Ontario Motor Vehicle Industry Council

Ontario Motor Vehicle Industry Council

August 21, 2009 16:56 ET

Ontario Motor Vehicle Industry Council: Ontario Dealers Cannot Advertise "Cash for Clunkers"

TORONTO, ONTARIO--(Marketwire - Aug. 21, 2009) - The Ontario Motor Vehicle Industry Council (OMVIC) advises consumers to be cautious of dealer advertisements that may offer "Cash for Clunkers". In Ontario, dealer advertising that leads consumers to believe they will receive a rebate is considered a misleading and deceptive practice.

Cash for Clunkers (officially named the Car Allowance Rebate System) is a U.S.-based federal program that offers consumers a rebate towards a new purchase when retiring older model vehicles in the United States only. Although Canada does have a vehicle recycling program (Retire Your Ride, www.retireyourride.ca) it does not fall under the U.S. program and Ontario does not have its own "Cash for Clunkers" rebate system.

All motor vehicle dealers and salespeople in Ontario must be registered with OMVIC and carry on business in accordance with the law and with honesty and integrity. Registrants must adhere to consumer protection legislation, namely the Motor Vehicle Dealers Act and Consumer Protection Act, and are also expected to observe OMVIC's Standards of Business Practice, which include strict advertising and marketing guidelines.

"OMVIC's marketing standards govern advertisements for both new and used vehicles in Ontario and level the playing field for consumers and dealers," explains OMVIC spokesperson Brenda McIntyre. "The purpose of the standards is to ensure advertisements are free of false statements, empty promises and deceptive representations of products or services. Among other things, advertising a "Cash for Clunkers" program violates Section 3.12.1 of the Standards which states advertisements do not offer a minimum trade in allowance."

To assist consumers with their vehicle purchases, OMVIC offers additional advice for reviewing ads:

Additional Fees

Review ads carefully, especially when comparing deals. The vehicle price listed in an advertisement is probably not the entire cost of the vehicle. Factor in administration costs when looking at vehicle ads. "Administration" fees, also known as "documentation fees," can be catch-alls for a variety of the dealer's paperwork costs, and can range up to several hundred dollars.

Steer Clear of Prohibited Words

Terms such as "going out of business," "closing," "bankrupt," "fleet sale," "factory price," "invoice prices," "supply limited" or "limited time only" imply a vehicle is being sold outside of regular business practices. Dealers can't use these terms without a full explanation of the situation. Also, dealers whose names include the word "wholesale" are, in reality, retail dealers selling at retail prices.

Verify All Fleet Vehicle Disclosures

Late model vehicles offered at an attractive price may be former rentals. Dealers are required to disclose former daily rentals, taxis and police vehicles in writing, and must also disclose a vehicle's accident history.

Classified Advertisements

Some people prefer to buy privately, but be aware that studies have shown more than 25% of classified ads may be posted by curbsiders (unregistered dealers posing as private sellers who sell misrepresented vehicles to unsuspecting consumers). When you buy privately, you're on your own with very little recourse if you discover the car has been misrepresented to you.

About OMVIC

OMVIC licences and regulates motor vehicle dealers in Ontario and administers the Motor Vehicle Dealers Act on behalf of the Minister of Consumer Services. OMVIC's mandate is to maintain a fair, safe and informed marketplace by ensuring registration of dealers and salespeople, inspecting dealerships, maintaining a complaint line for consumers, conducting investigations and enforcing the act and its associated rules and regulations. OMVIC is also responsible for administering the Motor Vehicle Dealers Compensation Fund on behalf of a Board of Trustees.

OMVIC Standards of Business Practice available at:

http://www.omvic.on.ca/services/shared/industry_regulation/standards_business_practice.htm

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