Important Bulletin regarding Regulations under the Motor Vehicle Dealers Act, 2002
Regulations have been filed under the Motor Vehicle Dealers Act, 2002, to come into force on January 1, 2010.
Businesses should review the new regulations, which are available online at www.e-laws.gov.on.ca.
By filing the regulations now, the Ontario government offers businesses approximately six months to prepare for compliance with the new Act and regulations. The new standards support a strong economy and give businesses a level playing field on which to compete. Compliance with the new standards will help businesses to increase customer satisfaction and remain competitive.
The new Act significantly modernizes the regulatory regime for motor vehicle dealers and salespersons. Some of the changes include:
- Code of Ethics – to strengthen protection for buyers and lessees of motor vehicles, dealers will be bound by a Code of Ethics which includes dealer–to–dealer disclosure obligations that support full disclosure to the final retail buyer/lessee.
- Increased vehicle sales/lease contract disclosures – dealers will be obligated to disclose vehicle condition and history, including an extensive number of areas of potential concern such as “vehicle branding” (classification as salvage, irreparable or rebuilt under the Highway Traffic Act), fire and flood damage, structural damage and manufacturer’s warranty cancellation.
- Improved advertising disclosures – the general regulation requires that dealers adopt “all in-inclusive pricing” when advertising prices. In addition, when advertising, specific vehicles past use as a taxi or police cruiser, which often entails harder driving, must be disclosed.
- Increased publicity for the Canadian Motor Vehicle Arbitration Plan which protects buyers and lessees of motor vehicles – CAMVAP disclosures will be required on the sales and lease contracts of all motor vehicles to which coverage is applicable. Disclosure will also be required on all motor vehicles for which CAMVAP could be available but a manufacturer has chosen not to participate.
- Stronger remedies – contract cancellation is available to buyers and lessees within a specified time period, over key non-disclosures such as: failure to accurately disclose odometer readings; failure to disclose the make, model, trim level or model year of a motor vehicle; failure to disclose past use of a vehicle as a police cruiser or emergency service vehicle; failure to disclose past use of a vehicle as a taxi or limousine; failure to disclose that a vehicle was previously leased on a daily basis; and failure to disclose branding under the Highway Traffic Act.
- Compensation Fund improvements – claim coverage increased from $15,000 to $45,000. Consumers will be eligible to have an increased range of claims satisfied by the Motor Vehicle Dealers Compensation Fund. The Fund will be authorized to promote public awareness of its existence.
- Increased penalties for convictions – maximum fines under the MVDA 2002 will be increased from the previous Act. Maximum fines for individuals will be $50,000 (increased from $25,000) and maximum fines for corporations will be $250,000 (increased from $100,000).
To review the regulations, visit the Government of Ontario e-Laws website.
The MVDA 2002 will be administered by the Ontario Motor Vehicle Industry Council, www.omvic.on.ca
