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When it’s time to purchase a vehicle how much do you know about your consumer rights?

Buying is a big commitment. In Ontario, consumers have some protection from the Ontario Motor Vehicle Industry Council (OMVIC) if they buy from a registered dealer. OMVIC also license and regulate dealers and administer the Motor Vehicle Dealers Compensation Fund. Their website has other useful information for potential purchasers including information about scams, recalls and buying a car online. OMVIC says it’s a good idea to know the answers to these questions before you sign on the dotted line:

Q. When are you protected by consumer protection laws when you buy a vehicle?

A. Consumer protection legislation only applies when you buy from an OMVIC-registered dealer. There are no consumer protection laws that covers private transactions. If something goes wrong, you’re on your own with little recourse other than to sue civilly.

Q. If you leave a deposit with a registered dealer and that dealer goes out of business before you take delivery of the vehicle, what do you do?

A. You can file a claim with the Motor Vehicle Dealers Compensation Fund. Valid claims are eligible for up to $45,000 in compensation.

Q. If a dealer’s advertisement includes a price for a vehicle what should it include?

A. Dealer must include all fees and charges they intend to collect in the advertised price, except HST and licensing. Examples of fees or charges include freight, pre-delivery inspections, administration fee, government levies such as air tax and OMVIC fee of $10

Q. When selling a used vehicle, what information are dealers required to disclose?

A. By law, dealers must disclose – in writing – 22 specific disclosures. These include previous use as a rental (unless subsequently owned by someone other than a dealer), previous registration in another province or state, required repairs to major components and the true distance the vehicle has travelled. Dealers are required to disclose all material facts about the vehicles they sell.

Q. What are curbside sellers?

A. Curbsiders are illegal, unlicensed dealers who commonly pose as private sellers. They often misrepresent vehicles they sell - many are previous write-offs with undisclosed accident repairs or are odometer-tampered.

Q. What are the potential signs you may be dealing with a curbsider?

A. In order to sell vehicles as quickly as possible curbsiders may hide their identity and the true history of the vehicle. Often, the price is too good to be true. They can do this because the vehicles are commonly accident-damaged, odometer-tampered or rebuilt write-offs. No one sells vehicles for less than they are worth. If a deal sounds too good to be true, it’s a warning, not an opportunity.

Q. At what value is it mandatory for dealers to disclose any collision or incident damage?

A. OMVIC-registered dealers must legally disclose collision damage greater than $3,000. Private sellers do not have this obligation. When buying privately, you should obtain a vehicle history report and have it inspected by a trusted mechanic.

Q. When you buy a car from a registered dealer, is there a cooling off period?

A. No. Don’t sign a contract unless you’re sure you want to complete the transaction.

Q. What do you do if you have a problem with a vehicle purchased from a dealer?

A. OMVIC has a complaints team who may be able to assist should a problem arise with a dealer. For assistance or to file a complain contact 1-800-943-6002, ext. 3942. This is a free service for all Ontarians.

OMVIC also offers these tips:

When Buying from an OMVIC-registered dealer

• Ensure the salesperson understands your needs. Not being listened to? Buy elsewhere.
• Take a thorough test drive – not just around the block.
• Understand all-in pricing, negotiate finance terms, and don’t accept additional charges (except HST/licensing).
• Only pay for optional products/services you want.
• Used vehicle? Ask for a history report; consider an inspection by trusted mechanic.
• Get all conditions in writing (e.g., repairs to be conducted).
• Get all disclosures and promises in writing (e.g., no accidents).
• Carefully read contract (and loan agreement) – there’s no cooling off period once you sign it.

Buying privately? Read this

Take extra care when buying privately, since there’s no protection. Make sure to:

• Ask questions: how long was the vehicle owned? Are there maintenance records?
• Confirm seller’s identity: check ID and proof of ownership.
• Take it on a thorough test drive – not just around the block.
• Do research: order vehicle history report through CARFAX before deciding.
• Carefully review the Used Vehicle Information Package (UVIP) – seller must provide it (ensure all you have all pages).
• Ensure no liens on vehicle (generally available on UVIP or though CARFAX).
• Have vehicle inspected by trusted mechanic before purchase.
• Avoid cash purchases: issue cheque to registered owner.
• Don’t avoid taxes: request receipt that includes seller’s information.

There’s another important tip to consider before you purchase: insurance.

The make and model of vehicle impacts your insurance premiums. Work with your insurance broker to compare the costs of different vehicles you are considering before you sign a contract. It may influence what model you choose to buy and can save money!

RELATED READING:

8 insurance tips for buying your first car

10 most least expensive vehicles to insure in Canada