| Title: | Advertising Guideline |
| Guideline Topic: | Advertising |
| Legislation: | MVDA |
| Section/Subsection(s): | Multiple and Consumer Protection Act |
| Date Created: | 2022-09-22 |
| Date Revised: | 2024-12-02 |
Advertising-related inquiries are among the most frequent types of questions received by OMVIC. These Guidelines are intended to provide registrants with guidance on OMVIC’s interpretation of the legislative requirements and best practices with respect to advertising.
These Guidelines do not alter the law and should not be considered a substitute for legal advice. Registrants are encouraged to seek independent legal advice as necessary to ensure compliance with their legal obligations. In the event of any discrepancy or conflict in wording between these guidelines and the legislation, the legislation will prevail.
These Guidelines address disclosures in advertising. For information on disclosures in contracts, please refer to OMVIC’s Contracts guidelines.
Advertisements are generally posted by or on behalf of dealers. It is therefore the dealer’s responsibility to ensure that the advertisements that appear in their name or on their behalf comply with all the requirements.
These Guidelines use the terms dealer(s), salesperson(s) and registrant(s) interchangeably. The meaning of this term is contextual and should be interpreted broadly to mean the party who is involved and/or responsible for the advertisement.
An advertisement is any inducement to buy or lease a vehicle and can be posted on a multitude of platforms, including, but not limited to:
These Guidelines are based on the following legislation:
Manufacturers of motor vehicles are exempt from MVDA requirements, but unregistered manufacturers are only permitted to sell or lease a vehicle to a consumer through a dealer that is registered as a general dealer in the subclass of new and used motor vehicles. Unregistered manufacturers are not subject to the advertising requirements set out in the MVDA and the regulations. However, some unregistered manufacturers choose to voluntarily comply with the advertising provisions, such as all-in-pricing requirements to provide transparency to vehicle purchasers. If an advertisement promoting the sale or lease of vehicles references registered dealers or salespersons, those registrants that are referenced in the advertisement are required to ensure that the advertisement is compliant with applicable advertising rules. Dealers who utilize manufacturer advertising templates must also ensure that such templates are compliant with all applicable advertising requirements.
Wholesalers are prohibited from trading with consumers. The definition of “trade” in the MVDA includes advertising or inducing the buying, selling leasing or exchanging of an interest in a motor vehicle. Consequently, wholesalers are not permitted to advertise on forums and platforms that could promote transactions to consumers.
Wholesalers, Exporters, Outside Ontario and Fleet Lessors dealers are also exempt from the requirements of section 36 of the General Regulation including requirements concerning all-in pricing.
The legislation prescribes certain mandatory disclosures in advertisements. These mandatory disclosures must appear in a clear, comprehensible and prominent manner that can be easily noticed and understood. Information that must appear in a clear, comprehensible and prominent manner in advertisements is further described below and includes dealer information, certain required information about the vehicle’s past use if applicable, all-in pricing, and certain details of any extended warranty that is included in the advertised price.
When assessing whether an advertisement is compliant with the clear, comprehensible and prominent requirement, the Registrar will consider all relevant factors applicable to the medium of advertising. With respect to published advertisements, these factors include the size, clarity, legibility, and prominence of the font, location of the information, and, in a broadcast environment, the length of the message.
The use of pop-up or additional windows or notations such as “see dealer for details” are not acceptable replacements for mandatory disclosures. Furthermore, if an advertisement is posted online, a consumer should not have to select a different window to read required disclosure information. The first page that the consumer interacts with should disclose all mandatory information in a clear, comprehensible and prominent fashion.
Advertisements should convey fair and accurate information and should be free of any content that could reasonably be interpreted as false, misleading or deceptive. Advertisements should be understandable and clear, without additional background, research or inquiries.
