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Toronto, March 7, 2010
- On Saturday, March 6th CTV's
W-Five broadcast "Off
the Lot", a segment reporting
the findings of the Automobile
Protection Association's annual
survey of the industry,
specifically used car dealers
and curbsiders. The APA surveyed
car dealers in Toronto and
Vancouver.
OMVIC welcomes the APA's
annual study since it highlights
the need for purchasers to know
their rights and do their
homework when considering
purchasing or leasing a new car.
There are over 8,000 registered
dealers who handle about 1.4
million retail transactions each
year. The vast majority are
trouble free, but when you see a
deal that's too good to be true,
you really need to do your
homework.
Research includes asking for
a CarProof or CARFAX report and
in some cases, asking your
mechanic to look the car over.
The dealer may allow you take it
off the lot, but if not, your
mechanic may be able to inspect
it at the dealer's premises. If
the dealer refuses, ask yourself
if that great deal is worth it
after all.
OMVIC handles 30,000
inquiries a year from purchasers
which result in the opening of
about 1,200 complaint files. As
a result of OMVIC's complaint
handling activities, almost $1
million is returned to
purchasers each year.
OMVIC inspectors conduct over
2,000 dealer inspections each
year. This includes checking a
random sample of deals to
determine whether the research
the dealer did when buying the
car was adequate and whether the
dealer fully disclosed that
research when selling the
car. When they uncover the kind
of activity highlighted in the
W-Five program, the
dealer is at risk of losing its
registration.
When OMVIC proposes to refuse
or revoke a registration, it's
subject to appeal to the Licence
Appeals Tribunal. OMVIC is very
active in this area, is the
Tribunal's largest "client" and
issues more proposals than any
other jurisdiction in Canada,
possibly in North America.
The government recognized the
challenges of this marketplace -
purchasing a car is a
significant investment,
financing the investment
requires careful thought, and
the consumer has to rely on the
dealer to provide full
disclosure. That's why the new
Motor Vehicle Dealers Act was
introduced on January 1, 2010.
This Act significantly increases
consumer protection and clearly
addresses some of the problems
found in the APA study. The APA
study was conducted before the
new Act came into force.
The new Act requires dealer
advertising to include all
mandatory fees and requires
written disclosure of any fact
that might affect a buyer's
interest in the car or the price
the buyer would be willing to
pay. In some cases, failure to
disclose certain facts – like
the proper mileage or whether
the vehicle was branded salvage
in the past or prior usage as a
taxi – can result in the buyer
being able to get their money
back.
And for those who can't get
their money back, there's a
compensation fund available to
consumers that can pay out up to
$45,000 for eligible claims. The
new Act raised this ceiling from
$15,000.
DEALERS IN THE APA
STUDY
In addition to the
intelligence gathered through
OMVIC's complaints line and its
inspection program, OMVIC relies
on information provided by
sources such as the media and
even other registered dealers.
As to the dealers highlighted
in the APA study, OMVIC
conducted inspections in the
past few days and some of those
dealers may be receiving notice
shortly that OMVIC is proposing
to revoke their registrations.
The dealers who failed to
provide proper or complete
disclosure are at greatest risk
especially if it can be
determined this is a consistent
business practice. OMVIC is
following up with their previous
customers to find out what
disclosure they were provided.
Customers of these dealers –
or any other dealer – are
invited to contact OMVIC if they
have concerns about their recent
purchase. OMVIC can be reached
at 1-800-943-6002. The public
can learn more about their
rights, access Tribunal
decisions and search for
registered dealers at OMVIC's
website:
www.omvic.on.ca.
The practice of adding
excessive fees to an advertised
price reached outrageous
proportions - that's why the new
Act requires an advertised price
to include all fees.
Whether or not a dealer
permits a car to be taken off
the lot depends upon a number of
business factors – often
insurers won't cover loss or
damage to a vehicle if it's
taken off a lot without the
dealer present. Refusing to
allow a car to be taken off site
for an inspection isn't an
illegal practice.
CURBSIDERS IN THE APA
STUDY
Curbsiders in the APA study
have now all been investigated
on a preliminary basis and
charges are being considered
where warranted. Except for one
case where charges had already
been laid, OMVIC can't say with
certainty that charges will be
laid. It will depend on
available evidence and the
consent of a justice of the
peace.
OMVIC charged over
150 curbsiders last year. The
highest penalty imposed by the
court was $375,000 fine and one
year in prison.
Although purchasers should do
their homework, when you buy
from a dealer, the numbers – and
the law – are on your side. You
have the force of the Consumer
Protection Act, the Motor
Vehicle Dealers Act, the
Compensation Fund and
OMVIC working for you. If you
buy from a curbsider you have
little recourse other than to
sue civilly.
About OMVIC
OMVIC licenses and
regulates motor vehicle dealers
in Ontario and enforces the
Motor Vehicle Dealers Act on
behalf of the
Minister of
Consumer Services. OMVIC's
mandate is to maintain a fair,
safe and informed marketplace by
ensuring registration of dealers
and salespersons, inspecting
dealerships, maintaining a
complaint line for consumers,
conducting investigations and
enforcing the Act and its
associated rules and
regulations. OMVIC is also
responsible for administering
the Motor Vehicle Dealers
Compensation Fund on behalf of a
Board of Trustees.
For more information, please
contact:
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