Chapter 7

WHOLESALE DISCLOSURE IN CONTRACTS WITH

ANOTHER REGISTERED DEALER
7.01 Learning Objectives 7.04 Contract for Sale or Lease of a Vehicle
7.02 What Do You Know? to Another Registered Dealer
7.03 Introduction 7.05 Summary
7.06 Test Yourself

7.01
Learning Objectives
After completing this chapter, you will be able to
identify the information registered dealers must disclose
to other registered dealers in contracts for the sale or
lease of a vehicle.

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 7.02
What Do You Know?
Try answering these questions to test your knowledge:

1. Check any statement that is correct (there may be more than one
correct statement):
When selling to another dealer:
a) Selling dealers must disclose previous use as a taxi, police vehicle, etc.
b) Selling dealers must disclose damage repairs in excess of $3,000
c) Selling dealers must disclose if the vehicle has two or more adjacent
panels (that are not bumper panels) that have been replaced
d) Selling dealers are not required to make disclosures in
wholesale transactions
2. Are the requirements for the sale or lease of a vehicle to another dealer in
the MVDA the General Regulations or the Code of Ethics Regulations?
3. Provide two potential facts related to a vehicle’s history (not including the
examples given in question 1) that must be disclosed in dealer-to-dealer
sales and leases.
Keep these questions in mind as you read through the following section.

7.03
Introduction
As seen in Chapters 4, 5 and 6, the MVDA has sweeping requirements for the
THIS CHApTER type of information dealers must disclose to their customers. If dealers are to
details exactly what provide that information, they’ll have to collect it and share it as well. So when
selling/leasing dealers dealers take a vehicle in on trade, there are specific details to collect and record,
are required to disclose and when dealers sell or lease a vehicle to another dealer, or offer a vehicle at
in contracts with auction, the Code of Ethics Regulations (Ontario Regulation 332/08) of the
another dealer. MVDA specifies exactly what the selling/leasing dealer is obligated to disclose.

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 Chapter 7
WHOLESALE DISCLOSURE IN CONTRACTS
WITH ANOTHER REGISTERED DEALER

7.04
Contract for Sale or Lease of a Vehicle to
Another Registered Dealer
A contract for the sale or lease of a vehicle to another registered dealer is
covered under Section 5 of the Code of Ethics Regulations and stipulates the
following be disclosed:
1. If the vehicle is a used motor vehicle, the total distance that it has been
driven if the dealer can determine the distance
2. If the vehicle is a used motor vehicle and the dealer cannot determine
the total distance the vehicle has been driven, but can determine the
distance the vehicle has been driven as of some past date, a statement of
that distance and date, together with a statement that “the total distance
the vehicle has been driven is believed to be higher”
3. If the vehicle is a used vehicle and the dealer cannot determine the total
distance the vehicle has been driven, nor the distance the vehicle has
been driven as of some past date, a statement that “the total distance
the vehicle has been driven is unknown and may be substantially higher
than the reading shown on the odometer”
4. If the vehicle’s odometer is broken or faulty, has been replaced, has been
rolled back or is in miles
5. If any of the following is true, a statement to the effect that the vehicle
was previously:
a) Leased on a daily basis, unless the vehicle was subsequently owned
by someone other than a dealer
b) Used as a police vehicle or used to provide emergency services
c) Used as a taxi or limousine
6. If the vehicle has sustained any damage caused by fire
7. If the vehicle has sustained any damage caused by immersion in liquid
that has penetrated to the level of at least the interior floorboards
8. If there has been structural damage to the vehicle or any repairs,
replacements or alterations to the structure of the vehicle
9. If the vehicle is equipped with an anti-lock braking system that is
not operational
10. If any of the vehicle’s airbags are missing or are not operational
11. If the vehicle is materially different from the original or advertised
production specifications

