How to avoid hidden surprises when buying a used car
- Published On
- October 24, 2023
Dealers are breaking the law if they knowingly fail to disclose, in writing, information about a vehicle’s history.
Used car prices have hit historic highs thanks to a shortage of new vehicles in the wake of the Covid-19 pandemic. That’s made it more important than ever for consumers to ensure they know their money is safe when potentially spending tens of thousands of dollars on a previously owned car or truck.
In Ontario, the Motor Vehicle Dealers Act (MVDA) has 22 explicit requirements that dealers must disclose about a car’s past use and condition. For example, if a vehicle was in an accident and damages exceeded $3,000, dealers must clearly disclose this information in writing so buyers can make an informed decision about whether the vehicle is right – or safe – for them.
If they fail to disclose important information, it might lead to consumers overpaying for a vehicle, experiencing what appears to be premature wear and tear, or potentially incurring unexpected repair costs and/or loss in trade value – not what anyone needs when finances are being squeezed.
The mandatory disclosure requirement is a key pillar of protection offered to consumers who purchase from a dealer registered with OMVIC, Ontario’s motor vehicle sales regulator. OMVIC enforces the rules to help keep customers safe. In June 2021 for example, OMVIC denied a Toronto man named Sai Lu’s re-entry into the motor vehicle sales profession after he ran an illegal, unlicensed side business buying salvaged cars and falsely disclosing their history. Lu leased them to unsuspecting Uber and Lyft drivers and failed to disclose mandatory information to the buyers about the condition of the vehicles, such as $11,000 in previous accident damage, putting the drivers’ and passengers’ safety at risk.
Many other aspects of a car’s history must be disclosed aside from major accident damage. Two of the most common non-disclosures seen by OMVIC’s consumer support team are when the vehicle is registered in another province or is used as a daily rental. They must disclose the true distance a vehicle has travelled and cannot change odometer readings. Check out this full list of mandatory disclosures on the OMVIC website.
That’s not to say that a vehicle’s entire history must be disclosed however, including service and owner history. For greater peace of mind, OMVIC recommends obtaining a used vehicle information package (UVIP) and/or a Carfax history report (make sure the report VIN matches the vehicle VIN) as well as an independent mechanical inspection, which may reveal tell-tale signs of undisclosed issues.
And though most disclosures required under the MVDA will only apply to used cars, there are instances where new vehicles may require a disclosure to be made, such as damage incurred in transit or on the dealer lot.
Whatever the non-disclosure, it’s always harder to make things right once a deal is done because there is no cooling-off period for vehicle purchase contracts in Ontario. Under General Regulation 50 of the MVDA, only six particular disclosures will trigger an automatic cancellation of the contract. Be sure to dig into the vehicle’s history before you buy and get any relevant disclosures confirmed in writing on the bill of sale. Verbal disclosure – for example, a dealer tells you about a previous collision – does not meet the requirements of the MVDA.
If you think that a mandatory disclosure was not made when you bought your used vehicle, contact OMVIC to confirm whether the law has been broken and receive advice on how to proceed. If it’s one of the disclosures covered by Section 50 and the contract can be cancelled, contact the OMVIC consumer support team. Typically, the dealer will respond to a consumer who’s taken advice from OMVIC, and the matter is resolved without the need for further action. In cases where the dealer refuses to comply, you may be eligible for reimbursement from OMVIC’s compensation fund.
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 firstname.lastname@example.org or 1-800-943-6002 for advice and answers to all your car-buying questions.
OMVIC also offers free education and webinars for consumers upon request, email email@example.com for more information on our services and materials.
This story was created by Content Works, Postmedia’s commercial content division, on behalf of OMVIC.