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Auto dealers should be aware of MVDA advertising rules

A recent media campaign promoting all-in price advertising is just one of the key protections consumers receive when buying a car from an Ontario Motor Vehicle Industry Council (OMVIC) registered dealer, says Toronto licensing and compliance lawyer Anar Dewshi.

A Toronto Star column, written by Trillium Automobile Dealers Association President Doug Sullivan, outlines what OMVIC is — a self-managed body that administers Ontario’s Motor Vehicle Dealers Act (MVDA) — and explains the “all-in pricing message is part of an ongoing initiative by OMVIC to provide more public awareness about the laws and guidelines that govern registered motor vehicle dealers across Ontario.”

The article notes that since its inception in 1997, OMVIC has regulated and monitored the activities of registered motor vehicle dealers and protected the rights of consumers.

The council is made up of a board of directors appointed by the consumer minister and OMVIC is responsible for all registered dealerships and sales staff, dealer inspections and investigations, complaint handling and maintaining professional standards, the column states.

“Anyone who operates a dealership or sells vehicles at a dealership in Ontario must submit to a screening process and meet the requirements outlined in the MVDA,” it continues.

Dewshi, principal of Dewshi Law Practice, says that when it comes to the all-in price requirement under the MVDA, the dealer’s advertisement must list a price for a vehicle that includes all charges related to the sale, such as freight and inspection charges, administration fees, other fees/charges, and levies. Taxes don’t have to be included in the advertised price if the ad clearly and prominently states that taxes are not included in the price.

Aside from the all-in price advertising requirement, registered dealers are required to disclose prior use of the car, Dewshi says.

“If the vehicle was in an accident — particularly when there was more than $3,000 worth of repairs done — that has to be disclosed,” she tells AdvocateDaily.com. “Registered dealers also have to disclose if the car was used as a rental car, police car, taxi, etc.”

When it comes to selling unfit or “as is” vehicles, Dewshi notes the MVDA sets out advertising requirements as well. For example, if an ad includes a price for a vehicle being sold “as is,” the ad must clearly and prominently include the following statement:

“This vehicle is being sold ‘as is,’ unfit, not e-tested 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.”

Dewshi notes it is not sufficient to simply state the vehicle is being sold “as is.”

If a registered dealer is not following the requirements and code of conduct as set out in the MVDA, Dewshi says there can be be a range of disciplinary actions taken.

“If it’s a one-time violation, the dealer could have a fine imposed on them by the Disciplinary Committee” she says.  

For numerous violations, she adds that the dealer may also be required to submit all advertising to the registrar for pre-approval for a period of up to two years.

“Depending on the severity of the violation, the matter could go before the Licensing Appeal Tribunal where their registration could be revoked," she says.

Dewshi notes their registration could be revoked and the dealer may also be required to submit all advertising to the registrar for pre-approval for a period of up to two years.

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