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OMVIC Blog: Car Buying Tips

The Motor Vehicle Dealers Compensation Fund – It’s Your Right If Something Goes Wrong

Jun 17

Written by: OMVIC Communications
Friday, June 17, 2016  RssIcon

 

When Vehicle Purchases Go Sideways, Consumers May Still Be Protected

 

 

Georgina and Connor McDavid (we’ve changed the names of the consumers in this story to protect their privacy) were proud of their new-to-them 2010 Dodge Grand Caravan. So imagine their surprise when Georgina showed it to a relative who told her she’d owned the same van – not the same kind of van, that specific van – some time before. Georgina’s surprise turned to shock and anger when her relative then told her the odometer was showing significantly fewer kilometers than it did when she owned it! Because Georgina and Connor had bought the vehicle from a registered dealer, they contacted OMVIC, Ontario’s vehicle sales regulator. OMVIC investigated and the couple’s fears were confirmed: Ministry of Transportation records showed the previous owner had reported an odometer reading of 178,461 kms. When Georgina and Connor bought the vehicle, the odometer read 75,309 kms and, to cause even more confusion, the bill of sale indicated 125,621 kms. At that point they realized they’d paid much more for the vehicle than it was actually worth.

Georgina and Connor contacted the selling dealer who didn’t help….but there was a silver lining to this story. Because they’d bought from an OMVIC-Registered Dealer, Georgina and Connor were protected by the Motor Vehicle Dealers Compensation Fund

 

For 30 years, the Motor Vehicle Dealers Compensation Fund has protected consumers like Georgina and Connor. Since its creation in 1986, and funded by all registered dealers in Ontario, the Compensation Fund has paid out more than $5 million to Ontario consumers. In 2015, the Compensation Fund received 23 claims; it paid $184,000 to 22 consumers. Consumers who are eligible for compensation may qualify for up to $45,000 per vehicle transaction. Georgina and Connor received $4,000.

Marcus Phelps also had a problem with a vehicle purchase. It was the summer of 2013 and Marcus was looking for a newer pickup. A dealer agreed to take Marcus’ 2011 Dodge Ram on trade for the purchase of a Ford truck giving a trade-in allowance of $37,100. The agreement also included refinancing and the dealer was to payout the $37,100 still owing on Marcus’ Ram. But the dealer didn’t pay out the loan so the bank demanded payment from Marcus. Understandably, he refused to pay it; his credit took a pounding. As in the McDavid case, the selling dealer didn’t help. But luckily for Marcus, like Georgina and Connor, he’d bought from an OMVIC-Registered Dealer so he too was protected by the Motor Vehicle Dealers Compensation Fund, which paid the outstanding loan on Marcus’ behalf. “The vast majority of vehicle transactions go well,” stated Terry O’Keefe, OMVIC Director of Communications and Education. “But in those rare instances when something goes wrong, consumers can turn to OMVIC for help and the Compensation Fund provides additional protections that are unrivaled in North America.”

As for the dealers in these cases: Georgina and Connor had purchased from Your Car Auto Finance. The dealership and its sole officer and director, Derek Booth, had their licences revoked by OMVIC. The salesperson, Scott Edwards, was fined $12,500 for breaching OMVIC’s Code of Ethics. Marcus had dealt with Craig Terry Investments Ltd.; OMVIC revoked the dealer’s licence. Note: no individual named Craig Terry was party to the proceedings referenced above.

To learn more about the Motor Vehicle Dealers Compensation Fund or how OMVIC protects Ontario’s consumers, visit omvic.ca.

 

 

 



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