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 later that day, you realize that adorable sub-compact that just screamed “you” might not scream “them”… and by them we mean your husband, the triplets and your Great Dane named Tiny. No problem; you’ll just explain to the dealer that you’ve had a change of heart — after all, it’s just a few hours later — and that you’re cancelling the contract and want your deposit credited back on your VISA card.
Hey, if you can cancel a gym contract or cancel the purchase of a newly built condo within ten days, and cancel a contract for a water heater within 20 days, surely you can cancel your contract for buying a motor vehicle in Ontario, Right?
Wrong. There is no cooling-off period when you buy a vehicle in Ontario.
A COMMON MISCONCEPTION
“Unfortunately, it’s a common misconception. But if a consumer signs a contract to purchase a vehicle, it’s a legal, binding agreement,” explains Terry O’Keefe, Director of Communications and Education for OMVIC, Ontario’s vehicle sales regulator. “Unless there are conditions written into the contract allowing for cancellation, or the dealer has failed to make certain specified disclosures, 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 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 compensation for liquidated damages from the consumer. These are 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 verifiable. If a consumer thinks the damages a dealer is seeking are unreasonable, they should contact OMVIC’s Complaints and Inquiries Team for assistance at 1-800-943-6002 x3942.
DON’T SIGN UNTIL YOU’RE SURE
Before you sign on the dotted line, make sure you have read and understood the bill of sale. Don’t be afraid to ask questions and don’t be afraid to ask the dealer to add conditions on the contract. Common conditions include:
• subject to partner’s/parent’s/spouse’s approval
• subject to xxx being repaired
• subject to your mechanic’s inspection
• subject to financing
• subject to obtaining affordable/acceptable insurance
SO WHEN CAN A VEHICLE PURCHASE CONTRACT BE CANCELLED?
Consumers CAN cancel a vehicle purchase contract if a condition written on the bill of sale is not met or if the dealer fails to make certain disclosures related to the vehicle’s past-use, history and condition. So if your contract fails to disclose, accurately, in writing:
- the true distance the vehicle has travelled (i.e. odometer reading) Note: there is a small margin of error allowed;
- the make, model and model year of the vehicle;
- if the vehicle has been “branded” salvage, rebuilt or irreparable by the Ministry of Transportation;
- the previous use of the vehicle as a taxi or limo;
- the previous use of the vehicle as a police oremergency services vehicle; or,
- the previous use of the vehicle as a daily rental and the vehicle has not been subsequently owned by someone other than the dealer….Then you have 90 days from the date of delivery to rescind the contract, return the vehicle (in good condition of course) and get your money back. “This doesn’t happen often,” explained O’Keefe. “But when it does, it’s usually related to inaccurate or missing disclosure related to mileage or the previous use as a daily rental.” Consumers may also have up to one year to cancel the contract if the dealer breached the Consumer Protection Act by making a false, misleading, deceptive or unconscionable representation.
So buying a car is not like buying a gym membership, condo or water heater. You can’t simply change your mind and back out of the deal. And believe it or not, according to research conducted by the regulator, only 15 per cent of consumers understand this — the rest are misinformed (they think there is a cooling-off period) or they are uninformed (they’re not sure if there’s a cooling-off period). So get informed, understand your rights — and don’t sign a vehicle purchase contract unless you are certain you want to complete the sale… and that Tiny will feel comfortable… cuz unhappy Great Danes make everyone unhappy.