As-Is Sales Guideline

Title:As-is sales
Guideline Topic:Enforcement
Legislation:MVDA
Section/Subsection(s):Various
Date Created:2023-12-18
Date Revised:

Introduction and purpose

Vehicles sold as-is in Ontario are subject to certain conditions, both in terms of the sales contracts and any advertising associated with the vehicle in question. This guideline is intended to clarify those rules and help ensure that dealers and Registrants remain compliant with both the legal and regulatory requirements and OMVIC’s positions as the regulator with respect to enforcement.

Read the Guideline

OMVIC has published several other documents that discuss dealers’ responsibilities when it comes to as-is sales. Among these documents is OMVIC’s guideline on advertising, first published in the fall of 2022. The guideline covers mandatory disclosures and other requirements related to advertising. There are also several documents on OMVIC’s website that refer to various aspects of the practice. This current guideline is intended to consolidate that information, make it easily accessible, and ensure that it’s up to date.

Section 40 of the Regulation

The language in this section applies to sales contracts (bills of sale) for vehicles sold as-is. It is OMVIC’s position that the same language – especially regarding disclosure of a vehicle’s as-is status – should also be used in conjunction with dealers’ advertising.

Required and recommended language

Dealers are reminded, according to Section 4 (1) of the Code of Ethics, that they shall be clear and truthful in describing the features connected with the motor vehicle in which the Registrant trades. OMVIC’s position is that they shall include the following paragraph in any advertising of vehicles listed for sale as-is:

The motor vehicle sold under this contract is being sold “as-is” and is not represented as being in road worthy condition, mechanically sound or maintained at any guaranteed level of quality. The vehicle may not be fit for use as a means of transportation and may require substantial repairs at the purchaser’s expense. It may not be possible to register the vehicle to be driven in its current condition.

The Ministry of Transportation is responsible for enforcement of the Highway Traffic Act. Section 3-5.2 of Regulation 611 under the Act spells out the requirements for a safety standards certificate.

Code of Ethics

The Code of Ethics lays out how dealers can comply with their requirements for integrity; marketing and advertising; disclosures required in contracts of sale and lease; accountability; compliance; respect; and professionalism. It is the dealer’s responsibility to ensure that they comply with these and all other requirements.

Discipline committee

OMVIC’s Discipline and Appeals Committee has issued many decisions in the past that provide further direction on how registrants can ensure their compliance. If a dealer is found to have violated the Code of Ethics, the administrative actions can be serious, including fines amounting to tens of thousands of dollars, in addition to other measures. See the Appendix for the specific requirements and conditions outlined in Section 40 of the Regulation.

It’s not compliant for dealers to indicate that a vehicle is being sold as-is without providing the required disclosures in Section 4 of the Code of Ethics. Additionally, the discipline committee has found on several occasions that it’s a violation of the Act, the Regulation and/or the Code of Ethics when a dealer also fails to mention the cost of certification (also known as safety certification) in the advertising for one or more vehicles when the dealer fully intends to offer certification as an additional cost. Failure to disclose this information can result in disciplinary action.

OMVIC publishes and updates these guidelines regularly. You can find them the left-hand side of this page.

The Ontario Motor Vehicle Industry Council (OMVIC) administers and enforces the Motor Vehicle Dealers Act, 2002 (MVDA), its regulations and Code of Ethics, as well as relevant sections of the Consumer Protection Act (CPA), on behalf of Ontario’s Ministry of Public and Business Service Delivery.

OMVIC’s mandate is to maintain a fair and informed marketplace by protecting the rights of consumers, enhancing industry professionalism and ensuring fair, honest and open competition for registered motor vehicle dealers.

As businesses and markets evolve, industries continue to experience trends and changes that require regulators to adapt, in an effort to ensure regulatory expectations are clear and readily available. Consequently, registrants often seek guidance to ensure their businesses

Contracts for sales of used motor vehicles

  1. (1) Before entering into a contract to sell a used motor vehicle to a purchaser who is not a registered motor vehicle dealer, a registered motor vehicle dealer shall ensure that the person providing financing for the purchase has provided to the purchaser the information that must be disclosed in any initial disclosure statement required under Section 79 of the Consumer Protection Act, 2002with respect to the financing if,

(a)  the purchaser is a consumer within the meaning of that Act; and

(b)  the dealer is providing the financing or the application for the financing to the purchaser.

