Done the deal on a new car? There’s no going back

With no cooling-off period for vehicle purchases in Ontario, buyers must ensure they’re thoroughly prepared before signing on the dotted line

Buying a vehicle, new or used, is a major expense. But unlike other large purchases, such as a new condo or taking out a gym membership, there is no statutory cooling-off period for consumers buying a car in Ontario.

The Motor Vehicle Dealers Act (MVDA) is exempt from the Consumer Protection Act (CPA)’s 10-day cooling-off period. The vehicle sales contract is legally binding unless a dealer has breached the MVDA or CPA in a way that triggers a consumer’s right to cancel.

OMVIC, Ontario’s motor vehicle sales regulator, regularly speaks with consumers who have changed their mind on what they’ve bought. Unfortunately, buyer’s remorse is not a legally valid reason to cancel a vehicle purchase contract.

It may be possible to work on a solution with the dealer, however. Each dealer has its own policy in this situation. Some might choose to return a deposit as a goodwill gesture. Some might try to find another solution, such as applying the deposit to a cheaper car. The dealer may also resell the car to another buyer, and deduct any costs associated with doing so, such as advertising, from your deposit, before returning it. But the dealer is also within its rights to hold you to the contract.

In short, the safest position is to be completely sure of what’s on the bill of sale before signing. OMVIC recommends that buyers do their homework and make sure they understand each element of the contract. Its Complaints & Inquiries Department is always on hand to answer buyers’ questions and it’s always better to ask those questions before you sign.

If you know that your budget is tight, be sure to calculate the full cost of purchasing the vehicle. Beyond the monthly payment, factor in the insurance, fuel and parking costs to make a proper assessment of how affordable that car will be. For used cars, investigate that particular model’s reliability and depreciation.

If you have specific concerns, ensure that appropriate conditions are written into the purchase agreement, as verbal promises made by a salesperson will be hard to prove in the event of a dispute. Examples could include insisting on an inspection by an independent mechanic or ensuring that certain repairs are made before taking delivery.

Putting conditions in writing gives you the proper grounds to file a complaint if the contract is not fulfilled. And unlike buying from a private seller, buying from an OMVIC registered dealer means that if there are problems with the sale, you may be eligible to have OMVIC’s Complaints & Inquiries Department assist you in resolving the issue the dispute.

Finally, trying to cancel a finance or leasing agreement is even harder than canceling the basic purchase agreement. Instead of just your deposit being at risk – with the possibility that the dealer might still come to a negotiated solution – you’ll be committed to the full amount. Payments may start coming out, as per the loan/lease agreement, if the dealer and/or lender are unwilling to cancel.

OMVIC’s Complaints & Inquiries Department often hears difficult stories from buyers who have found problems with their finance agreement after signing. It recommends not signing until you fully understand the agreement and are comfortable with its implications.

A good first step, before you start the buying and financing process, is to get your credit score from an independent agency like Equifax or TransUnion Canada. Then shop around for the best credit terms. Once you have a finance agreement in place, ensure that you’re comfortable with its contents.

Contact OMVIC’s Complaints & Inquiries Department at [email protected] or 1-800-943-6002 for advice and answers to all your car-buying questions.

This story was created by Content Works, Postmedia’s commercial content division, on behalf of OMVIC.