OMVIC OMVIC MVDA and Legislation 5 — Questions and Answers
Question 1: Under the MVDA, what is the minimum period a dealer must retain a copy of a completed contract of purchase and sale?
- 1 year
- 3 years (Correct answer)
- 5 years
- 7 years
Correct answer: 3 years
Dealers are required to keep copies of completed contracts and related transaction records for a minimum of three years.
Question 2: Which of the following is an example of an unfair practice prohibited under the MVDA's consumer protection provisions?
- Offering an extended warranty on a used vehicle
- Representing a used vehicle as new (Correct answer)
- Advertising seasonal financing promotions
- Providing a Carfax report to the buyer
Correct answer: Representing a used vehicle as new
Misrepresenting a used vehicle as new is an unfair practice under the MVDA and constitutes deceptive dealing.
Question 3: OMVIC's Registrar has the authority to conduct inspections of a dealership under the MVDA. Which of the following cannot be demanded during such an inspection?
- Access to the dealer's trust account records
- Copies of sales contracts
- The dealer's personal tax returns unrelated to the business (Correct answer)
- Inventory records
Correct answer: The dealer's personal tax returns unrelated to the business
OMVIC inspectors can examine business records relevant to the dealership, but personal tax returns unrelated to the business are beyond the scope of an MVDA inspection.
Question 4: Under OMVIC rules, when a dealer takes a trade-in vehicle, the dealer must provide the customer with:
- A certified appraisal from a third party
- Written confirmation of the trade-in value and vehicle identification (Correct answer)
- A guarantee to resell the trade-in within 30 days
- A full mechanical inspection report
Correct answer: Written confirmation of the trade-in value and vehicle identification
The dealer must document the agreed trade-in value and identify the trade-in vehicle in writing as part of the transaction record.
Question 5: A consumer signs a purchase contract at a dealership but wishes to cancel it the following day citing buyer's remorse. Under the MVDA, what is the general rule?
- The consumer has a mandatory 10-day cooling-off period for all vehicle sales
- There is no automatic right to cancel; the dealer's cancellation policy governs (Correct answer)
- The consumer may cancel within 48 hours for a full refund
- Cancellation is allowed only if the vehicle has not yet been delivered
Correct answer: There is no automatic right to cancel; the dealer's cancellation policy governs
Unlike some consumer contracts, there is no statutory cooling-off period for motor vehicle purchases under the MVDA; cancellation rights depend on the contract terms and circumstances.
Question 6: Under the MVDA, which of the following situations would most likely constitute 'conducting business from an unregistered location'?
- A dealer attending a charity auction as a spectator
- A salesperson regularly meeting clients and closing deals from a personal residence not listed on the registration (Correct answer)
- A dealer temporarily relocating their office due to renovations with OMVIC's knowledge
- A salesperson attending an off-site training seminar
Correct answer: A salesperson regularly meeting clients and closing deals from a personal residence not listed on the registration
Using an unregistered location — such as a personal residence — to habitually conduct sales activities violates the MVDA requirement that all business locations be registered.
Question 7: The MVDA requires dealers to place customer deposits into a trust account. Which statement about this trust obligation is correct?
- Deposits may be used for dealership operating expenses if repaid before the deal closes
- Deposits must be kept separate from the dealer's general operating funds at all times (Correct answer)
- Deposits only need to be held in trust if they exceed $500
- The trust requirement applies only to deposits on new vehicles
Correct answer: Deposits must be kept separate from the dealer's general operating funds at all times
Customer deposits must be held in a designated trust account and kept completely separate from the dealer's general funds, regardless of the deposit amount or vehicle type.
OMVIC OMVIC MVDA and Legislation 5
Under the MVDA, what is the minimum period a dealer must retain a copy of a completed contract of purchase and sale?