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Understanding OMVIC’s Motor Vehicle Dealers Compensation Fund

December 5, 2023
Buying

The Ontario Motor Vehicle Industry Council (OMVIC) plays a crucial role in regulating the automotive sales industry in Ontario, Canada. One of the key components of OMVIC’s consumer protection measures is the Motor Vehicle Dealers Compensation Fund. This fund serves as a safety net for car buyers who encounter issues with their vehicle purchases, ensuring they are not left financially stranded. 

Where do the funds come from? 

OMVIC’s Motor Vehicle Dealers Compensation Fund is primarily supported by contributions from registered motor vehicle dealers in Ontario. These dealers are required to pay into the fund as part of their new dealer licensing fees. The money collected is used to compensate car buyers who have suffered financial losses due to the actions of licensed motor vehicle dealers. This fund serves as a financial safety net for car buyers, providing them with recourse in cases of dealer misconduct or fraudulent activities. 

What happens if a lien is not paid out?  

A significant focus of the compensation fund is addressing situations where car buyers face the dire consequence of a lien non-payout. An unresolved lien can wreak havoc on a buyer’s finances and legal standing. OMVIC can help in the case of a purchased vehicle, obtained through a trade-in, that carries an outstanding lien as part of the same transaction. The compensation fund steps in to alleviate the financial strain, covering eligible losses incurred because of the dealer’s failure to clear the outstanding lien.  

Who is eligible for compensation? 

For car buyers to tap into the benefits of the compensation fund, they must meet certain criteria: 

  1. Dealer registration: The dealer in question must have been registered with OMVIC at the time of the transaction. 
  2. Lien non-payment: The car buyer must have experienced a non-payout situation due to an unresolved lien on the vehicle that they traded in. To make a claim with the fund, the dealer must have had its registration revoked, gone bankrupt or have a judgement against the dealership. 
  3. Report filing: The car buyers must apply for compensation within the specified timeframe. 

A full list of eligibility criteria can be found on OMVIC.ca, under consumers and compensation fund.   

When consumers should contact OMVIC’s Motor Vehicle Dealers Compensation Fund: 

  1. Unresolved lien issues: If you’ve recently purchased a vehicle and discover an unresolved lien, contact OMVIC’s consumer support team immediately. They can provide guidance on the necessary steps to take. 
  2. Dealer bankruptcy: In the unfortunate event that the dealer files for bankruptcy, leaving car buyers with unresolved issues, the compensation fund can step in to provide assistance. 
  3. Misrepresentation of vehicle history: In certain cases, if you discover that the vehicle’s history was misrepresented at the time of purchase, leading to financial loss, the compensation fund can help cover eligible expenses. 

OMVIC’s Motor Vehicle Dealers Compensation Fund serves as a critical lifeline for car buyers navigating the complexities of vehicle purchases. By understanding its purpose, eligibility criteria, and the circumstances under which to seek assistance, consumers can approach their transactions with confidence, knowing that support is readily available.  

To see if you are eligible to receive financial assistance from the compensation fund, contact OMVIC at 1-800-943-6002 or email [email protected]. 

OMVIC has been delegated responsibility for administering and enforcing the Motor Vehicle Dealers Act (MVDA). Visit our new website – an OMVIC resource for all your car-buying needs. Our enhanced website is designed to give you with the information you need fast to make informed decisions and protect your rights as a car-buyer.   

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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