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OMVIC Blog: Car Buying Tips

Buying a used car? Here’s what dealers must tell you about its past

Oct 20

Written by: OMVIC Communications
Wednesday, October 20, 2021  RssIcon

For many first-time car-buyers, a used vehicle is often their first entry into the market. However, when buying used, it’s important to understand what a dealer must disclose to you on a bill of sale to protect yourself throughout the car-buying process.

The mandatory disclosure requirement is one of the key pillars of protection offered to Ontario consumers who purchase from an OMVIC-registered dealer and is enforced by OMVIC to keep consumers safe. In fact, in June 2021 OMVIC denied a Toronto man named Sai Lu’s re-entry into the motor vehicle sales profession after he ran an illegal, unlicensed side business buying salvaged cars and falsely disclosing their history. Lu leased them to unsuspecting Uber and Lyft drivers and failed to disclose mandatory information to the buyers about the condition of the vehicles, putting both drivers and their passengers’ safety at risk.

What are mandatory disclosures?

Ontario’s Motor Vehicle Dealers Act, 2002 (MVDA) has 22 explicit requirements dealers must disclose about a car’s past use, repair history, and condition. For example, if a vehicle was in an accident and damages exceeded $3,000, dealers must clearly disclose this information in writing so buyers can make an informed decision about whether the vehicle is right – or safe – for them.

In Lu’s case, he failed to accurately disclose the history of the vehicles he leased. Buyers were unaware these vehicles had been salvaged after sustaining extensive damage and were written off by insurance companies.

Heavily damaged vehicles can be safety hazards for drivers and buyers. When dealers fail to disclose these important details, it puts everyone at risk

What should dealers disclose?

There are many aspects of a car’s history dealers must disclose, including if the vehicle was registered in another province or used as a daily rental. Dealers must also provide information about changes or repairs made to a vehicle, and which parts specifically were affected. They must also disclose the true distance a vehicle travelled and cannot change odometer readings.

In the case against Sai Lu, two witnesses who leased cars from Lu said the cars’ history was not disclosed. A third witness testified they bought a car for $5,000, only to have it suffer problems a few days later. The witness said they were unaware the car was a write-off and suffered $11,000 in accident damages.

Should disclosures be in writing?

All mandatory disclosures must be in writing. Verbal disclosure does not meet MVDA requirements. Even if the dealer or salesperson tells you about a previous collision, ensure it is still clearly disclosed in writing on the contract.

Stay safe by calling OMVIC

Get informed. Know what a dealer must disclose to you on a bill of sale to protect your financial well-being and your safety. Work closely with OMVIC and access its resources throughout the car-buying process for a safer way to buy. Protect yourself today by visiting omvic.ca or call our Consumer Support team at 1-800-943-6002 to learn about disclosures, find free car-buying tips and more.

 

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