OMVIC Dealer Operations and Business Practices Flashcards

A dealer receives a $4,000 deposit on a vehicle on Thursday afternoon. Due to a statutory holiday, the bank is closed on Friday. Under the MVDA, by when must the deposit be placed in the dealer's trust account?

Answer: By the close of business on the next banking day, which would be Monday

Under the MVDA, trust funds must be deposited by the close of business on the next banking day following receipt. Since Friday is a statutory holiday and banks are closed, the next banking day is Monday. The 48-hour and 72-hour options are incorrect — the MVDA standard is tied to banking days, not calendar hours.

A dealer registered exclusively as a 'wholesale motor vehicle dealer' is approached by a retail consumer who explicitly states they want to bypass retail dealers and purchase directly. The consumer signs a written waiver of retail protections. May the wholesale dealer proceed with the sale?

Answer: No, a wholesale registration prohibits sales to the general public regardless of consumer consent or waivers

A wholesale dealer registration under the MVDA strictly limits sales to other registered dealers — the general public is categorically excluded. A consumer's consent, written waiver, or specific request has no bearing on the dealer's registration conditions. Selling retail would constitute selling outside the scope of registration, a violation regardless of the buyer's intentions.

During a pre-sale inspection, a dealer discovers that a used sedan was previously registered as a limousine service vehicle. The vehicle has since been reupholstered and shows no external signs of its prior commercial use. What is the dealer's obligation?

Answer: The dealer must disclose the prior livery/commercial use in writing on the sales contract before completing the sale

The MVDA requires dealers to disclose certain prior uses in writing on the sales contract, including use as a taxi, limousine, police vehicle, or daily rental — regardless of whether the vehicle currently shows evidence of that use, and regardless of whether the dealer owned it during that period. The obligation is triggered by the dealer's knowledge, not the vehicle's appearance.

A registered motor vehicle salesperson is terminated by their dealership on a Monday. Regarding their OMVIC salesperson registration, which statement most accurately reflects the regulatory outcome?

Answer: The registration automatically becomes inactive upon termination, and the salesperson must apply to have it transferred to a new sponsoring dealer before selling again

When a salesperson's employment at a registered dealership ends, their OMVIC registration becomes inactive — it is not revoked outright. They cannot legally sell vehicles in this inactive state. To resume selling, they must apply to have their registration transferred to a new sponsoring dealer. Registration is dealer-linked, not portable, and cannot be assigned by the departing employer to another individual.

Under OMVIC regulations, which of the following uses of a dealer plate is PROHIBITED?

Answer: Allowing a salesperson to drive a demonstrator vehicle to their personal residence for an extended weekend to facilitate a so-called 'lifestyle test drive'

Dealer plates are issued strictly for legitimate business purposes — transporting inventory, test drives with customers, moving vehicles for service, etc. Allowing a salesperson or employee to use a dealer-plated vehicle for personal use, including taking a demonstrator home overnight or over a weekend under the guise of a 'lifestyle test drive,' is a prohibited use. The personal convenience of the employee does not constitute a legitimate dealer business purpose.

A customer places a $1,500 deposit on a used vehicle and signs no written agreement about the deposit's refundability. Three days later, the customer changes their mind and demands a refund. The dealer argues that preparing the vehicle for delivery cost $300 in labour. What is the legally correct outcome under the MVDA?

Answer: The dealer must refund the full $1,500 because there is no signed written agreement making the deposit non-refundable

Under the MVDA, a dealer may only retain a customer deposit if there is a written, signed agreement that explicitly designates the deposit as non-refundable. Without such an agreement, the entire deposit must be returned — the dealer cannot unilaterally deduct preparation costs or claim a right of retention. This protects consumers from dealers applying informal or verbal 'no-refund' policies after the fact.