New rules make dealers more accountable to public

Ron Loveys

TADA PRESIDENT

On Jan. 1, new regulations under the Motor Vehicle Dealer Act, 2002, which governs all motor vehicle dealerships in Ontario, will become law.

The Toronto Automobile Dealers Association (TADA) welcomes these changes, which are meant to ensure that dealerships operate with greater compliance and accountability and that consumers who buy vehicles from registered dealers are better protected.

The new act is meant to modernize the regulatory environment and business practices for motor vehicle dealers, salespeople and consumers.

TADA has a proud history of initiating compliance and regulations into the retail car industry. It helped form the Ontario Motor Vehicle Industry Council (OMVIC) in 1997, a self-managed body that administers the dealer act on behalf of the Ministry of Consumer Services.

OMVIC makes sure registered dealers throughout Ontario operate with honesty, integrity, financial responsibility and in accordance with the law. It has the legal power to oversee and enforce the activities of dealers and their employees.

One of the changes in the new MVDA concerns sales/leasing contract disclosures. In 1992, TADA also introduced the first full disclosure, plain language sales contract for the purchase of new vehicles in Canada.

The new contracts will include a provision whereby dealers will be obligated to reveal a vehicle's true condition and history, including flood or structural damage, or the cancellation of the manufacturer's warranty.

Customers will be permitted to cancel a contract within a specified period if certain items are not disclosed. These items include a failure to disclose odometer readings or whether a vehicle was branded "salvaged" or "re-built" under government legislation, failure to identify the make and model of a vehicle, and failure to disclose whether a vehicle was used as a police cruiser, emergency vehicle, limousine, taxi or daily rental.

With the new MVDA, all new vehicle sales and lease contracts must state that the Canadian Motor Vehicle Arbitration Plan (CAMVAP) is available to resolve disputes concerning alleged manufacturer defects or implementation of the manufacturer's warranty.

CAMVAP is a not-for-profit corporation that acts as a neutral third party in settling disputes between consumers and new-car manufacturers.

The new contracts must also stipulate if a certain manufacturer is not a participant in the CAMVAP program, and that the dispute resolution process is not available for customers who buy or lease vehicles from that manufacturer.

The new MVDA will provide added scrutiny for people who work at registered dealerships. For instance, anyone who wishes to become a dealer principal must undergo a formal vetting process to ensure that certain financial and ethical considerations are met.

A similar vetting process will be applied to salespeople. Currently, all salespeople who work at new-car dealerships must be registered with OMVIC and full background checks are made to ensure candidates don't have criminal records.

Under the new MVDA, consumers will be eligible for an increased range of financial claims satisfied by the Motor Vehicle Compensation Fund. Claim coverage will increase from $15,000 to $45,000, and fines for convictions will be increased from $25,000 to $50,000.

Advertising is another area where the new MVDA has made changes. The existing guidelines forbid dealers from making false claims, empty promises or deceptive representations and they're quite clear when it comes to what's acceptable and what's not.

The new guidelines ensure that dealers will be even more compliant. It specifies that dealers must adopt an "all in-inclusive pricing" for new and pre-owned vehicles.

Like contracts, if vehicles were used as police cruisers, taxi or emergency vehicle, this must be disclosed in any advertising.

For more information about the new MVDA, visit www.omvic.ca or www.e-laws.gov.on.ca.

This column represents the views of

TADA. Email president@tada.ca or

visit tada.ca

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