Dealer Obligations When Offering Extended Warranty Products

As a follow up to a recent Dealer Bulletin on third-party warranty providers, OMVIC is providing further guidance to dealers on their obligations when selling or facilitating the sale of extended warranties.

An extended warranty is a contract that covers the cost of repairing or replacing vehicle parts (including labour) beyond what is covered by law or the manufacturer’s warranty.

What Dealers Need to Know 

Under the Motor Vehicle Dealers Act, dealers may only sell or facilitate the sale of extended warranties if the provider is:

• Insured, or
• Secured by a Letter of Credit (LOC)

What Dealers Need to Do

Contact the insurance provider to:

• Confirm the third-party warranty provider and ALL their products are insured.
• Obtain a schedule from the insurer listing all products presently insured, including a description of each product.

Contact OMVIC to:

• Validate the products being sold on behalf of a warranty provider have the required LOC on file with the Motor Vehicle Dealers Compensation Fund (MVDCF) by contacting OMVIC at 1-800-943-6002.

Selling or facilitating sales of extended warranties to consumers from providers not meeting these requirements will result in compliance action.

For any questions, contact OMVIC at 1-800-943-6002.