The following are some examples of false, misleading or deceptive representations referenced in section 14(2) of the CPA:
When assessing whether an advertisement is false, misleading or deceptive, the Registrar will evaluate it from a consumer’s perspective. The language, images, layout or the use of an unreasonably small font in an advertisement or a combination of these factors may be taken into account by the Registrar when assessing the advertisement. If the advertisement conveys multiple inconsistent messages or is ambiguous, or confusing, it may be deemed noncompliant.
For example, OMVIC has observed a recent trend in dealers offering or representing the availability of financing in their advertisements. It is misleading to represent in an advertisement that “financing is available” if the dealer is not able to directly provide or arrange this service for a potential purchaser. This includes instances where a dealer does not have direct access to financing and wholesales the vehicle to another dealer who agrees to conduct the trade and provide or arrange financing on behalf of the consumer.
Advertisements are generally posted by or on behalf of dealers, and they must clearly indicate so. They cannot imply that they are placed by private sellers or unregistered salespersons. To that end, all advertisements must include the dealer’s registered name and contact information (“mandatory dealer information”). Contact information must be one of the ways of contacting the dealer made available to the public by the Registrar, for example, on OMVIC’s website, and can include the dealer’s business address, telephone number (a landline or cell phone), email or website so long as this information was made available to the public by the Registrar.
Registrants do not have the discretion to exclude the mandatory dealer information from advertisements. However, they can include additional information, such as a salesperson’s cell phone number. For example, an advertisement that contains the dealer’s registered name and business address, may also include the salesperson’s cell phone number. This would be deemed compliant because it meets the mandatory dealer information requirements.
Salespersons are permitted to advertise on behalf of dealers. They can add their own personal contact information and can advertise on their personal social media or commercial sites and platforms such as Facebook Marketplace, Kijiji, or Autotrader. However, they must obtain the dealer’s approval prior to posting an ad on behalf of the dealer and they must comply with all the requirements applicable to advertising. This includes publishing the mandatory dealer information, and not inviting the public to a place other than the dealer’s authorized premises.
Advertisements must not misrepresent the specific vehicle that is being offered for sale. Although the legislation does not require dealers to include the vehicle’s stock or VIN number, OMVIC recommends including it as a best practice.
Advertisements must disclose if the vehicle was used as one of the following:
Dealers normally sell vehicles that are roadworthy and certified, and the total advertised price (i.e., all-in price) reflects this fact. Some dealers, however, choose to offer vehicles for sale on an “as-is” or “unfit” basis.
“Unfit” is a term used by the Ministry of Transportation and refers to vehicles that require a safety standard certification (“SSC” or “certification”) for driving. “As-is” is a term used in the MVDA and has an overlapping meaning with “unfit” vehicles. These vehicles generally require repairs, inspection, and certification.
In both instances, a purchaser will have to incur additional costs to ensure that the vehicle is roadworthy. To comply with the all-in pricing rules, advertising of such vehicles requires the inclusion of special disclosure statements.
Advertising unfit vehicles requires the inclusion of the following statement:
Vehicle is not drivable and not certified. Certification is available for $xxx.
If dealers intend to offer certification, the specific fee must be disclosed in the above statement. The certification cost cannot be expressed as a price range and cannot be represented as a mandatory charge. The purchaser must have the right to purchase the vehicle without certification. Vehicles advertised as unfit may not be sold at or above the advertised price using the “as is” clause on the bill of sale.
Advertising as-is vehicles requires the inclusion of the following statement:
This vehicle is being sold “as-is”, unfit, not e-tested and is not represented as being in a road worthy condition, mechanically sound or maintained at any guaranteed level of quality. The vehicle may not be fit for use as a means of transportation and may require substantial repairs at the purchaser’s expense. It may not be possible to register the vehicle to be driven in its current condition.
It is not sufficient to simply use the term “as-is” in advertisements. Dealers are reminded that it is prohibited to sell an “as-is” vehicle with a certification. Dealers are also reminded that all other disclosures are still required for “as is” vehicles, such as information about the vehicle’s past use, if applicable.
Demonstrators, or demos, are legally considered used vehicles. Since demos often qualify for new vehicle incentives and/or financing, dealers occasionally advertise them as new or under the tab or link for new vehicles.
