The Ontario Ministry of Public and Business Service Delivery is consulting on potential changes to the Motor Vehicle Dealers Act that could dramatically change the process of buying and selling cars in the province.
There are 14 proposals that individually and collectively are designed to improve the Ontario Motor Vehicle Industry Council regulatory efficiency and enhance consumer protection. OMVIC CEO/Registrar Maureen Harquail told Canadian auto dealer the Motor Vehicle Dealers Act legislation is more than 20 years old and needs to be updated. Some of the proposals have been harvested from recommendations by the Motor Vehicle Retailers of Ontario and an auditor general’s report.
“I’m very mindful of our consumer protection mandate that we have at OMVIC,” said Harquail. “When I look at some of these proposals there has been a thoughtfulness put in that is, to some extent, from that consumer lens, because that is what we are here (to do) at OMVIC. We are the ones that have to administer and enforce the legislation. I think for the majority of the industry many of these provisions can be seen in a positive light.”
Some of the proposals include: requiring a two-day cooling-off period on all transactions before the consumer takes possession of the motor vehicle; allowing trade outside a dealer’s place of business when the consumer has initiated contact for the transaction to be done that way; and limiting the ability of dealers to require consumers to purchase add-on goods and services in a vehicle sale.
Others include limiting the sale of “as-is” vehicles, and requiring motor vehicle dealers to promptly pay unpaid loans on a trade-in vehicle within five business days — where the dealer has agreed to pay the outstanding amount.
Harquail said the cooling-off period is a product of the new way consumers are buying cars, notably on-line.
“We certainly have seen over the last few years changes to the business models that are being used in the industry,” said Harquail. “We think of the bricks and mortar types of stores where you go in and look at the car and purchase it. But there are some business models where you can literally buy a car from your computer and never see it until it lands in your driveway.”
She added that some dealerships have already adopted a guarantee return policy for that type of purchase, but it would now apply to all dealerships if the change is legislated.
The Motor Vehicle Retailers of Ontario (MVRO) is currently reviewing the proposed changes and it has concerns about the cooling-off period, said its Director of Government Relations Frank Notte.
“If enacted, an unnecessary cooling-off period will create red tape and make it harder to do business for salespeople and others involved in a vehicle sale,” Notte said.
“Over the years, the MVRO has been advocating to allow new car retailers the ability to transact offsite from a dealer’s place of business, and to increase the amount of time to submit warranty documentation from seven days to 30 days. We are pleased these red tape reducing measures are being considered. The MVRO will be making a formal submission to the Ministry of Public and Business Service Delivery on all proposed changes.”
Harquail said she is particularly excited about the proposal requiring OMVIC to develop an information guide for dealers that would be a resource for buyers before signing any purchase agreements.
“To me that’s helping consumers understand that OMVIC exists and there’s someone there to give them advice,” said Harquail.
She says she is also keen about the importance of the proposed legislation that would require dealerships to complete mandatory continuing education courses as a condition of registration renewal. She said the automotive industry, unlike most regulated sectors, does not have a continuing professional development program.
“Making sure that everybody is doing some continuing education every year can only be good for consumers, but it’s also good for the industry,” said Harquail. “There’s always room for improvement and we should all be challenging ourselves to give the best service possible (…). The people of Ontario are demanding more of who they deal with. Everybody should be upping their game and this is one of those tools we can all use.”
She said some of the proposed changes will expand the scope and powers of OMVIC’s Discipline Committee, such as increasing maximum fines on dealerships and salespeople, similar to recent changes put forward for realtors.
“That has become best practice and we’re anxious to embrace those,” said Harquail. “When we look at our fine amounts, some of those are ones from almost 30 years ago. So making sure those fines are reflective of today’s conduct, I think, is very important.”
She said the overall changes are good for consumers and dealers.
“We hear from dealers and salespeople, and the majority of them in our industry want to do the right thing — they want to follow the law, follow our code of ethics, and ( which they) want to have a good relationship and an ongoing relationship with their customers,” said Harquail. “They are also very frustrated by those in our industry that will not act in compliance with the legislation.”
The deadline for feedback is May 21.
