Licensing

Buyer beware: consumer tips for purchasing new, used cars

By Paul Russell, AdvocateDaily.com Contributor

Before stepping into a new or used car showroom, consumers need to brush up on the rules and regulations that govern vehicle sales, says Toronto licensing and compliance lawyer Anar Dewshi.

“Complaints about dealerships are quite common,” says Dewshi, principal of Dewshi Law Practice. “However, people can be confident about their purchase if they keep these five tips in mind.”

There is no cooling-off period

Dewshi says consumers call her in distress, complaining that a dealership is refusing to let them out of their car purchase agreement.

“Many consumers think there’s a remorse period, allowing you to back out of the contract if you realize you made a mistake,” Dewshi tells AdvocateDaily.com. “That’s not true. Once you sign the purchasing agreement, the contract is binding.”

If the consumer was not given proper disclosure or was misled about the price, there may be some recourse, she says, adding, “but even then, you would be hard-pressed to get out of the contract. The rule of thumb is, once you sign, that’s it.”

Disclosure is important

Dewshi says General Regulation 50 of Ontario’s Motor Vehicle Dealers Act outlines all the disclosure responsibilities that auto dealerships have to abide by, with buyers granted a 90-day period to back out of the contract if these disclosures were not made.

Two key ones are that buyers have to be told if the vehicle was used as taxi, limo, for emergency service purposes or as a rental, and if more than $3,000 in repairs have been done to the body or mechanical features, she says.

“If the dealership gets a quote for repairs amounting to $10,000, but it only pays $3,000, it still needs to provide that disclosure about the $10,000 to the buyer, Dewshi says.

Understand pricing

“When a dealership advertises a vehicle at a certain price, all charges must be included,” she says. “If you are quoted one price, and then additional costs appear when the paperwork is drawn up, that is a contravention of the law.”

The only exceptions are HST and licensing fees, Dewshi explains.

When dealing with long leases or purchase contracts, she urges consumers to pay particular attention to how much the vehicle will cost by the end of the term.

“Some people don’t really look at those numbers as closely as they should, so they don’t understand the ramifications of breaking a lease, or what their buyback options are,” Dewshi says.

A recent CTV News article suggests consumers keep a watchful eye on the bottom line.

“Often salespeople will get you to focus on the payment rather than the actual price of the vehicle,” the article states. “Focus on a price you can afford and a loan payment that won’t drag on for years and keep you in a vehicle that loses value while the amount of your loan remains high.”

If you give a deposit, then decide you don’t want the car, “the chances of getting the deposit back are very slim unless there are extenuating circumstances,” Dewshi says.

Get it certified

Unless you are mechanically inclined, don’t buy an “as is” vehicle, since it has not been certified to be mechanically sound, she says.

“If there are problems down the road you will not have recourse against the dealership,” Dewshi says.

Before buying a used vehicle, she recommends people ask the dealer for a CARFAX report, which will detail its repair history , and reveal if there are any liens against it.

“Some dealerships have been selling vehicles with liens on them, and not discharging them before selling them to the consumer,” Dewshi says.

Contact OMVIC

Ontario dealerships are regulated by the Ontario Motor Vehicle Industry Council (OMVIC), and consumers are encouraged to visit its website before buying a car, she says.

“OMVIC provides information to consumers detailing what they need to know when they’re buying a vehicle, either from a dealership or privately,” Dewshi says.

The council can help handle disputes between consumers and auto dealerships, but it does not get involved with private sales, or matters outside its jurisdiction, such as forcing a dealer to cancel a contract, she says.

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