March 2023 |

An Ontario woman says she lost a $2,000 deposit after she bought a used car and then changed her mind.

“My husband was under the impression there was a cooling off period and through this experience we found out that there wasn’t,” Charnell Iweze of Brampton, ON told CTV News Toronto.

A “cooling-off period’ is a period of time following a purchase when the buyer may choose to cancel a purchase or contract, or return goods which have been supplied, and obtain a full refund.

If you ever sign a contract in your home to buy something and change your mind you have ten days to cancel the agreement for any reason.

But if you’re shopping for a new or used vehicle there is no cooling off period once an agreement is signed which many people don’t know

Iweze said she and her husband had been considering a move to Alberta and wanted to buy a vehicle here and have it shipped out west.

“We are exploring our options about moving to Alberta,” said Iweze.

Iweze found a 2009 Dodge Journey with a selling price of $6,800. She decided to buy it, signed a contract and put down a $2,000 deposit.

But after she put down the payment on the vehicle she said she found out the cost of shipping the SUV out west was going to be too expensive.

“We put down a deposit for the car, but we let them know we would like the deposit back and they said they are keeping the entire amount,” said Iweze.

Iweze said she was unaware she couldn’t cancel the contract, and didn’t know there is no cooling off period when it comes to motor vehicle contracts in Ontario.

“We do not have a cooling off period in this province for vehicle sales,” said Maureen Harquil, CEO of the Ontario Motor Vehicle industry Council (OMVIC).

OMVIC oversees car dealers in Ontario and once you sign a contract to buy a vehicle it is a legally binding agreement and the dealership may decide to keep your deposit if you don’t follow through with the purchase.

“That’s why when you’re going in to sign that bill of sale and purchase or lease a vehicle it says right on the contract all sales are final and it is in Ontario,” said Harquil.

Iweze feels there should be a cooling off period for vehicle sales and is still hopeful she’ll get all or some of her deposit returned.

A dealership may decide to return a deposit to show goodwill as maybe you’ll be their customer in the future, but they don’t have to.

The best advice is to be extremely careful signing any contract for a vehicle unless you’re absolutely sure you want it.

Under Ontario law, there is a 10 day cooling off period when you sign contracts in your home, pay in advance to join a fitness club or purchase a timeshare. There is also a two day cooling off period if you get a payday loan.

Foran, P. (2022, December 14). Ontario woman loses $2,000 deposit when she decides not to buy a car. Toronto. Retrieved March 31, 2023, from https://toronto.ctvnews.ca/ontario-woman-loses-2-000-deposit-when-she-decides-not-to-buy-a-car-1.6195218

Continuing to work with our friends and colleagues at the Used Car Dealers Association, DesRosiers Automotive Consultants once again reached out to the used vehicle retailer community. Over 400 UCDA members responded to our survey with both independent dealers and the used vehicle arms of franchised new vehicle dealers offering their perspectives on the used vehicle market in 2022 and in the months to come.

From a sales volume perspective, 2022 was not an easy year for used vehicle dealers with volume declines evident for both franchise and independent dealers. “Looking forward, many in the community are hopeful volumes will recover in light of improvements in supply alongside some moderate price declines” commented Andrew King, Managing Partner at DAC. He continued, “However whether the hopes for improved volumes will hold up in light of a weakening economy and improved new vehicle availability remains to be seen.”

UCDA members were surveyed regarding their sales volumes over the past four years to offer some context for the performances seen in 2022. For new vehicle dealers, used vehicle sales dropped in 2022 to just below pre-pandemic levels on average. For used vehicle dealers, sales saw a decrease in 2022 as well although the overall average of 160 units settled above the average of 157 cited for 2019.

When asked about their sales expectations for 2023, both franchised new vehicle dealers and independent used vehicle dealers were optimistic. New vehicle dealers cited an expectation of 308 units sold on average for this year, rising well above the levels of the last four years. Similarly, used vehicle dealers expect to sell an average of 186 units, also well above the past four years. Achieving such lofty goals may prove challenging given industry dynamics, but for now the optimism amongst respondents was widespread.

When asked about supply and the sourcing of vehicles—a major point of concern in recent years—dealers were somewhat split. The largest portion of both new and used vehicle dealers noted that sourcing of used vehicles improved in the second half of 2022, at 43.7% and 43.8% respectively. However, 38.3% of used vehicle dealers saw their situation get worse with 32.2% of new vehicle dealers noting the same thing.

To an extent, this split in opinion followed into the question of used vehicle prices. Franchised new vehicle dealers overwhelmingly noted that used vehicle prices decreased in the fourth quarter of 2022 with 66.7% of responses indicating as such. For independent used vehicle dealers, a slim majority of respondents noted prices increasing for used vehicle sales with 34.4% citing that prices decreased. On average between the two groups, 47.4% of responses indicated dropping prices, 38.6% indicated rising prices, and 14.0% indicated no change.

Newsletter: “Used Vehicle Update – Volumes Fall in 2022 as Sourcing Improves Marginally”, DesRosiers Automotive Consultants Inc. March 7th, 2023.

More information on these numbers can be found in the DesRosiers Automotive Reports published by DesRosiers Automotive Consultants Inc., or contact Daniel Azarov at daniel@desrosiers.ca.