The hunt for a new or used vehicle can be frustrating, let alone costly. This is doubly true in a time of inventory shortages and price hikes. Fortunately for Ontarians, there may be access to compensation for consumers in-need as a result of their car-buying experience.
Created in 1986, the Motor Vehicle Dealers Compensation Fund (Compensation Fund), is a consumer protection program that provides financial assistance for car buyers who experience unexpected issues during a motor vehicle transaction, conducted with an OMVIC-registered dealer.
“The Compensation Fund is important in today’s car-buying environment,” explains John Carmichael, Chief Executive Officer & Registrar of the Ontario Motor Vehicle Industry Council (OMVIC), adding, “as the oldest and largest fund of its kind in Canada, the Compensation Fund offers the best protection for vehicle buyers in Ontario.”
Qualifying for relief
Financed by all OMVIC-registered dealers in the general, lease-finance, and broker registration classes, the Compensation Fund provides up to $45,000 per vehicle transaction to eligible consumers. And, in nearly 40 years of operation, the Compensation Fund has awarded over $6 million to eligible consumers.
To qualify, a consumer must submit a claim within two years of meeting one or more of the program criteria. Specifically, the criteria include situations where the OMVIC-registered dealer has:
- Failed to satisfy a court judgment that has become final;
- Failed to return a deposit to a consumer on an undelivered vehicle;
- Become bankrupt;
- Been convicted in relation to the trade of a motor vehicle;
- Failed to remit payment on an extended warranty;
- Failed to remit or honor a service plan;
- Seriously misrepresented the vehicle, and the claimant would be eligible for cancellation under section 50 of the Motor Vehicle Dealers Act;
- Had their license revoked by the Registrar; or
- Sold a motor vehicle to a consumer that has been seized by law enforcement or lawfully by a creditor
Consumers who feel their transaction meets one or more of the criteria above can submit a Compensation Fund application along with supporting documentation to OMVIC. Once received, OMVIC staff review the application for completeness before sending the application and supporting evidence to the Compensation Fund’s Board of Trustees, that meets regularly during the year to consider claims and inform consumers of their decision in a timely manner.
The Board of Trustees plays a critical role in the program. Carmichael notes, “this a group with a diverse range of knowledge and backgrounds, including legal experts, consumer advocates, financial sector backgrounds, public sector representatives, and a variety of industry members with different types of industry experience. What’s more, OMVIC staff support the Board of Trustees by ensuring they work with claimants to retrieve all the relevant documentation that the Board of Trustees requires to make an informed decision on a claim.”
Reaching a resolution
Applying for compensation is relatively straightforward. Moreover, consumers should contact OMVIC’s consumer support team for advice and assistance with their claims before making a submission.
Carmichael also notes that there is always the possibility that these measures don’t need to be taken, adding, “in many cases, consumer complaints can be resolved without the need for a claim being submitted. If the issue remains unresolved, then they may have options for compensation.”
To learn more, visit OMVIC.ca for access to convenient and free car-buying resources to help get you started. Car buyers are also welcome to contact OMVIC’s consumer support team at consumers@omvic.on.ca or 1-800-943-6002 for expert advice and answers to all their car-buying questions.
