Is there a cooling-off period for car purchases?
So, you’re out car shopping and … you find it … the perfect car! The exhaust’s sultry rumble is intoxicating; the sculpted steel and curved glass tempts you further. Oh, it was meant to be…so you sign.
Yes, car buying can be an emotionally charged endeavour.
But what happens when you get home that evening and realize that two-seater might be hard to squeeze your wife, kids, two Rhodesian Ridgebacks and mother-in-law into; or your husband really might not care for that purple metallic paint job? No problem; you’ll just tell the dealer you’re cancelling the contract and want your deposit back … because of course in Ontario there’s a cooling-off period for car purchases right?
“Unfortunately, it’s a common misconception. If a consumer signs a contract, it’s a legally 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”.
OMVIC recently commissioned a survey on this matter; the results even surprised the regulator. Of 800 Ontarians questioned, only 13 per cent knew there was no cooling-off period when buying a car; 44 per cent weren’t sure; the remaining 43 per cent believed there was.
So what can a consumer do if they sign a purchase agreement 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 good-will.” 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 Team for assistance”.
So while buying from an OMVIC-Registered Dealer is unquestionably the safest way for most consumers to purchase a vehicle (buying privately comes with NO consumer protection) it’s still vital consumers educate themselves and learn to ask the right questions.