Buying a used car? Know the vehicle’s history and get an agreement in writing
- Published On
- August 23, 2022
Dealers must legally disclose in writing a vehicle’s past use, history, and condition
Buying or leasing your first car is an exciting moment. A used vehicle is a great option for value-conscious, first-time buyers in Ontario, especially with new cars and trucks in short supply. But before you sign any contract, make sure you know the history of your new ride, so you’re not left stranded at the roadside, saddled with surprise repair bills, or stuck with a vehicle worth considerably less than what you paid for it.
According to Ontario’s Motor Vehicles Dealers Act, 2002 (MVDA), dealers are required to disclose 22 specific items regarding a car’s past usage and condition, and this information can be found on OMVIC’s website, omvic.ca.
These mandatory disclosures are in addition to the dealer’s obligation to all-in price advertising, whereby the price you see is the price you pay. As with all-in price advertising, it’s important to check the fine print in the purchase or lease contract because in Ontario, there is no cooling-off period once the agreement is signed.
“Our consumer support team receives calls about a number of these disclosure issues,” says Maureen Harquail, COO and Deputy Registrar of Ontario’s vehicle sales regulator, OMVIC, which has been assisting car buyers for over 25 years. “Some buyers find out that a vehicle has more damage on it than they expected or believed that the vehicle had no damage at all.”
“The important thing is that dealers are required to share the information,” she continues. “That empowers consumers to make the right decision, but the mandatory disclosures must be in writing. Under the legislation, it’s not enough for the dealer to tell the consumer that the car was previously a daily rental, for example. It must be clearly written in the contract.”
Dealers or salespeople who break the law by concealing information are liable to be disqualified from selling cars. Harquail points to the case of Sai Lu, a vehicle trader from Toronto, who was denied re-entry into the motor sales profession after he ran an illegal, unlicensed side business that salvaged cars and falsely disclosed their history.
“Lu leased them to unsuspecting Uber and Lyft drivers and failed to disclose the mandatory information to buyers about the condition of the vehicles,” she explains. “Not only did that put those lessees in peril, but also their passengers. Another witness bought a car for $5,000 only for it to have problems a few days later. The purchaser subsequently found out that the car had been a write-off, having suffered $11,000 in accident damage. If something looks too good to be true, it probably is. That’s why these disclosures are so important.”
One of the 22 requirements for mandatory disclosure under the MVDA is any collision or incident damage to the vehicle greater than $3,000. As Harquail notes, it doesn’t take much damage to hit the $3,000 threshold, which could equally apply to a new vehicle, if the damage occurred in transit or on the dealer’s lot.
“The goal is to set the consumer up to make the best decision for the vehicle that they need,” says Harquail. “One way to protect yourself is to obtain a Carfax or vehicle history report. These can be helpful for verifying the odometer reading, checking on any history beyond Ontario, and detailing accidents. We encourage consumers to ask for a report and review it carefully.” With that said, consumers can ask for a report but it’s important to note that dealers aren’t required to provide one, or they may charge the consumer for a copy. The consumer can obtain their own vehicle history report if the dealer doesn’t have one available.
The implications of a dealer not disclosing information to the buyer might be safety-related, if the car has hidden defects, or financial – especially if details of a major accident repair in the vehicle’s past have been withheld, which might lead to a dramatic drop in the vehicle’s value.
“OMVIC’s consumer support team is here to help consumers navigate issues, questions, or concerns, either before they purchase a motor vehicle, or if a concern has arisen after the purchase,” Harquail advises. “If something wasn’t disclosed in its entirety in advance of the purchase, we would encourage them to contact OMVIC. We will act as a mediator. We will reach out to the dealer and see if there’s a way of resolving the issue. Sometimes a financial resolution can help the consumer out, or other arrangements can be made.”
During this busy car-buying season, visit OMVIC.ca to access free car-buying resources to get you started and sign up for the quarterly newsletter, Consumer Line.
To Contact OMVIC’s consumer support team, or to see if you are eligible to receive financial assistance from the Compensation Fund, visit omvic.on.ca or call 1-800-943-6002.