A 48-hour cooling off period, which has been “discussed ad nauseam at the committee level for a decade,” would have given consumers time to back out of a vehicle purchase before they took delivery.
The Ontario government recently requested feedback on proposed changes to the Motor Vehicle Dealers Act (MVDA) to improve the sales process for consumers and businesses. As part of the consultations, the Ministry of Public and Business Service Delivery sought views on a proposed “cooling-off period” for vehicle sales, which would allow car buyers two days to cancel their purchase contract for any reason.
Ontario’s Consumer Protection Act already provides a cooling-off period — a specific number of days during which you can cancel a contract without penalty — when you buy a newly built condominium, a time-share property, a product or service from a door-to-door salesperson, or pay in advance to join a fitness club.
Many retailers offer a return and refund policy for most big-ticket items. Order thousands of dollars’ worth of appliances and you can often cancel the order for a full refund if you haven’t received the merchandise yet (custom or special orders typically don’t qualify).
Yet automobile sales are exempt from any kind of cooling-off period.
“It’s been discussed ad nauseam at the committee level for a decade,” said Shari Prymak, who sits on a consumer advisory committee that informs the Ontario Motor Vehicle Industry Council (OMVIC). “The dealers’ association has strongly rejected it.”
The auto dealers’ outsized influence was evident when Minister of Public and Business Service Delivery and Procurement Todd McCarthy flatly rejected the cooling-off period in a tweet on May 24…
“This was extremely disappointing news, especially because the minister didn’t even wait to hear the feedback from the consumer advisory committee before announcing this decision,” said Prymak. “The dealer associations lobbied hard and got what they wanted.”
Frank Notte, director of government relations for the Motor Vehicle Retailers of Ontario, staunchly defends the dealers’ position that a cooling-off period would not serve consumers or the industry well.
“A cooling-off period opens the door to a cascade of consequences for both dealerships and customers. For example, an individual visits multiple dealerships, test-driving various cars, and asks for a cooling-off period,” after signing a sales contract for each one, Notte explained…
The “red tape” a cooling-off period would introduce is a dubious claim, countered George Iny, Director of the Automobile Protection Association consumer group. Quebec is one of two jurisdictions in Canada where auto sales are subject to a cooling-off period in certain cases (British Columbia provides it for automobile leases).
“There is very little, if any, red tape to cancel the sale of a vehicle prior to delivery. The registration would not be completed and the financing paperwork would not be forwarded to the lender,” Iny said, given that everything would be on hold for just 48 hours.
Iny said the primary reason auto dealers likely reject the cooling-off period is that it would put too much power in the hands of car buyers.
“I suspect the real concern is consumers shopping around with the signed contract looking for a better deal,” he said. “Years ago, when a cooling-off period was discussed at stakeholder meetings, that was the real boogeyman: losing control of the consumer.”
While the minister vetoed the cooling-off period, Prymak takes consolation in other proposed changes to the Motor Vehicle Dealers Act that may make it into the updated legislation, such as limiting the ability of dealers to require customers to purchase add-on options such as rustproofing, limiting the selling of “as-is” vehicles, and expanding buyers’ eligibility for the Motor Vehicle Dealers Compensation Fund…
(Note from the APA: Auto retailing practices sank to old lows from years gone by due to vehicle shortages arising during the Covid pandemic; they have not really recovered since. Ministry officials are currently reviewing comments received during the public consultation with a view to making recommendations. The APA hopes that Ministry officials will not cave into the dealer lobby on the other significant improvements to consumer protection being considered. Consumers surveyed by Car Help Canada overwhelmingly supported a cooling off period – over 95 percent of nearly 500 respondents polled.)