|Financial responsibilities and obligations
This document is a companion piece to a guideline on non-financial responsibilities and obligations. Both guidelines provide information to support dealers and ensure they can carry out their business effectively and provide good service to their customers in a variety of areas related to their financial responsibilities and obligations. It consolidates existing information in one package to make it more accessible and easier to understand.
In all cases, dealers should remember that they are bound by the requirements of the legislation and regulations of the Motor Vehicle Dealers’ Act (MVDA), as well as the other statutes listed below. Especially important in this context is the Code of Ethics, which governs dealers’ overarching responsibility to operate with integrity, professionalism, accountability, etc., in all of their transactions with customers.
This guideline will provide information about several different provincial laws and their associated regulations as they pertain to financial transactions in the automotive sales sector. While the information in this guideline is grounded in the relevant legislation, if you have specific questions about your company’s approach to the matters outlined, it’s always best to seek independent advice from competent legal counsel.
The legislation regarding dealers’ non-financial responsibilities and obligations falls primarily under two provincial statutes – the Motor Vehicle Dealers Act, 2002 (MVDA) and the Consumer Protection Act, 2002 (CPA). There is also some interaction with the Sale of Goods Act. The MVDA’s Code of Ethics, in particular, articulates the expectations of dealers with respect to integrity, accountability, compliance, respect and professionalism, among others. What’s listed below is an overview of some of the more relevant sections of the legislation. Other parts also apply.
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 comply with relevant legislation and consumer protection measures.
The list of available guidelines can be found here.
Excerpts from the Code of Ethics (Regulation 332/08)
Excerpt from the Sale of Goods Act
Q1: What’s the purpose of these guidelines?
A1: These guidelines, developed in consultation with industry representatives, outline dealers’ financial and non-financial responsibilities and obligations. In doing so, they are intended to provide information to support dealers to and ensure they can carry out their business effectively and provide good service to their customers. They were developed in consultation with industry representatives, and are designed to clarify the legislative and regulatory requirements/ They also outlline OMVIC’s expectations with respect to financial transactions in the automotive sales sector and are also intended to support OMVIC’s role as a modern regulator.
Q2: What do dealers need to know about their obligations and responsibilities?
A2: Dealers should remember that they are bound by the requirements of the legislation and regulations of the Motor Vehicle Dealers’ Act (MVDA), as well as the other statutes listed in the guidelines. Especially important in this context is the Code of Ethics, which governs dealers’ overarching responsibility to operate with integrity, professionalism, accountability, etc., in all of their transactions with customers.
Q3: What’s included in the guidelines?
A3: The guidelines cover:
Q4: What is negative equity?
A4: Negative equity usually occurs when a customer’s trade-in is worth less than the amount still outstanding on the loan. Dealers may choose to include negative equity in a sales transaction. If they do so, it must be done in a manner that is clear and transparent.
Q5: What are dealers’ responsibilities and obligations when it comes to liens?
A5: Dealers are required to pay out any outstanding loan on the vehicle or any outstanding bill for the repair or storage of the vehicle. They must also ensure that any goods sold are free of encumbrances.
Q6: Where can I find all of the guidelines that OMVIC has published?
A6: The list of available guidelines can be found here. Once the page opens, you’ll see the guidelines listed.
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.