Lawyers Financial

Non-disclosure puts auto dealers at risk

Car dealers need to be clear and truthful in all material they post about the vehicles they’re selling, including the price, says Toronto licensing and compliance lawyer Anar Dewshi.

“If you’re going to sell all-in, it means you can’t charge anything on top of that,” says Dewshi, principal of Dewshi Law Practice, who often represents car dealers. “With taxes, you can say, ‘This is the price plus tax,’ but it has to be clear.

“If you’re going to use all-in pricing, you can do that with a caveat,” she tells

All-in means the freight, registration fees and taxes — as well as the cost of the car — are included in the advertised price.

Dewshi points out that dealership responsibilities are onerous and subject to periodic reviews by the Ontario Motor Vehicle Industry Council (OMVIC), their regulatory body. The key to complying with the rules is to be clear and include relevant information and using specific terminology.

That includes listing the history of the vehicle. If it was previously used as a police vehicle, for emergency services, or for transportation such as a taxi or a limousine it must be disclosed.

Dewshi points out that the terms of purchase also need to be spelled out, including the cash price of the vehicle, and any financing terms, such as the interest rate and the cost of borrowing.

“If it’s being sold as-is, the posting should break down the various components, such as it has not undergone emissions testing, it’s not certified and is not presented as being in roadworthy condition or considered to be mechanically sound or is maintained at any guaranteed level of quality,” she says.

If the car requires substantial repairs to the point it may not be possible to register it to be in driving condition, that needs to be included as well, Dewshi says.

“They have to put that in every single time,” she says. “You can’t just say as-is.”

Failing to include all those details could result in the dealer having to absorb any repair costs that might result. If it’s determined there’s a breach, the dealer could be made to go through a disciplinary hearing. And it gets worse for repeat offenders who are taken before Ontario’s Licence Appeal Tribunal.

If the offence is serious and warrants a fraud charge, a discipline hearing could result in a fine and force a retraction or correction of the advertising material. And any future advertising the dealership wants to use might require vetting by OMVIC before it can be published.

Other negative repercussions could include a reporting to the Better Business Bureau and an investigation under the Consumer Protection Act, which is a regular occurrence in the industry, Dewshi says.

“People are buying vehicles and they often don’t know what they’re getting into,” she says.

But there are ways to avoid problems. One includes relying upon a standard format.

“Many dealers use a standard bill of sale document that they can get from the Used Car Dealers Association and has all the things that you’re supposed to tick off,” she says.

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