Curbsiders

A curbsider is an unregistered person who sells motor vehicles for profit while pretending to be a private seller. The trade is illegal under section 4 of the Motor Vehicle Dealers Act, 2002, which forbids any person from acting as a motor vehicle dealer without being registered, and section 32 of the Act backs the prohibition with criminal-style penalties. This category is about how the line between a registered dealer, a true private seller, and a curbsider is drawn, what registered dealers are required to do when they encounter one, and what enforcement looks like when OMVIC catches one.

The rules apply to two audiences at once. A curbsider is the target of the prohibition itself. A registered dealer or salesperson is bound by the related rule that they cannot supply vehicles to anyone who should be registered but is not, and they have practical obligations around buyer identification and recordkeeping that exist partly to keep curbsiders out of the supply chain.

What this category covers

The category covers who counts as a curbsider, which trades are exempt from registration, the minimum and maximum fines a court can impose, the freeze orders OMVIC can use against non-registrants, and the operational steps a dealership takes so it does not end up selling to one or buying through one. It is closely tied to the registration category and to the records-and-premises category, but the focus here is the unregistered seller and the dealer’s defensive controls.

Key rules to remember

Trading without registration is prohibited

Subsection 4(1) of the Act states that no person shall act as a motor vehicle dealer unless registered as one, and no person shall act as a salesperson unless registered as one. A curbsider violates this rule on every transaction. The Act treats “trading” broadly and includes buying, selling, leasing, advertising, and offering to do any of these. The moment a person carries on this activity for profit, registration is required.

The personal-use exemption is narrow

Section 5 of the Act exempts an individual who trades in a motor vehicle on their own account or on the account of a family member, but only if the vehicle was used primarily for the personal use of the individual or that family member. The exemption protects a genuine private sale. It does not protect someone who buys vehicles to flip, who registers vehicles in friends’ or relatives’ names to disguise the activity, or who runs a vehicle through their driveway as inventory. Once a pattern of trading appears, the exemption falls away.

The minimum fine for trading without registration is $5,000

Subsection 32(4) of the Act sets a $5,000 minimum fine for a conviction under subsection 4(1). The court has no discretion to go lower. The general ceiling under subsection 32(3) is a $50,000 fine for an individual, up to two years less a day in jail, or both, and a $250,000 fine for a corporation. A court may also order compensation or restitution under section 33 in addition to the fine. A two-year limitation under subsection 32(5) starts running when the facts first come to the director’s knowledge.

Dealers cannot supply vehicles to an unregistered dealer

Subsection 4(4) of the Act prohibits a registered dealer from supplying motor vehicles to another dealer for the purpose of trading unless that other dealer is registered. Wholesale auctions, broker referrals, and dealer-to-dealer trades are all caught. If the buyer is taking inventory rather than a personal vehicle, the seller has to confirm registration before the deal goes through. A registered dealer must produce its registration certificate on request, so asking for it is the standard check.

OMVIC can freeze a curbsider’s money

Section 22.1 of the Act lets the director order the freeze of money or assets held by a non-registrant who is alleged to have conducted business that required registration, where criminal or regulatory proceedings have started or a search warrant has been issued under section 19. The order can direct a bank to hold funds, or direct the curbsider to refrain from withdrawing them. This is in addition to whatever fine the court ultimately imposes.

Common mistakes

• Treating the personal-use exemption as a general permission for friends to sell vehicles for each other. The exemption requires actual personal use of the vehicle by the individual or a family member, not a paper trail.
• Letting a buyer take a permit “in trust” without registering the vehicle in the buyer’s name first. A curbsider’s whole technique is to take a signed permit from the dealer’s customer and reassign it themselves, so the dealer must check identification and complete the registration in the actual buyer’s name before handing over the keys.
• Skipping the OMVIC registration check when a buyer claims to be a wholesaler or broker. Registration certificates are public information; valid registrants appear on the OMVIC website, and a real dealer must show the certificate on request.
• Ignoring patterns in the dealership’s own records. The garage register a dealer is required to keep under section 60 of the Highway Traffic Act, together with the trade records under section 53 of Ontario Regulation 333/08, will show repeat buyers; a name that appears on multiple deals in a short window is the strongest indicator that the dealer’s lot is feeding a curbsider.
• Assuming that a vehicle’s clean appearance and a Safety Standards Certificate from a Ministry-licensed garage rule out a curbsider history. Many curbsider vehicles come from insurance write-offs that have been superficially repaired.

How OMVIC enforces this

OMVIC investigators run dedicated curbsider files separate from misconduct investigations against registered dealers. Investigators review online classifieds, follow up on consumer complaints, attend public auctions, and obtain search warrants under section 19 of the Act when they have reasonable grounds. Charges are laid in provincial court under section 32, and convictions carry the $5,000 minimum fine plus potential jail and restitution orders. Where consumer money is at risk, the director uses the section 22.1 freeze power to lock up funds before sentencing. OMVIC publishes curbsider convictions on its public site, and a registered dealership found to have sold to a curbsider can face its own discipline proceeding under section 17 of the Act on top of any charges.

Where to learn more

The full prohibition and exemption sit in sections 4 and 5 of the Motor Vehicle Dealers Act, 2002; the offence and penalty sections at 32 and 33, the freeze power at section 22.1, and the search and investigation powers at sections 18 and 19 are all on the same page. OMVIC publishes a public list of recent curbsider convictions and a registrant search tool, both useful when a buyer or seller’s status needs to be verified. The DealerPrep iPhone app carries the full pool of practice questions for this category for paying subscribers.