OMVIC MVDA and Legislation 3 — Questions and Answers
Question 1: What is the primary purpose of the Motor Vehicle Dealers Compensation Fund (MVDCF) under the MVDA?
- To cover OMVIC's administrative and operating costs
- To fund public advertising campaigns promoting ethical dealers
- To compensate consumers who suffer financial loss due to the fraudulent or dishonest conduct of a registered dealer or salesperson (Correct answer)
- To pay for mandatory safety inspections on used vehicles
Correct answer: To compensate consumers who suffer financial loss due to the fraudulent or dishonest conduct of a registered dealer or salesperson
The MVDCF is a consumer protection fund that provides compensation to eligible buyers who have lost money due to fraudulent or dishonest acts by a registrant.
Question 2: Which prior use of a vehicle must a registered dealer disclose on the Condition Disclosure Statement?
- The vehicle was previously owned by a private individual
- The vehicle was previously used as a daily rental or police vehicle (Correct answer)
- The vehicle was previously registered in another Canadian province
- The vehicle was serviced exclusively at independent repair shops
Correct answer: The vehicle was previously used as a daily rental or police vehicle
Dealers must disclose on the CDS if a vehicle was previously used as a taxi, limousine, police car, emergency vehicle, or daily rental, as these uses can significantly affect value and condition.
Question 3: If OMVIC determines that a registered dealer has engaged in fraudulent conduct, what regulatory action can OMVIC take?
- Issue a formal written warning letter only
- Refer the matter solely to the Automobile Protection Association
- Suspend or revoke the dealer's registration and impose conditions or restrictions (Correct answer)
- Automatically issue a refund of the consumer's purchase price from OMVIC funds
Correct answer: Suspend or revoke the dealer's registration and impose conditions or restrictions
OMVIC has authority under the MVDA to suspend, revoke, or impose conditions on a registrant's registration for fraudulent or dishonest conduct.
Question 4: Under the MVDA, which of the following best describes the scope of the term 'motor vehicle'?
- Only passenger cars and light-duty trucks licensed for road use
- Cars and trucks but not motorcycles or recreational vehicles
- Automobiles, trucks, motorcycles, motor-assisted bicycles, and other prescribed motorized vehicles (Correct answer)
- Any vehicle powered by an engine, including boats and aircraft
Correct answer: Automobiles, trucks, motorcycles, motor-assisted bicycles, and other prescribed motorized vehicles
The MVDA applies to a broad category of motorized vehicles including motorcycles, snowmobiles, and other prescribed vehicles, not just passenger cars.
Question 5: A dealer completes a vehicle sale without providing the buyer with any written contract. Under the MVDA, this failure is:
- Acceptable if the transaction amount is under $5,000
- A violation of the MVDA that can result in regulatory action against the dealer (Correct answer)
- Acceptable provided the buyer acknowledged the terms verbally in front of a witness
- Only a violation for sales of new vehicles, not used vehicles
Correct answer: A violation of the MVDA that can result in regulatory action against the dealer
The MVDA requires dealers to provide buyers with a written contract, and failure to do so is a violation subject to regulatory action.
Question 6: Which statement correctly describes the nature of a salesperson's OMVIC registration?
- It is independent, allowing the salesperson to trade vehicles for any registered dealer at any time
- It is tied to a specific registered dealer, and trading vehicles outside that authorization is prohibited (Correct answer)
- It is optional for individuals who work at a family-owned dealership with fewer than five employees
- It is valid only for the category of vehicles the salesperson completed training for
Correct answer: It is tied to a specific registered dealer, and trading vehicles outside that authorization is prohibited
A salesperson's registration is linked to a specific registered dealer, and the salesperson may only trade motor vehicles on behalf of that dealer.
Question 7: A dealer advertises a vehicle at $19,999 but adds undisclosed dealer administration and documentation fees at the point of sale. Under OMVIC rules, this practice is:
- Permitted if the fees are clearly posted on a sign in the showroom
- Permitted if the combined extra fees do not exceed $500
- A violation of advertising standards, because all dealer-controlled fees must be included in the advertised price (Correct answer)
- Permitted provided the buyer receives written notice of the fees 24 hours before signing
Correct answer: A violation of advertising standards, because all dealer-controlled fees must be included in the advertised price
OMVIC's all-in pricing requirement mandates that dealer-controlled fees be included in the advertised price to prevent deceptive low-price advertising.
OMVIC MVDA and Legislation 3
What is the primary purpose of the Motor Vehicle Dealers Compensation Fund (MVDCF) under the MVDA?