OMVIC Wholesale Transactions and Dealer-to-Dealer Disclosures 5 — Questions and Answers
Question 1: Which registration class lets a business act as an agent arranging vehicle sales between parties without owning the inventory?
- Broker (Correct answer)
- Outside Ontario dealer
- Exporter
- Wholesaler
Correct answer: Broker
A broker acts on behalf of others to arrange trades, which is different from a wholesaler who buys and sells to dealers.
Question 2: A vehicle bought wholesale shows signs of flood damage. What should the retail dealer do?
- Clean the interior and sell without comment
- Disclose it only if the vehicle has a salvage brand
- Disclose it only if the repair cost is under $3,000
- Disclose the flood damage to the consumer in writing (Correct answer)
Correct answer: Disclose the flood damage to the consumer in writing
Fire or water damage is a material fact that must be disclosed to the consumer.
Question 3: A dealer agrees with another dealer to sell a vehicle 'as-is' between them. Can the retail dealer then sell it to a consumer as-is without the required disclosures?
- Yes, if the consumer pays cash
- Yes, if the vehicle is more than 10 years old
- No, consumer disclosure obligations still apply to the retail sale (Correct answer)
- Yes, because the wholesale contract was as-is
Correct answer: No, consumer disclosure obligations still apply to the retail sale
Wholesale terms between dealers cannot override the dealer's legal disclosure duties to a consumer.
Question 4: Which document should a dealer always get when buying a vehicle from another registrant?
- A consumer's driver's licence copy
- A bill of sale or invoice showing the vehicle's VIN and transaction details (Correct answer)
- Only a verbal confirmation of price
- A safety certificate from the selling dealer's mechanic, nothing else
Correct answer: A bill of sale or invoice showing the vehicle's VIN and transaction details
A written bill of sale or invoice with the VIN records ownership transfer and supports later disclosures and record-keeping.
Question 5: An Ontario dealer wants to sell vehicles wholesale to an out-of-province dealer. Which is true?
- No registration is needed for out-of-province sales
- Registration is needed only for vehicles over $50,000
- The Ontario dealer must be registered with OMVIC to trade from Ontario (Correct answer)
- Only the buying dealer must be registered in Ontario
Correct answer: The Ontario dealer must be registered with OMVIC to trade from Ontario
Anyone trading motor vehicles in Ontario, including wholesale, must hold the right OMVIC registration.
Question 6: A selling dealer discloses in writing that a vehicle was previously leased to a daily rental company. What is the buying dealer's next obligation?
- Repaint the vehicle to remove rental markings and say nothing
- Disclose it only if the mileage is high
- Keep it confidential to protect the selling dealer
- Pass this history on to any consumer buyer in writing (Correct answer)
Correct answer: Pass this history on to any consumer buyer in writing
Prior daily rental use is a required consumer disclosure, so the buying dealer must carry it forward.
Question 7: Which practice best protects a dealer that buys at dealer-only auctions?
- Relying only on the vehicle's appearance in photos
- Skipping history checks for vehicles under five years old
- Reviewing announcements, condition reports, and vehicle history reports before bidding (Correct answer)
- Assuming auction vehicles have no brands
Correct answer: Reviewing announcements, condition reports, and vehicle history reports before bidding
Due diligence before purchase helps the dealer find material facts it will later be required to disclose.