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 12. If the vehicle has two or more adjacent panels that are not bumper
panels and that have been replaced
13. The make, model, trim level and model year of the vehicle
14. If any badge or other indication on the vehicle relates to a different
model than the model of the vehicle
15. If the total costs of repairs to fix the damage caused to the vehicle by a
collision or incident exceed $3,000, a statement to that effect and if the
dealer knew the total costs, a statement of the total costs
16. If the manufacturer’s warranty on the vehicle was cancelled
17. If the vehicle was declared by an insurer to be a total loss, regardless of
whether the vehicle was classified as irreparable or as salvage under
Section 199.1 of the Highway Traffic Act
18. If the vehicle previously received treatment in a jurisdiction other than
Ontario (i.e., was registered in a different province or state), and if so,
a statement indicating what jurisdictions the vehicle was registered in.
This requirement does not apply if the vehicle has since been registered
in Ontario for more than seven years
19. If the vehicle has been classified (branded) under Section 199.1 of the
Highway Traffic Act, as irreparable, salvage or rebuilt, a statement as to
how it was last classified
20. If the vehicle had been recovered after being reported stolen
21. Any other fact about the vehicle that affects the structural or
mechanical quality or performance of the vehicle and that, if disclosed,
could reasonably be expected to influence the decision of a reasonable
buyer or lessee to buy or lease the vehicle

When dealers take a vehicle in on trade, there are specific details to

collect and record. OMVIC highly recommends dealers enact a policy
and process that ensures trade-in disclosure documents/vehicle history
reports/etc. are provided to the staff person(s) responsible for
wholesaling vehicles, so that proper disclosure can be made when
selling to other dealers.

DEALER-TO- 7.05
DEALER disclosure is Summary
a legal requirement in the
To help ensure dealers can provide full disclosure to their retail customers,
Code of Ethics Regulations.
it’s important they make proper disclosure in wholesale transactions.
This way dealers, and ultimately their customers, will be able to make fair
and informed decisions.

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 Chapter 7
WHOLESALE DISCLOSURE IN CONTRACTS
WITH ANOTHER REGISTERED DEALER

7.06

Test Yourself
The first questions below are the same questions REmEmbER:
asked in “What Do You Know?” at the beginning of The questions on the
this chapter. Try answering these questions again and Automotive Certification
Test are in multiple-choice
compare your results with your earlier answers.
format only. This manual,
Then, answer the additional questions. however, contains a variety of
1. Check any statement that is correct (there may be more than one question formats to help you
correct statement): understand the content, such
When selling to another dealer: as activities, assignments,
multiple-choice questions,
a) Selling dealers must disclose previous use as a taxi, police vehicle, etc.
true-false questions and
b) Selling dealers must disclose damage repairs in excess of $3,000
fill-in-the-blank questions.
c) Selling dealers must disclose if the vehicle has two or more adjacent
panels (that are not bumper panels) that have been replaced
d) Selling dealers are not required to make disclosures in
wholesale transactions
2. Are the requirements for the sale or lease of a vehicle to another dealer in
the MVDA the General Regulations or the Code of Ethics Regulations?
3. Provide two potential facts related to a vehicles history (not including the
examples given in question 1) that must be disclosed in dealer-to-dealer
sales and leases.
4. True or False: In dealer-to-dealer transactions, the following disclosure is
not required as it is for retail transactions only – any fact about the vehicle
that affects the structural or mechanical quality or performance of the
Refer to Appendix 1 for the
vehicle that, if disclosed, could reasonably be expected to influence the
correct answers. Review the
decision of a reasonable buyer or lessee to buy or lease the vehicle.
relevant section of the
5. When selling to another dealer, what must the selling dealer do if he/she
cannot determine the distance the vehicle has been driven? chapter for any question
6. Check any statement that is correct: you answered incorrectly.
A contract for sale or lease of a vehicle between dealers:
a) Must disclose specific information to comply with the Code of
Ethics Regulations
b) Must disclose exactly the same information required in the sale of a
vehicle to a purchaser who is a consumer
c) Must disclose a statement as to whether CAMVAP is available
d) Is subject to the provisions of the Consumer Protection Act

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