OMVIC Dealer Operations and Business Practices Flashcards

A registered dealer operates a new car dealership and a separate used car lot under the same OMVIC registration. The used car lot closes permanently mid-year. Under the Motor Vehicle Dealers Act, 2002, what is the dealer's obligation regarding the closed lot?

Answer: The dealer must notify OMVIC within 5 business days and surrender the registration for that location

Under OMVIC's registration requirements, dealers must notify OMVIC within 5 business days of any change to their registered locations, including closures. Failing to do so constitutes operating with inaccurate registration information, which is a compliance violation. The registration is tied to specific premises and cannot be passively maintained for a closed location.

A dealer's salesperson leaves the dealership on a Friday. The dealer discovers on Monday that the salesperson had been submitting falsified credit applications to lenders. Under OMVIC's rules, when must the dealer report this to OMVIC?

Answer: Within 5 business days of becoming aware of the misconduct

Dealers have an obligation to report known or reasonably suspected misconduct by registrants to OMVIC promptly. The 5-business-day window applies to reporting material changes and misconduct. Waiting for litigation or an audit would constitute a failure to fulfill the dealer's compliance and reporting obligations under the MVDA, 2002.

A dealer in Ontario sells a vehicle 'as-is' to a consumer. Three days later, the consumer discovers the vehicle has a branded title status (previously rebuilt) that was not disclosed. The dealer argues the 'as-is' clause in the contract covers all defects and non-disclosures. Which statement most accurately reflects the legal position?

Answer: The 'as-is' clause does not override the dealer's statutory duty to disclose a branded title, and the consumer may have grounds for rescission

Ontario's Consumer Protection Act and OMVIC regulations impose affirmative disclosure duties on dealers for material facts such as branded title status. An 'as-is' clause cannot waive statutory consumer protections or override the prohibition on misrepresentation by omission. Non-disclosure of a branded title is a material misrepresentation, potentially entitling the consumer to rescission regardless of the as-is language.

A dealer wants to advertise a vehicle with a promotional price that requires the buyer to finance through the dealer's preferred lender AND purchase an extended warranty. Under OMVIC's advertising standards, how must this price be presented?

Answer: The advertised price must include all mandatory conditions, or the full unconditional price must be prominently displayed with conditions clearly disclosed

OMVIC's advertising standards require that advertised prices be available to all consumers or that mandatory conditions be prominently and clearly disclosed upfront. Burying conditions in fine print or using vague abbreviations like 'O.A.C.' does not satisfy the requirement for transparent pricing. The standard aims to prevent consumers from being misled about the actual cost of acquisition.

A dealer holds a consumer's $5,000 deposit in trust while a vehicle is being sourced from another province. The sourcing falls through after 45 days. The consumer requests a refund, but the dealer claims the deposit is non-refundable under the signed contract. What is the correct outcome under Ontario law?

Answer: The deposit must be refunded because the dealer failed to fulfill the contract through no fault of the consumer, making the non-refundable clause unenforceable in these circumstances

Under Ontario's Consumer Protection Act and OMVIC's framework, a non-refundable deposit clause cannot be enforced when the dealer is unable to deliver the vehicle — the failure is on the dealer's side, not the consumer's. Deposits serve as security for the consumer's commitment; when the dealer cannot perform, the legal basis for retention evaporates. OMVIC can pursue this as an unfair practice.

An OMVIC-registered dealer principal is convicted of fraud unrelated to the motor vehicle trade. OMVIC reviews the registration. Which of the following best describes OMVIC's authority in this situation?

Answer: OMVIC may refuse to renew or may revoke the dealer's registration on the basis that the conviction calls into question the registrant's honesty and integrity, even though the offence was unrelated to vehicle sales

The MVDA, 2002 grants OMVIC broad authority to refuse or revoke registration based on character criteria — specifically whether an applicant or registrant is of good character and honest. A fraud conviction, even outside the motor vehicle industry, directly bears on the registrant's integrity and can form grounds for registration refusal or revocation. OMVIC is not limited to trade-specific offences when assessing fitness.