Full disclosure: Every used vehicle has a story that must be told

You wouldn’t buy a house or condo without knowing its history. The homebuyer’s inspection informs you of any maintenance concerns, substandard prior repairs, or electrics that are not up to code. It’s the same when buying a used car. In fact, in Ontario, dealers are obliged under the Motor Vehicle Dealers Act (MVDA) to disclose in writing major events in the vehicle’s past.

These important pieces of information are known as mandatory disclosures. There are 22 requirements for mandatory disclosure under the MVDA, including any collision or incident damage to the vehicle greater than $3,000, out-of-province history, odometer discrepancies, use as a rental or taxi, or a record of a previous theft – a particular concern at a time of rising auto theft in the province.

A dealer failing to disclose information to the buyer could have safety-related implications if the car has hidden defects, or they could lead to financial impacts – 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, Ontario’s motor vehicle sales regulator, often receives calls to its help desk from concerned consumers who’ve found out after signing the contract that all was not as it seemed when they committed to buying their used vehicle.

“We also hear about partial non-disclosures,” says Tim Hines, OMVIC’s director of consumer support. “Maybe the dealer will declare that the vehicle was in a $20,000 accident but fails to disclose that it was a total loss. Or perhaps they’ll disclose its total loss but not the dollar cost of repair.”

Legislation is in place to protect consumers if a mandatory disclosure has not been made. Failing to record six particular disclosures, mostly related to prior use, will trigger an automatic cancellation of the sales contract if reported in writing to the dealer within 90 days of the sale’s completion.

Dealers or salespeople who fail to make mandatory disclosures can face administrative penalties. Additionally, consumers with a missing disclosure under General Regulation 50 who are refused help by the dealer may be eligible for access to OMVIC’s compensation fund.

The remaining disclosures – fire or flood damage, a cancelled warranty, and more – are covered by the Consumer Protection Act (CPA). However, in these cases, the dealer may not be legally obligated to cancel the sales contract, which in Ontario is binding once signed, with no cooling-off period. Again, OMVIC recommends contacting its consumer support team right away if a failure to disclose comes to light. Its advisors can discuss how best to proceed, and, in most cases, the dealer will subsequently come to an agreement with the vehicle buyer, rather than force the consumer to pursue a civil court case.

Whatever the non-disclosure, it’s always harder to make things right once a deal is done, so OMVIC advises vehicle buyers to take steps to protect themselves before purchasing a used vehicle, regardless of what the dealer discloses. Obtaining a used vehicle information package (UVIP) and/or a Carfax history report is a must. It is however important to note that a UVIP won’t provide accident info or out-of-province info. It also has limited “self-reported” kilometer and lien info.

“Make sure you have the correct vehicle identification (VIN) number for the vehicle history report,” cautions Hines. “Here at the help desk, we’ve seen examples of when someone has discovered years later that they were given a vehicle history report with the right make and model but the wrong VIN. Check the date on the history report, too, and make sure it’s up to date. Finally, an independent mechanical inspection is another good idea and may reveal tell-tale signs of undisclosed issues.”

OMVIC has been delegated responsibility for administering and enforcing the Motor Vehicle Dealers Act (MVDA). Visit omvic.ca to learn about your consumer rights when you purchase from an OMVIC-registered dealer and sign up for OMVIC’s monthly newsletter.

Contact OMVIC’s consumer support team at [email protected] or 1-800-943-6002 for advice and answers to all your car-buying questions.

OMVIC also offers free education services and webinars for consumers upon request, email [email protected] for more information on our services and materials.

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