Registration and dealer classes

The Motor Vehicle Dealers Act, 2002 requires every person who acts as a motor vehicle dealer or salesperson in Ontario to be registered with OMVIC before the activity starts. The Act sets the prohibition and the criteria for refusing or revoking a registration. Ontario Regulation 333/08 (the General Regulation) sets the operating detail: who has to take the certification course, what a salesperson application has to contain, how long a registration lasts, and the seven classes of dealer and what each class is permitted to do.

Section 4 of the Act applies to every person trading in a motor vehicle in Ontario, with one narrow carve-out in section 5 for an individual trading their own personal-use vehicle or a family member’s. Everyone else, including officers and directors of a corporate dealership who want to sell on behalf of the corporation, has to hold their own current registration in the right capacity.

What this category covers

This category tests the entry rules: who has to register, what the application has to show, how long a registration lasts, the difference between the seven dealer classes, and how OMVIC handles a refusal, suspension, or revocation. The conduct rules that come after registration are tested in their own categories. Here you confirm that you can place a registrant into the right class and recognise when an application or an activity falls outside what that class allows.

Key rules to remember

Trading without registration is prohibited

Section 4 of the Act says no person shall act as a motor vehicle dealer unless registered as a dealer, and no individual shall act as a salesperson unless registered as a salesperson. “Trade” is defined in section 1 to include buying, selling, leasing, advertising, exchanging, or negotiating any of those activities. Negotiating a deal in a sales cubicle, signing a bill of sale on the dealer’s behalf, and posting a vehicle for sale to induce an offer all count. Section 4(2) also prohibits a dealer from carrying on business in a name other than the registered name or inviting the public to deal at any place other than the authorized place of business.

Dealer applicants must satisfy section 6 and the regulation’s prescribed requirements

Section 6(1) of the Act lists the grounds on which the Registrar must refuse a dealer registration: an applicant who cannot reasonably be expected to be financially responsible, whose past conduct gives reasonable grounds to believe the business will not be carried on in accordance with law and with integrity and honesty, or who provides false information on the application. Section 11(1) of Ontario Regulation 333/08 adds the prescribed requirements: the applicant must be at least 18 years old, must be current with retail sales tax, must not be in default to the Motor Vehicle Dealers Compensation Fund, and the person in charge of the dealership’s day to day operations must have completed the Automotive Certification Course unless they have been continuously in charge of a registered dealer since January 1, 2007 with no break of two consecutive years.

Salesperson registration is tied to a sponsoring dealer

Section 13 of Ontario Regulation 333/08 requires a salesperson applicant to have completed the certification course and to be employed or retained by a registered dealer. Section 14 makes it a condition of registration that the salesperson works for one dealer only, unless every dealer involved files written consent on a form approved by the Registrar. Section 17(2) of the regulation says a salesperson’s registration expires when none of the dealers to whom the salesperson is registered employ the salesperson any longer. The dealer and the salesperson each have five days under section 24 of the Act to notify the Registrar in writing of the start or end of the employment, or of any change in address.

Seven classes and their limits

Section 18 of Ontario Regulation 333/08 establishes the registration classes. A general dealer has two subclasses (new and used; or used only) and is the only class that can sell to retail consumers without a class limit. A broker arranges a trade for a non-dealer customer but cannot take possession of the vehicle, cannot handle the funds, cannot sell extended warranties, and cannot be registered in any other class. A wholesaler trades only with other registered dealers, with the Crown, or with exempt parties under section 21. An exporter buys vehicles only for export outside Ontario. An outside Ontario dealer is registered in another jurisdiction and can buy from exempt Ontario auctions for export only; section 23(2) prohibits an outside Ontario dealer from having a place that invites the public to deal. A lease finance dealer can only buy, lease through a general dealer for a term of at least 120 consecutive days, and sell previously leased vehicles to the lessee, the driver, another registered dealer, or at an exempt auction. A fleet lessor leases to non-consumer lessees, with a short-term subclass that can lease to a consumer for a fixed term under four months.

A registration is not transferable and lasts a fixed term

Section 6(3) of the Act says a registration is not transferable. Section 17 of Ontario Regulation 333/08 ties expiry to the date on the certificate. In OMVIC’s published practice, a dealer registration runs for one year and a salesperson registration for two; both must be renewed with the prescribed fee and any continuing-education requirement under section 11(1.1). Section 13 of the Act requires a corporate dealer to notify the Registrar within 30 days of any share issue or transfer that puts a person at or above 10 per cent beneficial ownership.

Common mistakes

• Letting a salesperson work the floor before OMVIC has confirmed the registration. The dealer is on the hook under section 4(3) for retaining an unregistered salesperson.
• Treating an officer or director of a corporate dealer as automatically authorised to sell. They have to be separately registered as a salesperson if they sell or lease on behalf of the corporation.
• Assuming a wholesaler or exporter can sell to a retail customer. The class limits in sections 21 and 22 of Ontario Regulation 333/08 prohibit it.
• A broker taking possession of the vehicle, holding the buyer’s funds, or selling an extended warranty. Section 20 of the regulation rules each of these out.
• Forgetting the five-day notification window in section 24 of the Act for a change of address, a change of officer or director, or a salesperson’s start or end date.
• Missing a renewal deadline and continuing to trade. The registration ends on the certificate’s expiry date unless a renewal application is filed before that date.
• Confusing the lease finance dealer’s 120-day minimum lease term with the short-term fleet lessor subclass, which is the only class that can lease to a consumer for under four months.

How OMVIC enforces this

If the Registrar believes an applicant or registrant fails section 6 or the prescribed requirements, section 9 of the Act requires the Registrar to issue a written notice of proposal setting out the reasons and the registrant’s 15-day right to request a hearing before the Licence Appeal Tribunal. Where the Registrar considers it in the public interest, section 10 lets the Registrar order an immediate temporary suspension that takes effect on service. The Tribunal can confirm, vary, or set aside the proposal under section 9(5), and may attach conditions to the registration. Section 12 of the Act prevents a person whose registration was refused, revoked, or refused renewal from reapplying until the prescribed two-year period has passed and there is new or other evidence or a clear change in material circumstances. On a section 4 conviction, section 32 of the Act sets a minimum fine of $5,000 and a maximum of $50,000, two years less a day of imprisonment, or both for an individual, and a maximum fine of $250,000 for a corporation.

Where to learn more

The two primary sources for this category are the Act and Ontario Regulation 333/08. Both are reproduced section by section on this site under Motor Vehicle Dealers Act, 2002 and Ontario Regulation 333/08, with deep links from the practice questions on this page. The DealerPrep iPhone app carries the full bank of registration questions, including class-specific scenarios, with progress tracking for paid subscribers.