Warranties and service plans: Practice Quiz | DealerPrep

Question 1

Under O. Reg. 333/08, what does an "extended warranty" cover?

Accepted Answer

Section 1 of O. Reg. 333/08 defines an extended warranty as a contract covering the costs of repairing or replacing motor vehicle components, including the labour to do so, that is in addition to a warranty supplied by law or implied by the operation of law.

Answer

The cost of repairing or replacing motor vehicle components, including labour, on top of any warranty supplied or implied by law

Answer

Routine maintenance services such as oil changes and tire rotations bundled with the vehicle sale

Answer

Only the manufacturer's original new-vehicle warranty for the basic warranty period

Answer

Insurance against theft, collision damage, and third-party liability for the vehicle

Question 2

True or false: a service plan under O. Reg. 333/08 is a contract sold to a vehicle purchaser or lessee before delivery, where someone agrees to provide goods or services to alter or maintain the vehicle.

Accepted Answer

Section 1 of O. Reg. 333/08 defines a service plan as a contract sold by or through a registered dealer before the vehicle is delivered, under which a person agrees to provide goods or services to alter or maintain the vehicle. Component repair coverage is the separate "extended warranty" definition.

Answer

True

Answer

False

Question 3

Under section 47 of O. Reg. 333/08, a registered dealer cannot sell or facilitate the sale of an extended warranty to a non-dealer customer unless the warranty is backed in one of two specific ways. Which two?

Accepted Answer

Subsection 47(1) of O. Reg. 333/08 permits the sale or facilitation only where the warranty's performance is insured by an Insurance Act licensed insurer, or where the seller has posted an irrevocable letter of credit to the Compensation Fund. No other backing satisfies the rule.

Answer

The warranty's performance is insured by an insurer licensed under the Insurance Act

Answer

The seller has provided an irrevocable letter of credit to the Compensation Fund in the prescribed amount

Answer

The dealer has posted a surety bond directly with OMVIC for the warranty value

Answer

The dealer signs a personal indemnity covering all future claims

Answer

An unrelated third-party guarantor in good standing has agreed to step in if needed

Question 4

When the seller of an extended warranty is the same dealer who sold or leased the vehicle, what is the minimum irrevocable letter of credit amount they must post to the Compensation Fund under O. Reg. 333/08?

Accepted Answer

Clause 47(1)(b)(i) of O. Reg. 333/08 sets the letter-of-credit minimum at $100,000 when the warranty seller is the dealer who sold or leased the vehicle. The $500,000 figure in clause (b)(ii) applies in any other case, such as a separate warranty company.

Answer

$50,000

Answer

$100,000

Answer

$250,000

Answer

$500,000

Question 5

A customer at a dealership signs a third-party service plan facilitated by the dealer at the same time as the vehicle purchase, and pays the dealer the plan fee on the spot. Under section 48 of O. Reg. 333/08, by when must the dealer forward the contract documents and any payments collected to the seller of the plan?

Accepted Answer

Clause 48(6)(c) of O. Reg. 333/08 requires the facilitating dealer to provide the seller of the service plan with all contract documents in the dealer's possession and all payments received within seven days after the parties sign. The 30-day window applies only to extended warranties under clause 47(7)(c).

Answer

Within 7 days after the parties enter into the contract

Answer

Within 14 days after the parties enter into the contract

Answer

Within 21 days after the parties enter into the contract

Answer

Within 30 days after the parties enter into the contract

Warranties and service plans

Under O. Reg. 333/08, what does an "extended warranty" cover?

True or false: a service plan under O. Reg. 333/08 is a contract sold to a vehicle purchaser or lessee before delivery, where someone agrees to provide goods or services to alter or maintain the vehicle.

Under section 47 of O. Reg. 333/08, a registered dealer cannot sell or facilitate the sale of an extended warranty to a non-dealer customer unless the warranty is backed in one of two specific ways. Which two?

When the seller of an extended warranty is the same dealer who sold or leased the vehicle, what is the minimum irrevocable letter of credit amount they must post to the Compensation Fund under O. Reg. 333/08?

5 questions here. 1,000+ more in the app.