OMVIC Wholesale Transactions and Dealer-to-Dealer Disclosures — Questions and Answers
Question 1: Under the MVDA, which statement best describes the disclosure rules for a vehicle sale from one registered dealer to another registered dealer (a wholesale transaction)?
- No disclosure is required in dealer-to-dealer transactions because both parties are professionals
- The same full retail disclosure requirements that apply to consumer sales apply equally to wholesale transactions
- Specific wholesale disclosure requirements apply that are distinct from the retail disclosure requirements for consumer sales (Correct answer)
- Only federal trade laws apply to dealer-to-dealer transactions; the MVDA does not regulate them
Correct answer: Specific wholesale disclosure requirements apply that are distinct from the retail disclosure requirements for consumer sales
The MVDA establishes a separate set of wholesale disclosure obligations for dealer-to-dealer transactions. These requirements differ in scope and form from the retail disclosure obligations owed to consumers, but they are still mandatory under the Act.
Question 2: In a wholesale dealer-to-dealer contract, what is the selling dealer obligated to disclose about the vehicle being sold?
- Only the vehicle's current odometer reading
- Known material facts about the vehicle, including any damage history, branding, or defects (Correct answer)
- The dealer's original acquisition price and financing arrangements
- The names and contact details of all previous retail owners
Correct answer: Known material facts about the vehicle, including any damage history, branding, or defects
Even in wholesale transactions, the selling dealer must disclose known material facts — including known damage history, brand status (rebuilt/irreparable), and material defects. Misrepresentation between dealers is still prohibited under the MVDA.
Question 3: Which class of dealer registration under the MVDA authorizes a dealer to purchase vehicles from the public but sell only to other registered dealers?
- General dealer
- Broker
- Lease finance dealer
- Wholesaler (Correct answer)
Correct answer: Wholesaler
A 'Wholesaler' is a registered dealer class that may acquire vehicles from the public but is restricted to selling only to other registered dealers — they do not sell directly to retail consumers.
Question 4: What is the defining characteristic of a 'Broker' dealer class under the MVDA?
- A broker sells only to fleet customers and commercial buyers
- A broker arranges vehicle sales between buyers and sellers without taking title to the vehicle (Correct answer)
- A broker exclusively handles lease and finance origination for dealerships
- A broker imports vehicles from outside Canada for resale in Ontario
Correct answer: A broker arranges vehicle sales between buyers and sellers without taking title to the vehicle
A Broker is a registered dealer who facilitates transactions between buyers and sellers — acting as an intermediary — without actually taking ownership (title) of the vehicle. This distinguishes brokers from dealers who buy and resell.
Question 5: A registered dealer purchases a vehicle at a wholesale auction and the selling dealer misrepresents the vehicle's prior damage history in the wholesale disclosure. What recourse does the purchasing dealer have?
- No recourse, as wholesale transactions are entirely buyer-beware between professional dealers
- The purchasing dealer can file a complaint with OMVIC, as misrepresentation in dealer-to-dealer transactions is prohibited under the MVDA (Correct answer)
- The purchasing dealer must resolve the dispute privately through arbitration only, as OMVIC does not regulate wholesale activity
- The purchasing dealer may only seek remedies through the Compensation Fund, not through OMVIC
Correct answer: The purchasing dealer can file a complaint with OMVIC, as misrepresentation in dealer-to-dealer transactions is prohibited under the MVDA
OMVIC regulates all registered dealer conduct, including wholesale transactions. Misrepresentation by one dealer to another in a wholesale disclosure contract violates the MVDA, and the affected dealer can file a complaint with OMVIC.
Question 6: Which of the following is a key structural difference between a MVDA wholesale disclosure contract and a retail disclosure contract?
- Wholesale contracts do not need to include the vehicle's VIN
- Wholesale contracts are not required to be in writing under the MVDA
- Wholesale contracts address disclosure obligations owed to another registered dealer rather than a consumer, and the required content differs accordingly (Correct answer)
- Wholesale contracts are governed exclusively by the federal Competition Act, not the MVDA
Correct answer: Wholesale contracts address disclosure obligations owed to another registered dealer rather than a consumer, and the required content differs accordingly
Both retail and wholesale contracts under the MVDA must satisfy specific content requirements, but the parties are different (dealer vs. consumer) and the required disclosures reflect that distinction. Wholesale contracts must still be in writing and include vehicle-specific information, but the consumer-protection disclosures designed for members of the public are replaced by dealer-specific provisions.
OMVIC Wholesale Transactions and Dealer-to-Dealer Disclosures
Under the MVDA, which statement best describes the disclosure rules for a vehicle sale from one registered dealer to another registered dealer (a wholesale transaction)?