Trillium Automobile Dealers Association

Serving the interest of Ontario New Car
and Truck Dealerships for over 100 years

If you lease, make sure your sales rep is registered

Created on Friday, 08 October 2010

Dear Joel:

A few years ago, I returned my company car to my leasing company. I had sourced a pre-owned vehicle from a local new car dealership. Upon reaching auction for purchase by a wholesaler, I was dismayed to learn that I would realize far less residual value than contemplated because a search revealed that the vehicle had been in an accident at a time, prior to my leasing company buying the car for on-lease to me. At no time was this disclosed by the dealer or the leasing company, and I certainly would not have selected the vehicle had I been told.

The vehicle sold at auction for thousands less than expected, and it was at a cost to me because of the lower residual value. Until your recent column appeared, I presumed it was "buyer beware." Do I have any recourse here?

I'm not sure who sourced the vehicle and with whom this reader negotiated the lease. The key words here are "in an accident at a time prior to my leasing company buying the car for on-lease to me."

OMVIC (the Ontario Motor Vehicle Industry Council) regulates the retail purchase and sale of motor vehicles via the Motor Vehicle Act (MVDA). A revised version of this act was implemented at the beginning of this year (MVDA 2002).

Registration of all dealerships and their sales staffs was (and still is) mandatory under the old and new acts.

Lessors who registered under the old act were also regulated by OMVIC.

Consumers who used a broker (personal shopper), car-buying service or other non-registrant had no consumer protection via OMVIC. Although these types of agents frequently charged for their services, they were often not OMVIC registrants, therefore unregulated under the old MVDA.

All OMVIC registrants must disclose material information on vehicles offered for sale. No such requirements exist for non-registrants.

On Jan. 1, the new Motor Vehicle Dealers Act (MVDA) 2002 was implemented. Changed regulations continue to require lessors to be registered and governed by OMVIC. Brokers (as defined under the new act) are now also required to be registered, but their activities are limited.

Incredulously, a recent query by the Toronto Automobile Dealers Association showed only four brokers in Ontario had registered with OMVIC under the new act. Reliance on voluntary registration by brokers and others seems to undermine the intent of the new legislation.

The new MVDA legislation offers consumers additional protection provided they are dealing with an OMVIC registrant. Purchase agreements can now be rescinded within a specified period for non disclosure of material facts.

New contracts now used by OMVIC registrants must include specific details, including price, taxes, fees, a vehicle's condition and history, finance terms, trade details, etc.

With the exception of private party transactions, the revised act is meant to extend full disclosure requirements to vehicle purchasers in Ontario.

This supposed leveling of the playing field, extending OMVIC regulations to more (but not yet all) persons or companies engaged in the business of consulting, advising, recommending, influencing the sale or leasing of motor vehicles in Ontario, falls short, as non- registrants of OMVIC are still exempt from any regulations.

Assuming that this reader entered into the transaction prior to Jan. 1, he may have dealt with a non-registrant of OMVIC at the time. So, remedies under the MVDA may not be available. Even under the new act, dealing with unregistered brokers, personal shoppers or car-buying services, etc. provides no recourse via OMVIC.

Don't be afraid to ask for proof or registration from any franchised new car dealer, since all are OMVIC registrants and willingly display the OMVIC "Buy with Confidence" decal on their door.

Visit www.omvic.on.ca and search for the dealer/salesperson under "Registration."

Go back to Cohen Editorials 2010 »

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