(2) A registered motor vehicle dealer shall ensure that any contract that the dealer enters into to sell a used motor vehicle to a purchaser who is not another registered motor vehicle dealer includes, in a clear, comprehensible and prominent manner, the following:

  1. The matters required under paragraphs 1 to 3, 5 to 10, 14 to 19 and 21 to 27 of subsection 39 (2).

1.1  If the contract is made through a motor vehicle dealer registered as a general dealer, the registered name and registration number of that dealer, together with the legal name of that dealer if it is different from the registered name.

  1. A statement that the dealer has complied with subsection (1), if that subsection applies to the dealer with respect to the contract.
  2. An itemized list of all repairs, if any, that, under the contract, the dealer has made to the vehicle or will make to the vehicle and the cost of any such repairs that are to be paid by the purchaser.
  3. If a current safety standards certificate under the Highway Traffic Acthas been issued for the vehicle, that certificate and a statement in accordance with subsection (5) in 12 point bold font, except for the heading which shall be in 14 point bold font.
  4. If the dealer is selling the vehicle on an as-is basis, a statement in accordance with subsection (6) in 12 point bold font, except for the heading which shall be in 14 point bold font, where the purchaser initials the statement.

(3) No registered motor vehicle dealer shall sell a used motor vehicle on an as-is basis to a purchaser who is not a registered motor vehicle dealer if a current safety standards certificate under the Highway Traffic Act has been issued for the vehicle.

(4) Despite paragraph 1 of subsection (2), the statement mentioned in paragraph 26 of subsection 39 (2) is required only if the model year of the motor vehicle is the current model year or one of the four preceding model years and the vehicle has been driven for less than 160,000 kilometres.  O. Reg. 333/08, s. 40 (4).

(5) The statement mentioned in paragraph 4 of subsection (2) is as follows:

Safety Standards Certificate

A safety standards certificate is only an indication that the motor vehicle met certain basic standards of vehicle safety on the date of inspection.

(6) The statement mentioned in paragraph 5 of subsection (2) is as follows:

Vehicle sold “as-is”

The motor vehicle sold under this contract is being sold “as-is” and is not represented as being in road worthy condition, mechanically sound or maintained at any guaranteed level of quality. The vehicle may not be fit for use as a means of transportation and may require substantial repairs at the purchaser’s expense. It may not be possible to register the vehicle to be driven in its current condition.

(7) The registered motor vehicle dealer shall ensure that there is a separate contract under subsection (2) for each motor vehicle that the dealer sells.  O. Reg. 333/08, s. 40 (7).

(8) The registered motor vehicle dealer shall ensure that each contract mentioned in subsection (2) into which the dealer enters includes, in a clear, comprehensible and prominent manner, all restrictions, limitations and conditions imposed on the purchaser under the contract.

(9) For each contract mentioned in subsection (2) into which the registered motor vehicle dealer enters, the dealer shall ensure that,

(a)  the contract is signed by the parties;

(b)  if a registered salesperson is acting on behalf of the dealer respecting the sale, the contract is signed by the salesperson; and

(c)  the purchaser receives a copy of the contract immediately after signing it. O. Reg. 333/08, s. 40 (9).

(10) If a contract under this section is made through a motor vehicle dealer registered as a general dealer, the general dealer shall not facilitate a contract that does not comply with this section.

Disclosure and marketing (Section 4 of the Code of Ethics)

(1) A registrant shall be clear and truthful in describing the features, benefits and prices connected with the motor vehicles in which the registrant trades and in explaining the products, services, programs and prices connected with those vehicles.

(2) A registrant shall ensure that all representations, including advertising, made by or on behalf of the registrant in connection with trading in motor vehicles, are legal, decent, ethical and truthful.

(3) Before entering into a contract with a customer who is not a registered motor vehicle dealer in respect of a trade in a motor vehicle, a registered motor vehicle dealer shall explain to the customer the terms of the contract between the customer and the dealer, including the financial and other obligations, if any, of the customer u

Contact

The Dealer Support team is available to assist dealers in achieving and maintaining compliance with the MVDA and Code of Ethics. Registrants who wish to contact Dealer Support can reach the team at the phone number below and leave a message.

Messages are returned in priority sequence.

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