The New Motor Vehicle Dealers Act, 2002
Ontario government's new Motor Vehicle Dealers Act, 2002 (MVDA 2002) came into force on January 1, 2010. The improved protections include:
- Mandatory disclosures of vehicle history and key features: Dealers are obligated to disclose a vehicle's true condition and history, including structural and flood damage, and the cancellation of the manufacturer's warranty.
- All-inclusive price advertising for new and used vehicles: Dealers must adopt all-inclusive price advertising. This means that dealers must include freight charge, dealer preparation charge and other miscellaneous add-on fees in their advertising, so the only additional fees the consumers should expect to pay is taxes. In addition, when advertising, specific vehicle's past use as a taxi or police cruiser, which often entails harder driving, must be disclosed.
- 90-day contract cancellation for key non-disclosures: 90-day contract cancellation is available for consumers if certain key items are not disclosed by the dealers. These items include: failure to accurately disclose odometer readings; failure to disclose past use of a vehicle as a police cruiser, emergency service vehicle, taxi, limousine or daily rental; and failure to disclose that a vehicle has been branded as rebuilt or salvage.
- Increase of claim coverage from $15,000 to $45,000: Consumers are eligible to have an increased range of claims satisfied by the Motor Vehicle Dealers Compensation Fund. For example, if a consumer made a deposit on a particular car and a dealership goes out of business, a consumer is protected under the Motor Vehicle Compensation Fund and can get the money back.
- Canadian Motor Vehicle Arbitration Plan: Pre-purchase disclosure of whether or not the consumer would have the benefit of the Canadian Motor Vehicle Arbitration Plan is required to resolve any disputes concerning alleged manufacturer defects or implementation of the manufacturer's warranty.
- Maximum fines: Maximum fines under the MVDA 2002 have increased from the previous Act. Maximum fines for individuals are $50,000 - increased from $25,000 - and maximum fines for corporations are $250,000 - increased from $100,000.
- Code of Ethics: Code of Ethics has been adopted to enhance professionalism and improve honesty and integrity in the industry. Dealers are bound by a Code of Ethics which includes dealer-to-dealer disclosure obligations that support full disclosure to the final retail buyer/lessee.
The MVDA 2002 is administered by the Ontario Motor Vehicle Industry Council (OMVIC) on behalf of the Ontario government.