If you’re in the latter situation, and are contemplating returning said vehicle to the seller, in some really impolite way, and/or seeking some monetary adjustment, what are your options? 

Let’s take a look…

First off, let’s address if you have legitimate beef or not, because unwinding a used car deal, or significantly altering the numbers, is no small thing.
 
Cases basically fall into two camps. In one camp are cases that industry and government have already deemed totally unacceptable — you will have lots of leverage and precedence on your side and you will win. In the other camp are those that are not so cut and dry. 

But after our discussions with industry, government and consumer advocate experts, your order of recourse options, for all cases, are pretty clear:

  • First go back to the selling dealer and see if you can work out your differences.
  • If that doesn’t work, contact the dealer association your dealer belongs to (chances are it has a conflict resolution process).
  • If that doesn’t work either, contact the authority that upholds the province’s respective legislation as it pertains to vehicles sales (most often called a “Motor Vehicle Dealers Act”). Sometimes these bodies are extensions of government, sometimes they are industry councils. Either way, it’s in their interest to settle disputes, and they have the authority to charge dealers under their respective “Acts” and can get you money via specific “compensation funds.”
  • Small claims court should be your last resort.

In the “not cut and dry” camp you will finds lots of disgruntled buyers, particularly those who have encountered major mechanical problems within the first few weeks of ownership.

“People get stuck with the idea that this thing stinks, I’m not going to put a penny into it, I’m going to cancel the sale,” notes George Iny, Canada’s most prominent automotive consumer advocate, and president of the Automobile Protection Association (APA).

“In practice it is very difficult to cancel the sale.” You would have to evoke provincial legislation pertaining to the sale of consumer goods, and prove, in a small claims court, that the vehicle was fundamentally unfit for its stated purpose. Sticking a new transmission into the thing is harsh, but the vehicle is, well, still a vehicle, and one that will now probably provide you with years of service. 

“Unless you bought real junk, you’re better to go back to the dealer, to get repairs, or negotiate some kind of price adjustment,” says Iny. “Because if the car isn’t a (total) piece of junk, the issue really becomes one of over payment, you overpaid for the condition of the car.”

Denis Savitan, of BC’s Motor Vehicle Sales Authority (MVSA), notes that consumers erroneously think vehicles are just like a consumer good (TV, computer, appliance) you would purchase from a major retailer.

And only Quebec has a “cooling off” period, and only then if the vehicle is financed.
Savitian says a car purchase is more like a house purchase. “Unless you have some ‘subject to’ clauses written in, when the deal is done, you own the house, you own the car.”

He also notes that consumers often misconstrue an after-sale policy a dealer may be offering: “A 30-day exchange policy is not the same as a 30-day return policy.”

If you’re trying to solve these disputes, Savitan says to make sure you’re talking to the dealer principal, and not just a salesperson. 

This may surprise you, but used car dealers aren’t required by law to offer exchange and/or warranty policies, but most do to get your business. They just need to sell you a vehicle that can stand up to consumer protection and “Motor Vehicle Act” legislation.

Iny says a lot of dealer-consumer conflict arises when consumers suddenly come face to face with the limitations of those warranty policies, which typically have a limit of how much the dealer is prepared to spend.

Opting for additional warranty coverage provided by third-party providers will ease some of the pain associated with after-sale repairs.

But if the dealer is giving you the runaround about a major mechanical fault, the answer, according to Iny, “is not going back to get more runaround.” He suggests first sending a polite letter outlining your grievances (so the clock stops), and getting a second opinion about the repair in question, so the extent of the issue is clear to both parties.

Bob Pierce of Ontario’s Used Car Dealers Association (UCDA) says the worse thing consumers can do in these disputes is getting the vehicle repaired somewhere else and presenting the dealer with a bill. “The dealer is just going to say no way,” Pierce says. “He has the right to inspect the vehicle, to make sure it has not been abused.” Pierce also notes that if the dealer agrees to repair the vehicle, he will surely want to use his own suppliers or repair facilities.

Whether UCDA steps in to mediate, or the Ontario Motor Vehicle Industry Council steps in to mediate, it is much better than going to court, says Pierce. “Mediation works. The dealers don’t want to go to court. Consumers don’t want to go to court.”

Now, if you’ve really been sucker punched, chances are you won’t even need to go to court, thanks to stronger “disclosure” laws in Canada. 

Ontario, in particular, has made great strides here, via its new “Dealer Act” that came into effect last January. Under this Act, 90-day contract cancellation is available for consumers, if dealers do not disclose certain key items. These items would include: failure to accurately disclose odometer readings (because they were “rolled back”); failure to disclose past use of a vehicle as a police cruiser, emergency service vehicle, taxi, limousine or daily rental; and failure to disclose that a vehicle has been branded as rebuilt or salvage.

And it’s worth to note, that you would not be entitled to this if you bought privately, as this only applies to licensed dealers in the province of Ontario. Other provinces take such nefarious activity just as seriously, even though they may not have it written in so specifically in their respective “Acts.” Check their websites.

But sometimes you will have no choice but to go to court. OMVIC president, Carl Compton, says disputes over who pays what for used cars that need significant repairs are “contractual” in nature: “Only in a court can you review documents, call and question witnesses… We (OMVIC) are not a ‘trier of fact.”

Compton notes that even when OMVIC determines a dealer is “dead wrong” and charges them for breaching some aspect of the dealer legislation, it still might not be the end of the story. If the dealers still refuses to refund the customer’s money, or take the car back, then you’re off to small claims court.

“The only entity who can reach into the till and extract money is a court of competent jurisdiction,” says Compton. (And only if there is some to extract.)

And for those planning to go to court, here’s a safety tip from Michael Turk, an Ontario lawyer who frequently represents APA members who end up having to take dealers to court.

Before he heads into court with a client Turk gets them to consider how “practical” is this alternative. “It’s a balancing act. The court process is lengthy. If you want cancellation of the contract you can’t be driving the car. There is also the stress and aggravation. And at the end of the day, you still run into the problem of having to collect on your judgment.

But they have won their share of cases, so it does work.

This discussion concerns “worst case” scenario stuff; so don’t let it scare you away from picking up a nice ride at a used car dealer. 

According to Compton, in Ontario alone, there are 1.4 million transactions between dealers and customers every year: “OMVIC is the clearing house for complaints in the province. We get about 30,000 phone calls a year. About 1,200 to 1,500 of those get to the point where we pick up the phone and call the dealer. And of those, maybe 70 to 80 we need to subject to disciplinary action. If you consider that ratio you can see that it’s a pretty reliable way to do business.”

And obviously, the best way to resolve conflict is never get into it in the first place.

  • Deal with reputable firms that are members of reputable associations;
  • Consider additional warranties;
  • Get the vehicle inspected and assessed by a third party:
  • Check vehicle history with CarProof or CarFax and provincial reports;
  • Do extensive brand and model research.