As demos are used vehicles, they must not be listed on a dealer’s website or elsewhere under a tab or link for new vehicles. Instead, they should be listed with other used vehicles or under a separate tab or link for demonstrators.
In addition, an advertisement for any used vehicle including a demo that is from the current model year or the immediately previous model year must indicate in a clear, comprehensible and prominent manner that the vehicle is a used vehicle.
Dealers are permitted to enter into consignment contracts. In such cases, the dealer (the consignee) agrees to sell the vehicle on behalf of the owner of the vehicle (the consignor) and to pay the consignor an agreed fixed amount or commission share of the proceeds of the sale. Dealers are required to ensure that when a vehicle is offered for sale by way of this kind or arrangement, it is clearly indicated, in a manner that is likely to be noticed, that the vehicle is being sold on a consignment basis.
In order to demonstrate compliance with this obligation, it is a best practice to provide this information to a purchaser in writing. For example, notification could be included in the contract for the sale of the vehicle and in advertisements promoting vehicles that are being sold on consignment.
If an advertisement includes the price of a vehicle, that vehicle must be available at that price at the time the advertisement is published.
If an advertisement indicates the price of a vehicle for which there is a limited supply, the advertisement must note the number of vehicles available.
If the advertisement is for a new vehicle that must be ordered from the manufacturer or if it is for an incoming vehicle not yet in stock or on-site inventory, then these limitations must be disclosed in the advertisement, for example “available by factory order.” Not yet in stock means that the vehicle has been ordered, and the dealer has confirmation from the manufacturer that the vehicle will be delivered to them.
If a vehicle has been sold or is no longer available at the advertised price, dealers must promptly remove or update the advertisement to avoid misleading potential purchasers.
If the advertisement includes an illustration of the vehicle, it should be of the actual unit being offered for trade, including colour and model year. Alternatively, a registrant may use a photograph or illustration that is not of the actual vehicle. However, the picture must accurately reflect the make, model, trim level, and condition of the vehicle and the advertisement must indicate in a clear and prominent manner that the vehicle shown is not the actual vehicle offered for sale.
If a dealer advertises a price for a new vehicle using an image or stock photo provided by the manufacturer, the photo must be of a model with features and trim level that is available at the advertised price. If the image is of a higher-priced trim level or colour, the ad must also clearly and prominently include an explanation of the trim level or colour of the vehicle pictured, and the all-in price for that model. For example, advertising a base model price with a photo of an upgraded trim level is misleading.
If a registrant includes the price of a vehicle in their advertisement, the price must include all fees and charges the dealer intends to collect[1]. There can be no hidden fees or charges. The price must be available to all consumers with no qualifications to purchase except for financing. This is commonly referred to as “all-in” pricing requirements.
The only exception to the all-in pricing requirements is HST and licencing provided that the advertisement indicates in a clear, comprehensible and prominent manner that those charges are not included. Licencing refers to the actual cost of vehicle registration and plates. It cannot include any other fees or premium added by the dealer or the salesperson.
Examples of fees or charges that must be included in the all-in price include freight, pre-delivery inspection and pre-delivery expense (PDI-PDE), administration fee, government levies such as air tax, OMVIC fee and safety fee (unless the advertisement contains the unfit or as-is statement).
If a dealer intends to charge for additional products or services, such as those that had been pre-installed on a vehicle, those costs must also be included in the advertised price. Examples include nitrogen and tire protection package, warranties, wheel locks, side rails, tonneau covers, decal striping, security or theft deterrent products or services such as window etching, and fuel. For more details, please see the section on Tied Selling below.
[1] Note: while dealers must include all fees and charges in an advertised price, these fees and charges must be listed separately and itemized on a bill of sale.
Tied-Selling occurs when a vendor requires or induces a consumer to purchase one product or service as a condition for buying another product or service. For example, a dealer may represent to a consumer that an extended warranty, accessory, or insurance policy is mandatory if the consumer would like to purchase a vehicle.
