decline is a mandatory cost and must be baked into the advertised price. Disclosing it only at the dealership, or treating it as an 'accessory exception,' violates the rule.

A dealer discovers, three days after a purchase agreement is signed but before the vehicle is delivered, that the vehicle's structural repair history was more severe than the CarFax report indicated. The dealer's own technician found evidence of frame welding during a pre-delivery inspection. Under OMVIC disclosure obligations, what must the dealer do?

Answer: Disclose the newly discovered material fact to the buyer before delivery and give the buyer the opportunity to rescind the agreement

OMVIC's Code of Ethics requires dealers to disclose all material facts, and this obligation is ongoing — it does not end at contract signing. Frame damage is a material fact that a reasonable buyer would consider significant. Discovery before delivery triggers an immediate duty to inform the buyer, who must then be allowed to walk away from the deal without penalty.

A dealership's website lists a vehicle at $27,500. The same vehicle appears on a third-party automotive marketplace (which the dealership did not directly post — a data feed syndicated it automatically) at $26,800 due to a feed error. A consumer sees the lower price online, visits the dealership, and demands the $26,800 price. Under OMVIC's advertising accountability rules, which position is most accurate?

Answer: The dealer is responsible for the accuracy of all advertising distributed through their data feeds, and the syndicated listing is considered the dealer's advertisement

OMVIC holds dealers accountable for all advertising that originates from their inventory systems, including auto-syndicated listings on third-party platforms. Because the dealer's own data feed produced the erroneous price, the dealer is the originating advertiser and bears responsibility for the misrepresentation, regardless of which platform displayed it.

A dealer runs a radio advertisement stating: 'Finance any vehicle on our lot for 0% for 84 months!' In reality, 0% financing is only available to customers who qualify for Tier 1 credit, requires a minimum $5,000 down payment, and applies to select models only. Which disclosure failure is MOST critical under OMVIC's advertising standards?

Answer: Advertising a financing offer without clearly disclosing material conditions such as credit qualification, down payment requirements, and vehicle eligibility

OMVIC's advertising rules prohibit misleading representations. A financing promotion is materially misleading when headline terms (0%, 84 months) are broadly advertised but key qualifying conditions — credit tier, minimum down payment, model restrictions — are omitted or buried. These conditions are material because they affect whether the advertised rate is available to most consumers seeing the ad.

A registered OMVIC dealer sells a vehicle at a public auction under their dealer registration. The vehicle had previously been used as a fleet rental for 18 months. The auction listing describes it only as a 'used 2022 sedan.' Under OMVIC's material disclosure rules, what is the dealer's obligation regarding the rental history?

Answer: The dealer must disclose the rental history, as prior use as a daily rental is considered a material fact regardless of the sales channel

OMVIC-registered dealers are bound by their disclosure obligations in all transactions conducted under their registration, including auction sales. Prior use as a daily rental vehicle is explicitly recognized as a material fact under the MVDA framework — it affects resale value, wear patterns, and maintenance history. The obligation to disclose is not contingent on the buyer asking, nor does it disappear in an auction setting.

A dealership advertises a vehicle as 'Certified Pre-Owned — 150-Point Inspection Completed.' In fact, the inspection was performed by the dealer's own unaccredited technician using an informal checklist, and no third-party certification program is involved. Under OMVIC's rules on advertising representations, what is the most accurate assessment of this practice?

Answer: The advertisement constitutes a misleading representation because 'Certified Pre-Owned' implies a standardized, verifiable program with defined criteria that this inspection does not meet

While 'Certified Pre-Owned' does not have a single legislated standard, OMVIC's prohibition on misleading representations applies. The term carries a widely understood consumer expectation of a structured, verifiable certification program — typically manufacturer-backed or through a recognized third party with defined standards. Using it to describe an informal internal inspection misrepresents the nature of the certification to a reasonable buyer, violating the dealer's duty not to make false or misleading claims.