Car Instructions

APA Study For Car Dealers And Curbsiders

TORONTO, ONTARIO-(OMVIC) – 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.