On April 1, 2009 two new regulations to the Ontario Motor Vehicle Dealers Act, 2002 will come into force: the General regulation and the Code of Ethics regulation. The new regulations will revise the rules governing motor vehicle dealers and aim to strengthen consumer protection in the motor vehicle industry. As the regulations will be in force within a few months, industry stakeholders will want to be informed of and prepared for the following major changes to the regulatory regime:

Advertising Prices

The general regulation requires that dealers use an “all-inclusive” price when advertising the price of a motor vehicle. Only sales tax may be rightfully omitted from an advertised sales price.

Classes of Registrants

The regulation sets out several classes and subclasses of motor vehicle dealers, all of which will be governed by the new regulations. Effectively, the concept of the “motor vehicle dealer” will encompass a wide range of parties involved in the buying, leasing or brokering of the sale of a vehicle to a consumer.

Disclosure Requirements

One of the main objectives of the new regulations is to increase consumer confidence and protection by providing consumers sufficient information to make an informed decision about the purchase or lease of a motor vehicle. Under the new regulations, motor vehicle dealers will be subject to extensive disclosure requirements concerning the vehicle’s history and condition.

Consumer Remedies for Non-Disclosure

Stronger remedies are available to consumers under the new regulations. Buyers and lessees may cancel a contract to lease or purchase within 90 days if a dealer fails to comply with certain disclosure requirements.

Code of Ethics

Motor vehicle dealers will be held to a high professional standard through the introduction of a new Code of Ethics. The regulation prescribes heightened disclosure obligations for both dealer-to-dealer and dealer-to-consumer transactions. The regulation also includes a discipline and appeals procedure, featuring the creation of a discipline committee and appeals committee.