Unhappy with your latest Amazon delivery? Chances are, you can send it back for a refund. Changed your mind about something you bought in Walmart? Grab that receipt and take it back to the store. Or perhaps you’ve decided that a gym membership isn’t for you after all. Even in this case, the 10-day legal cooling-off period means you can rip up the contract.
The law in Ontario permits no such latitude if you change your mind about a new or used vehicle you purchase. Furthermore, the Motor Vehicle Dealers Act, 2002 (MVDA) is specifically exempt from the cooling-off periods in the Consumer Protection Act (CPA). Buyer’s remorse on a car or truck will at best entail argument and hassle; at worst, it could leave you stuck with a new ride and liable for payments you can’t afford.
Take care when purchasing a vehicle– in Ontario, there are no second chances. PHOTO BY GETTY IMAGES
If a consumer wants to cancel a contract without a legal right to do so, the dealer has five options. They could:
1) cancel the contract and refund the deposit to foster goodwill,
2) try to salvage the deal, for example with a more affordable vehicle,
3) offer to hold the deposit so the consumer can put it against another vehicle in the future,
4) seek compensation from the consumer for expenses arising from the cancellation (“liquidated damages”),
5) or pursue civil court action and sue the customer to enforce the contract.
According to Tim Hines, director of consumer support at OMVIC – Ontario’s vehicle sales regulator – very few car and truck buyers understand that there is no cooling-off period once they’ve signed the bill of sale. “We get many calls to our consumer support team from people who’ve changed their mind,” he says. “They don’t understand that once they sign the agreement, the negotiation’s over. There is a clause adjacent to where you sign that says sales are final and the dealer isn’t obliged to release you from the deal”.
“If you’re signing something, it is serious,” he continues. “This isn’t like the agreements that pop up when you install an app on your phone, to which you agree without really looking. Here, you are agreeing to numbers and figures and important details that have consequences.”
It’s up to the consumer to ensure the dealer puts everything in writing. PHOTO BY GETTY IMAGES
Hines advises that your homework should go beyond price-shopping vehicles on the internet. Be prepared for all aspects of vehicle ownership, such as what the vehicle will cost in fuel and, especially, insurance. Notably, for drivers under 25, affordable insurance can be hard to find, and this is a common reason why consumers contact OMVIC with buyer’s remorse. If you think finding a policy could be a challenge, make sure affordable insurance is included in the vehicle contract as a condition of the sale. Better still, try to get a quote before you sign any paperwork. Exploiting professional associations or other young-driver discount schemes might help to bring the price down.
More generally, any conditions you’ve discussed with the dealer, including particular interest rates on borrowings to fund the purchase and any verbal promises made, should be written into the contract. Failure to keep to the terms of the contract offers you a way out in the event of a problem, so by insisting that conditions are included, consumers can protect themselves from committing to something that ultimately proves unaffordable. Likewise, if a used vehicle has a fault when you inspect it, be sure to include its satisfactory repair as a condition of sale.
“It’s up to the consumer to make sure that the dealer puts it in writing so that they’re comfortable with what they’re signing,” says Hines. “He-said-she-said arguments are hard to prove further down the road.
“The great thing about writing everything into the agreement is that both parties are protected once they’ve signed. If anything changes, everybody’s in the same boat. If the consumer changes their mind, the dealer can pursue them civilly because the consumer is in breach of the agreement. But the same can be said of a dealer: if the dealer changes the agreement, it is null and void. As the consumer, you can either pursue the dealer civilly for not being able to give you what they contracted for, or renegotiate a new deal, but you’re not obligated to take a different deal. The consumer in that situation has good reason to request that their deposit be refunded.”
OMVIC reminds Ontarians: a used car purchase is final. PHOTO BY GETTY IMAGES
Signing any bill of sale puts your deposit at risk but subsequently signing a financing or lease contract will make it much harder to get out of an agreement and could leave you stuck with a car and liable for the payments. In this case, only a failure to meet specific conditions, or the omission of mandatory disclosures on the part of the dealer under the MVDA (more on those here), can potentially give the consumer the ability to request cancellation. It’s a situation best avoided by preparing thoroughly for the commitment ahead, leaving you free to enjoy your new vehicle instead of being mired in a stressful and costly contract dispute.
During this busy car-buying season, visit OMVIC.ca to access free car-buying resources to get you started and sign up for the quarterly newsletter, Consumer Line.
Contact OMVIC’s consumer support team at [email protected] or 1-800-943-6002 for expert advice and answers to all your car-buying questions or if you have a complaint against a dealer or salesperson.
To see if you are eligible to receive financial assistance from the Compensation Fund, contact OMVIC at 1-800-943-6002 or email [email protected].
Follow OMVIC on social media to stay up to date on the latest news.
IG: @omvic_official
Twitter: @omvic_consumers
Facebook: Ontario Motor Vehicle Industry Council (OMVIC)
Keyword: How to avoid buyer’s remorse: there’s no cooling-off period in Ontario when you sign on the dotted line