Once a dealer registers a demo vehicle it is used inventory, OMVIC clarifies

OMVIC’s October 21, 2025 dealer bulletin settles a recurring question. A vehicle a dealership registers in its own name, even briefly and even with low kilometres, is used inventory. The bulletin states the rule plainly: “There is no mileage threshold that changes this classification.” The vehicle can still be marketed through manufacturer incentive programs, but it is sold under used-vehicle rules from that point forward.

The line OMVIC drew

A demo vehicle starts life on the manufacturer’s books. The moment a dealer becomes the registered owner, the vehicle’s status changes.

The vehicle cannot be advertised as new. Once ownership has been issued, the word “new” no longer fits. Section 4(2) of the Code of Ethics requires every representation in a trade in motor vehicles to be “legal, decent, ethical and truthful.” Calling a registered demo “new” is none of those.

Advertising must reflect actual condition. The bulletin prohibits stock photography for demo vehicles. Section 4(1) requires registrants to be “clear and truthful in describing the features, benefits and prices” of the vehicles they trade. A stock photo is by definition not the vehicle the consumer is being shown.

The bulletin then requires the dealership to disclose the vehicle’s actual ownership history and current status, including that it was a demonstrator. That disclosure pulls in the s. 42 catch-all in O. Reg. 333/08, which captures “any other fact about the motor vehicle that, if disclosed, could reasonably be expected to influence the decision of a reasonable purchaser or lessee …”

What the contract has to show

The bulletin lists six items that have to appear in the sales contract for a demo vehicle:

• Designation as used demonstrator.
• Complete ownership history.
• Vehicle status information.
• In-service date (warranty commencement).
• Remaining warranty details.
• Current odometer reading.

The first four flow from the broader disclosure rule in s. 42 of O. Reg. 333/08, which lists the items that have to appear in any used-vehicle contract under s. 40 (2). The current odometer reading is a separate paragraph in the same regulation. The in-service date matters because the manufacturer’s warranty clock starts when the vehicle goes into service as a demo, not when the consumer takes delivery, so the consumer must understand how much warranty they are actually buying.

Manufacturer incentives still work

The bulletin does not block dealers from marketing a former demo through a manufacturer incentive program. It only requires the dealer to advertise and contract for the vehicle as used. If the manufacturer offers a demo-specific incentive, the dealer can apply it and disclose it. The vehicle is still classified as used; the price reflects the program, and the contract reflects the disclosures.

Low kilometres are not a defence

OMVIC’s clarification removes a defence. A dealer cannot say “the demo only had 200 kilometres on it, so I sold it as new.” Registration, not the odometer, is the trigger. That aligns with how O. Reg. 333/08 treats vehicles in s. 42 paragraph 5: when a dealer cannot determine the total distance, the contract must say so; the regulation never permits a dealer to convert a registered vehicle back to new because of low kilometres.

The bulletin also points dealers to OMVIC’s Advertising Guideline and Disclosures Guideline for the longer-form rules. Those guidelines are interpretive; the bulletin is the directive that pins the registration trigger to “used.”

What to learn

• Once a dealership registers a vehicle, it is used inventory. There is no kilometre threshold that keeps it new.
• Advertising must use real photographs of the actual vehicle. Stock photos do not satisfy Code of Ethics s. 4(1).
• Sales contracts for former demos must show used-demonstrator status, full ownership history, in-service date, remaining warranty, and current odometer. The disclosure obligations in O. Reg. 333/08 s. 42 apply in full.