Ministry News

January 12, 2010

Improving Protection for Consumers Buying Cars
McGuinty Government Strengthens Motor Vehicle Sales Sector

NEWS

Ontario is providing consumers with improved protections when they buy or lease new and used cars.

The province’s new Motor Vehicle Dealers Act, 2002 (MVDA) that came into force on January 1, 2010, requires dealers to:

• Disclose a vehicle’s true condition and history before consumers sign contracts.
• Adopt “all-inclusive pricing” when advertising new and used vehicles, including freight, dealer preparation and other miscellaneous charges.

Consumers will also be able to cancel a contract within 90 days if a dealer fails to disclose certain key items such as accurate odometer-readings, the correct year or model, and the previous use of the vehicle.

Improved protection from the Motor Vehicle Dealers Compensation Fund, with an increase from $15,000 to $45,000 in coverage, will also allow consumers to recover deposits should a dealership goes out of business.

The Motor Vehicle Dealers Act, 2002 is administered by the Ontario Motor Vehicle Industry Council (OMVIC) on behalf of the Ontario government.

QUOTES

“Buying a car can be an overwhelming experience with so many things to consider. That’s why we are improving protection for car buyers and lessees with the new MVDA. Consumers deserve to know exactly what they’re getting before they decide to buy.”
— Ted McMeekin, Minister of Consumer Services.

 “With the new Act, financial claim coverage has increased from $15,000 to $45,000. We are happy to support this legislation so that consumers are eligible to have an increased range of claims satisfied by the Motor Vehicle Dealers Compensation Fund.”
— Alan Silverstein, Chairperson of Motor Vehicle Dealers Compensation Fund.

QUICK FACTS

• Sales of new motor vehicles have generally been increasing since the beginning of 2009, following a sharp decline at the end of 2008.
• The number of new motor vehicles sold increased in eight provinces in October 2009 compared to September 2009.

LEARN MORE

Learn about OMVIC’s Buy with Confidence campaign.

For More Information:

Douglas Tindal, Minister’s Office, 416-326-1946
Sue Carroll, Communications Branch, 416-326-7408

ontario.ca/consumerservices-news

Backgrounder

The New Motor Vehicle Dealers Act, 2002

Ontario government’s new Motor Vehicle Dealers Act, 2002 (MVDA 2002) came into force on January 1, 2010. The improved protections include:

• Mandatory disclosures of vehicle history and key features: Dealers are obligated to disclose a vehicle’s true condition and history, including structural and flood damage, and the cancellation of the manufacturer’s warranty.

• All-inclusive price advertising for new and used vehicles: Dealers must adopt all-inclusive price advertising. This means that dealers must include freight charge, dealer preparation charge and other miscellaneous add-on fees in their advertising, so the only additional fees the consumers should expect to pay is taxes.

  In addition, when advertising, specific vehicle’s past use as a taxi or police cruiser, which often entails harder driving, must be disclosed.

• 90-day contract cancellation for key non-disclosures: 90-day contract cancellation is available for consumers if certain key items are not disclosed by the dealers. These items include: failure to accurately disclose odometer readings; failure to disclose past use of a vehicle as a police cruiser, emergency service vehicle, taxi, limousine or daily rental; and failure to disclose that a vehicle has been branded as rebuilt or salvage.

• Increase of claim coverage from $15,000 to $45,000: Consumers are eligible to have an increased range of claims satisfied by the Motor Vehicle Dealers Compensation Fund. For example, if a consumer made a deposit on a particular car and a dealership goes out of business, a consumer is protected under the Motor Vehicle Compensation Fund and can get the money back.

• Canadian Motor Vehicle Arbitration Plan: Pre-purchase disclosure of whether or not the consumer would have the benefit of the Canadian Motor Vehicle Arbitration Plan is required to resolve any disputes concerning alleged manufacturer defects or implementation of the manufacturer’s warranty.

• Maximum fines: Maximum fines under the MVDA 2002 have increased from the previous Act. Maximum fines for individuals are $50,000 – increased from $25,000 – and maximum fines for corporations are $250,000 – increased from $100,000.

• Code of Ethics: Code of Ethics has been adopted to enhance professionalism and improve honesty and integrity in the industry. Dealers are bound by a Code of Ethics which includes dealer-to-dealer disclosure obligations that support full disclosure to the final retail buyer/lessee.

The MVDA 2002 is administered by the Ontario Motor Vehicle Industry Council (OMVIC) on behalf of the Ontario government.