The Cooling-Off Period — A Common Misconception
You’re out car shopping and…you find it…the perfect car! Oh, it was meant to be…so you sign the contract. When you get home that evening you realize that two-seater might be hard to squeeze your wife, kids, a German Shepherd and mother-in-law into — no problem; you’ll just tell the dealer you’re cancelling the contract and want your deposit back.
Hey if you can cancel a gym or fitness contract or cancel the purchase of a newly built condo within 10 days, surely you can cancel your contract for buying a motor vehicle in Ontario. To borrow from the late great Leslie Nielsen in Airplane, no you can’t “and stop calling me Shirley.”
In Ontario, there is no cooling-off period when buying a vehicle from a dealership
A COMMON MISCONCEPTION
“Unfortunately, it’s a common miscon-ception. If a consumer signs a contract with a motor vehicle dealer, it’s a legal binding agreement” explained Terry O’Keefe, Director of Communications for OMVIC, Ontario’s vehicle sales regulator. “Unless there are conditions written into the contract allowing for cancellation, there’s no cooling-off period — period.”
So what can a consumer do if they sign a purchase agreement for a vehicle and then want to back out? “Be honest with the dealer,” suggests O’Keefe. “We find many dealers will cancel a contract and return a deposit as a gesture of goodwill.” But not all dealers may be so inclined, nor do they have to be. It’s perfectly acceptable for dealers to seek liquidated damages from the consumer. These are the costs the dealer will incur for letting the consumer out of the contract; they might include additional advertising or financial carrying costs. According to O’Keefe, “Liquidated damages must be reasonable and provable. If a consumer thinks the damages a dealer is seeking are unreasonable, they should contact OMVIC’s Complaints and Inquiries Team for assistance.”
So while buying from an OMVIC-Registered Dealer is surely the safest way for consumers to purchase a vehicle (remember, buying privately comes with NO consumer protection) it’s still vital consumers educate themselves and learn to ask the right questions. To assist, OMVIC offers these tips:
1. Ensure salesperson understands your needs
2. Take a thorough test drive — not just around block
3. Understand “all-in” price advertising — dealers cannot charge more than advertised price with the exception of HST & licensing — should they try, shop elsewhere, and report them to OMVIC
4. For used vehicles, ask for, or purchase a history report — consider an inspection by a trusted mechanic, particularly if vehicle is out of warranty
5. Get all conditions in writing (e.g. “subject to spouse’s approval” or “xxx to be repaired”)
6. Get all disclosures in writing (e.g. “no accidents”)
7. Carefully read contract (and loan agreement) before signing — remember once signed, sales are FINAL
For more information about your car buying rights visit omvic.ca. To contact OMVIC’s Complaints and Inquiries Team call 1-800-943-6002×3942 or email email@example.com.