Tied selling is noncompliant with all-in pricing requirements as all mandatory fees the dealer intends to collect from a consumer, except HST and licencing, must be included in the total advertised price. This extends to any product or service that the consumer is not given the option to decline. Moreover, dealers must be clear and truthful in describing and explaining the products, services, programs, and prices connected with the vehicles in which they trade.
Sometimes, dealers want to limit their offers to only one payment option (i.e., finance only). Other times, dealers wish to offer two separate prices for the same vehicle depending on the payment method (i.e. cash price and finance price). Both practices are permitted as long as these conditions and limitations are displayed clearly in the advertisement.
Finance only prices can often be lower than cash prices. This is because dealers receive commissions from lending institutions for facilitating the loan (commonly referred to as “kickbacks”) and can therefore offer the vehicle at a lower price. Advertising a finance only price is an acceptable practice provided that the advertisement clearly discloses the nature of the pricing offered and includes all other required finance disclosures (for details, see subsection d. below).
If registrants wish to offer two different prices – a cash and a finance option, then they must include and clearly identify each price. These prices or notations cannot be listed in fine print or in a disclaimer as that would not be clear, comprehensible and prominent.
If the information about these special conditions is not displayed in this way, then it must appear alongside the price available to everyone, and the price available to everyone should be the most prominent pricing information visible. If the advertisement includes only one price, then that price is assumed to be available to everyone, without conditions or limitations. Without stipulating that a price is subject to limitations (e.g., finance only), a consumer is entitled to assume that they can purchase the vehicle in cash, with no additional costs, except for HST and licencing. Compliance with all the required disclosure obligations will help reduce the risk of misrepresentation and ensure that consumers understand what is and is not included in the price.
Advertisements of financing offers (also known as fixed credit) that include an interest rate or payment amount must also disclose the following information:
Cash price, the term used in the CPA in relation to finance agreements, represents the total, all-in cost of the vehicle advertised under a financing agreement. This is not the cash price for cash deals. Rather, this is the cash price for finance deals. As described above, a cash price for “finance only” deals may be a different amount than a cash price for “cash only” deals for the same vehicle.
Cost of borrowing can be excluded if it consists of interest only, or if the advertising medium is subject to time or space limitations.
The mandatory credit details must be included in an advertisement. The use of fine print, pop-up or additional windows (for online advertisements) or “see dealer for details” are not acceptable replacements for the mandatory disclosures listed and described above.
[1] APR means the annual percentage rate of interest that the purchaser must pay.
[2] Term means the period of time required to pay all principal and interest in full.
Advertisements of lease offers must disclose the following information:
If the advertising medium is subject to time or space limitations, the information listed in points 5-7 can be excluded as long as consumers are directed to another source for the remaining details.
The mandatory lease details must be included in an advertisement. The use of fine print, pop-up or additional windows (for online advertisements) or “see dealer for details” are not acceptable replacements for the mandatory disclosures listed above.
If an advertisement states that an extended warranty is included with the vehicle, it must include in a clear, comprehensible and prominent manner the term of the warranty and any claim limits.
OMVIC monitors compliance with all aspects of motor vehicle sales transactions, including advertising. Dealers who do not comply with applicable advertising requirements may become subject to administrative action or face charges for provincial offences.
The Registrar can address contraventions of advertising requirements by one or more of the following methods: (1) issue an Order to Cease False Advertising or to retract or correct false, misleading or deceptive statements; (2) issue an order requiring one or more registrants to take further educational courses; (3) refer the conduct to discipline before OMVIC’s Disciplinary Tribunal; or (4) Issue a Notice of Proposal to Revoke or apply conditions to the registration of one or more registrants. Additionally, charges could be laid before the Provincial Offences Court.
For additional information, please check OMVIC’s educational resources, including the website, free seminars or webinars, ask your Inspector for assistance, register for the Certification Course, contact the Dealer Support department or seek legal advice.
