Code of Ethics

The Code of Ethics that governs Ontario’s registered motor vehicle dealers is not a voluntary set of values. It is a regulation, Ontario Regulation 332/08 under the Motor Vehicle Dealers Act, 2002, and every word of it has the force of law. Sections 3 through 9 set the conduct standards; sections 10 through 22 build the discipline committee and the appeals committee that enforce those standards. Section 2 of the regulation states it bluntly: the rules apply despite any contract or waiver to the contrary, so a registrant cannot sign their way out of them.

The Code binds every registrant. That term covers a registered motor vehicle dealer (a corporation, partnership, or sole proprietor) and every registered salesperson the dealer employs or retains. Officers and directors of a corporate dealer who actually trade in vehicles are themselves registrants and personally bound by the Code. Most discipline cases OMVIC publishes turn on a section of this regulation rather than on the parent Act.

What this category covers

This category tests the seven conduct duties in sections 3 through 9 of Ontario Regulation 332/08, the dealer’s responsibility for the conduct of their staff, and the discipline committee process that follows when a registrant breaches the Code. The wholesale disclosure list in section 5 is tested separately under the wholesale disclosure category, but you should still recognise that it lives in the Code.

Key rules to remember

Integrity (section 3)

A registrant must be financially responsible in carrying on business. A registrant must never tell anyone, directly or indirectly, that a payment, commission, or other amount tied to a vehicle trade is fixed or approved by OMVIC, by a government authority, or by any motor vehicle association. Documentation fees, financing rates, and admin charges are set by the dealer, not by the regulator, and saying otherwise is a section 3 breach.

Clear and truthful disclosure and marketing (section 4)

Every description of a vehicle’s features, benefits, and price must be clear and truthful. Every representation made on behalf of the dealer, including advertising, must be legal, decent, ethical, and truthful. Before the dealer enters a contract with a retail customer, the dealer must explain the terms of that contract, including the customer’s financial and other obligations. A salesperson who hands a customer a stack of paper to sign without walking through the financial terms has broken section 4(3).

Wholesale disclosure (section 5)

Section 5 sets out the list of facts a dealer must disclose in the contract when selling or leasing a vehicle to another registered dealer. The list includes total kilometres, prior daily-rental, taxi, limousine, police, or emergency-services use, fire damage, flood damage, structural damage, total-loss declaration, branded titles under section 199.1 of the Highway Traffic Act, and any incident with repair costs over $3,000. Dealer-to-dealer disclosure feeds retail disclosure: if the upstream dealer hides a fact, the downstream dealer cannot disclose it to the customer.

Accountability (section 6)

A dealer must ensure every salesperson the dealer employs or retains carries out their duties in compliance with the regulation. A salesperson must not do, or fail to do, anything that causes their dealer to contravene the regulation or any other law about trading in vehicles. The Code makes the dealer responsible for the salesperson’s conduct on the floor, and the salesperson responsible for not pulling the dealer into a breach.

Compliance with the law (section 7)

Every document the registrant uses in a trade must be current and lawful. When a dealer sells a vehicle to a retail buyer, the dealer must facilitate the buyer’s compliance with subsection 11(2) of the Highway Traffic Act, the rule that requires a new permit to be obtained within six days of acquiring a vehicle, unless the buyer instructs the dealer not to.

Respect (section 8)

Registrants must not engage in any act or omission that, in the circumstances, would reasonably be regarded as insulting to human dignity or integrity, and must not use offensive symbols. Registrants must do business ethically and with respect for the rights and interests of the people they deal with.

Professionalism (section 9)

Section 9 is the catch-all and the section most often cited in discipline orders. A registrant must not engage in any conduct that, in the circumstances, would reasonably be regarded as disgraceful, dishonourable, unprofessional, or unbecoming of a registrant. A registrant must act with honesty, integrity, and fairness; must use best efforts to prevent error, misrepresentation, fraud, or any unethical practice; and must provide conscientious service with reasonable knowledge, skill, judgement, and competence. Subsection 9(5) adds a specific duty: when a dealer takes a trade-in and agrees to pay out an outstanding loan, repair lien, or storage lien on it, the dealer must actually do so. Failing to clear the lien on a customer’s trade is a section 9 breach.

Common mistakes

• Saying or implying that OMVIC has set or approved a documentation fee, a finance rate, or a commission. Section 3(2) prohibits even an indirect representation to that effect.
• Skipping the explanation of contract terms because the customer “seems to know what they are doing”. Section 4(3) makes the explanation mandatory before the contract is signed.
• Treating wholesale disclosure as optional between friends. Section 5 lists 22 items and they apply on every dealer-to-dealer sale, including auction lanes.
• Treating the salesperson’s misconduct as the salesperson’s problem alone. Section 6(1) puts that conduct on the dealer’s licence too.
• Forgetting the trade-in lien-payout duty in section 9(5). A dealer who promises to pay out the bank on a customer’s trade and then resells the vehicle without clearing the lien is a frequent discipline subject.
• Treating section 9’s “disgraceful, dishonourable, unprofessional or unbecoming” language as vague advice. Discipline panels read it as a substantive standard and apply it to bullying, intimidation, social-media misconduct, and rolled-back odometers alike.

How OMVIC enforces this

OMVIC enforces the Code through the discipline committee under section 17 of the Motor Vehicle Dealers Act, 2002. A complaint can come from a customer, another dealer, an inspection finding, or an investigation. Section 13 of the regulation bars the registrar from referring a complaint to the discipline committee after the second anniversary of the day the underlying facts first came to the registrar’s knowledge.

If the registrar refers the complaint, a panel of at least three discipline-committee members hears the matter. Section 14 of the regulation requires the panel to include two registrants, at least one in the same class as the subject (a dealer panellist for a dealer hearing, a salesperson panellist for a salesperson hearing), and at least one public member who has never been a registrant or worked for one. Under subsection 17(4) of the Act, the panel can order more education, require the dealer to fund staff training, fix costs, and impose a fine of up to $25,000. A party can appeal to the appeals committee within 30 days under section 19 of the regulation, and under subsection 17(6) of the Act that panel may overturn, affirm, or modify the discipline committee’s order. Subsection 17(11) of the Act requires the decisions to be made public.

Where to learn more

The full regulation is on this site at Ontario Regulation 332/08, with section anchors that match the citations above, and the parent Act is at Motor Vehicle Dealers Act, 2002. OMVIC publishes discipline-committee decisions on its public registrant search and in its Dealer Standard newsletter, and reading a few real orders is the fastest way to see how section 9 gets applied in practice. The DealerPrep iPhone app carries the full pool of practice questions for this category for paid subscribers.