The Motor Dealer Customer Compensation Fund provides compensation to consumers who have lost money because a motor dealer has either gone out of business or has failed to meet certain legal obligations. The money in the Fund comes from contributions made by all licensed motor dealers in BC. The Fund is the last resort for dealing with a dispute with a dealer and only some types of losses are covered by the Fund.
Frequently Asked Questions
1. What is the Motor Dealer Customer Compensation Fund?
2. Who decides if compensation will be awarded?
3. How much can the Fund pay for my loss?
4. Do I need a lawyer to represent me?
5. Does it cost me anything to apply for compensation?
6. How long does an application for compensation take to be decided?
7. Who can I contact for more information?
Eligibility for Compensation.
8. Who is covered by the Fund?
9. What types of losses are covered by the Fund?
- Purchase or lease of a vehicle.
- An unpaid lien on a vehicle.
- Purchase of an extended warranty or service plan.
- