OMVIC supports you in your vehicle buying journey to make sure you are confident and informed about your purchase.
From understanding car dealer ads to negative equity and long-term loans, we put you in the driver’s seat so you can make an informed purchase.
Buying a motor vehicle is one of the largest financial commitments you will make. When you are in the market for a motor vehicle, there are certain things you should be keeping in mind.
You only have protections under the Motor Vehicle Dealers Act (MVDA) if you are buying from an OMVIC-registered dealer
Ways to help you make sure that a dealer or salesperson is registered with OMVIC:
Being responsible for a vehicle isn’t necessarily cheap. When buying or leasing a car, you want to consider all the associated costs, not just the ones related to the initial purchase.
Things to consider as you are budgeting:
When you have a specific budget in mind, be sure to pay attention to the vehicle price advertised. All-in price advertising means that the price advertised includes any mandatory fees or charges that dealer intends to charge. The price that’s advertised should be the price you pay (excluding HST and licensing).
You’ve decided on your vehicle: the final step is signing the contract and completing the transaction. Don’t forget there is no cooling-off period in Ontario so you’re committed after you sign, except in some specific circumstances.
In Ontario, motor vehicle sales are final upon signature. As such, whether an agreement can be cancelled is at the discretion of the seller. If you’ve only signed a bill of sale, then walking away may mean you forfeit your deposit.
Dealers each have their own policy when it comes to canceling agreements. Some have no issues returning a deposit to a consumer and allowing them to walk away, while others may agree to cancel but refund only a portion. Moreover, some dealers may wait until the vehicle is resold to calculate their losses and will discuss a refund only then.
The losses a dealer incurs are referred to as Liquidated Damages. Liquidated damages arise from the expenses a dealer may have already incurred in when selling the vehicle to you (for example, advertising, freight and administrative costs, cost for the loss of profit resulting from the cancellation).
Of course, like any retailer, a dealer can deny cancellation of the agreement. In this case, it’s suggested that you speak with either the owner or general manager of the dealership to determine what options, if any, are available to you.
If you give a dealer a deposit for the purchase of a vehicle but no contract is signed, you can request your deposit back at any time and the dealer must comply.
Conditions of sale help to set out in clear terms what the seller and buyer are obligated to do before a purchase is complete. If those commitments aren’t met, the deal can be cancelled, and the deposit should be returned.
Common conditions
Conditions should be based on what is important to you and may include:
Subject to acceptable financing.
Subject to a mechanical inspection
Subject to repairs being made
Subject to a spouse/partner/parent’s approval
First-time car buyers may want to consider including a condition related to finding affordable insurance. Often, young car buyers, or car buyers who have a poor driving record, may be offered expensive insurance rates, with monthly payments that are higher than their car loan payment.
In Ontario there is no cooling-off period when it comes to buying or leasing a car. Sales are final once contracts are signed unless the dealer has failed to make certain specified disclosures.
The MVDA allows you to cancel a contract within 90 days of delivery of a vehicle if the dealer and contract fails to disclose, or fails to disclose in a timely way:
For used vehicles only, a margin of error is allowed to the dealer when they determine the total distance driven, or, when they cannot determine the total distance driven, but can determine the distance driven as of some past date.
The disclosure of distance made by the dealer is deemed to be accurate if it is within the lesser of five per cent or 1,000 kilometers of the correct distance required to be disclosed. This does not apply to new vehicles.
Consumers who are eligible to cancel a contract due to the failure of a dealer to make one of the required disclosures under the MVDA can send a letter to the dealership informing them of the intention to cancel the agreement. We recommend sending the letter in a manner that provides proof of delivery.
We offer a variety of supports that will help you throughout your vehicle-buying journey including education through online webinars or in-person sessions. These are perfect for first-time car buyers, community groups, and organizations.
Contact our education team at [email protected] for more information about our education or to schedule a session and regularly check out our events calendar to see what’s coming up.
