Consumers may be entitled to compensation for any financial loss during their car-buying journey

There are instances where, unfortunately, many consumers find themselves in difficult situations after they have purchased a new or used vehicle. Specifically, financial loss and no one wants to incur this, not even if it’s a temporary one. Thankfully, OMVIC may be able to provide financial compensation from the Motor Vehicle Dealers Compensation Fund, which is a consumer protection program financed by Ontario’s registered motor vehicle dealers.

The fund allows car buyers, who have purchased from OMVIC-registered dealers and who meet the eligibility criteria, to receive financial assistance if something goes wrong with a vehicle purchase or lease agreement.

How to make a claim from the compensation fund

If you are eligible for compensation, you may receive up to $45,000 per vehicle transaction. To qualify for this, you must meet one or more of the eligibility criteria and the claim must be submitted within two years of meeting those eligibility criteria. Examples include consumers who have been affected by the following:

Dealers who have failed to remit payment on an extended warranty, or contract, or have not paid for a repair that would have been covered by their warranty contract;
Dealers who have failed to remit or honour the conditions of a service plan agreement; and
Dealers who have failed to satisfy a court order that becomes final.

Instances when you cannot make a claim

Though OMVIC’s compensation fund is meant to protect consumers, there are instances where claims are not eligible, which include:

Consumers who purchased a motor vehicle privately (i.e., not through an OMVIC-registered dealer);
If the motor vehicle was purchased for business purposes;
If the consumer is related to an OMVIC-registered dealer;
The consumer is complicit in illegal activity in the motor vehicle transaction; and
A consumer who misrepresents the nature of the claim or provides false or misleading evidence in support of the claim.

The claims process explained

Before making a claim, always contact OMVIC’s consumer support team at [email protected] or 1-800-943-6002 for expert advice.

It is important for a consumer to then contact the registered dealer in an attempt to work out a reasonable solution before opting to make a claim. If the issue remains unresolved, the consumer may be eligible to make a claim to the compensation fund.

Below is a summary of how the claims process works:

The claimant completes and submits the compensation fund application package along with supporting documents.
OMVIC staff review the application to ensure it is complete.
The application is sent to the compensation fund Board of Trustees for review to ensure the application meets the eligibility criteria. These individuals manage the fund and ensure that it is administered in a responsible manner.
OMVIC staff will inform all claimants of the Board of Trustee’s final decision. If a claim is denied, the claimant has the right to appeal the decision.

Overall, the importance of buying from an OMVIC-registered dealer is key, as the compensation fund does not pay out on vehicles bought privately. Make sure that all the terms of the sale are written explicitly in the contract as there is no cooling-off period on vehicle sales in Ontario. Once a contract is signed, it’s much easier and less costly to avoid a problem altogether, rather than to try to put it right after the purchase, even when a dealer has behaved dishonestly.

Help is on the way!

OMVIC is there to help consumers navigate the process of buying a new or used vehicle and ensure dealers comply with the law. 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.

Follow OMVIC on social media to stay up to date on the latest news.
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