TORONTO, April 16, 2012 (GLOBE NEWSWIRE) -- On Saturday, April 14th CTV's W-Five broadcast "Used and Abused", a segment reporting the findings of the Automobile Protection Association's annual study of dealer and curbsider practices. This year's report focused entirely on 20 vehicle sellers in the GTA: 13 registered dealers, six curbsiders (illegal sellers) and one legitimate private seller.
The Ontario Motor Vehicle Industry Council (OMVIC) welcomes the APA's annual study. The 2012 report highlighted improvements by dealers while demonstrating areas that may still need improvement (advertising and disclosure); it also shone a bright light on the dangers posed by curbsiders, and the potential pitfalls of buying from a 'legitimate' private seller.
Improvements
The APA study found dealers were more aware of implied warranties and no dealer attempted to sell a rebuilt branded vehicle. As well dealers were more likely to disclose material information about a vehicle's history including collision damage.
Dealer Advertising Remains a Concern
Five of the 13 dealers in the APA study allegedly used advertisements that violated the Motor Vehicle Dealers Act (MVDA) requirement for advertised prices to be "all-in". By law, Ontario dealers must include all costs related to a vehicle purchase in their advertised prices. This would include charges for freight, safety inspections, administration fees, documentation fees, taxes/ levies and pre-delivery expenses/fees. HST and licensing do not have to be included in an advertised price so long as the ad clearly and prominently states they are not included.
Under Reporting Accident Damage
The APA found some dealers under-reporting accident damage on vehicles, especially if the vehicle was a former daily rental or if it came from the province of Quebec, "likely because the vehicle history databases … do not receive collision information on these vehicles systematically. Large daily rental companies are self-insured and do not file a claim when damage occurs". (APA, 2012)
OMVIC's Response
OMVIC is the regulator of motor vehicle sales in the province of Ontario. On behalf of the Ministry of Consumer Services OMVIC administers and enforces the Motor Vehicle Dealers Act (MVDA). Any alleged breaches of the MVDA (or any other consumer statues) identified in the APA report, will be reviewed and appropriate action taken.
Should a consumer encounter a dealer attempting to add fees on top of an advertised price they should refuse to pay the fee, shop elsewhere and report the offending dealer to OMVIC (if possible keep copies of all documentation including the advertisement).
Curbsider Dangers
The APA report clearly and convincingly demonstrated the very real dangers posed by curbsiders. Lurking in the private classifieds, both online and in print, curbsiders usually pose as private sellers but are anything but; these illegal sellers are actually in the business of selling cars. As the APA report clearly demonstrated, the cars they sell are often misrepresented and may be accident damaged, odometer tampered, branded (write-off repaired), stolen or have liens.
All six curbsiders in the APA report misrepresented the vehicles offered for sale; two reported the vehicles had been in minor collisions when they were in fact insurance write-offs with dubious repairs. They seemingly lacked little concern about selling these potentially dangerous vehicles to unsuspecting families. It should be noted that the one legitimate private seller the APA investigated also significantly misrepresented the vehicle he was selling claiming his "lady driven, safety and e-tested" (APA, 2012) 2007 Honda Fit had been involved in a relatively minor collision – it was in fact a rebuilt insurance write-off.
OMVIC expends considerable resources investigating and prosecuting curbsiders. In 2011 80 individuals were charged. The alleged curbsiders identified in the APA study will also be investigated by OMVIC and appropriate action taken.
OMVIC has no jurisdiction over legitimate private sellers, no matter how egregious their misrepresentations.
What Consumers Need to Know About Curbsiders (and Private Sales)
To avoid getting caught, and to make it nearly impossible for consumers to find them again, curbsiders employ common strategies: frequently changing cell phones and asking potential buyers to meet them in a public location such as a business or mall parking lot. It is also very common for the vehicles offered for sale not to be registered in their names.
How to Avoid Curbsiders
A car buyer's rights depend entirely upon whom they buy from. Consumers who buy vehicles from a curbsider or private seller have no protection. There is no consumer law that covers private transactions. This means the only recourse for a consumer who has a problem with a private transaction is the courts; and in the case of a curbsider, if you can't find them again, the courts are unlikely to be of great benefit. Therefore, learning to spot these telltale signs of a curbsider is vitally important:
- They have multiple vehicles for sale or their phone number appears in numerous ads
- Their price is considerably lower than similar advertised vehicles
- They only want to meet in a public place or parking lot
- They won't allow a purchaser to have their mechanic inspect the car
- The sellers name does not match the vehicle ownership (ask to see the seller's driver's license and compare them!)
- They want cash or are in rush to complete the transaction.
Consumers considering a private purchase should:
- Have vehicle inspected by a trusted mechanic
- Purchase a reliable vehicle history report and Used Vehicle Information Package (UVIP). Do not solely rely on reports or UVIPs provided by the seller as they may have had information removed or be outdated
- Be very cautious of deals that seem too good to be true
- Verify vehicle is actually in the seller's name
- Learn how to spot curbsiders – visit buywithconfidence.ca for tips
Conclusion
The APA report, while acknowledging some registered dealers are not in full compliance with MVDA regulations, clearly demonstrates improvements in the industry. Further, the report makes it clear curbsiders have become even more prevalent with the advent of online marketplaces and they pose a very real threat to Ontario car buyers.
Consumers should understand they are only protected by OMVIC, the Motor Vehicle Dealers Compensation Fund and Ontario's consumer protection laws when they buy from a registered dealer. Consumers who buy privately should recognize the risks and be extra vigilant.
Since 2009 OMVIC has dedicated extensive resources to educating consumers through the "Avoid Curbsider" campaign. More information can be found at buywithconfidence.ca.
To report a possible curbsider e-mail OMVIC at nocurbs@omvic.on.ca or call 1-888-NO-CURBS
About OMVIC:
The Ontario Motor Vehicle Industry Council (OMVIC) regulates motor vehicle dealers in Ontario and enforces the Motor Vehicle Dealers Act (MVDA) on behalf of the Ministry of Consumer Services. OMVIC maintains a fair and informed vehicle sales marketplace by regulating dealers and salespersons, regularly inspecting Ontario's 8,000 dealerships and 24,000 salespeople, maintaining a complaint line for consumers and conducting investigations and prosecutions. OMVIC is also responsible for administering the Motor Vehicle Dealers Compensation Fund on behalf of its Board of Trustees.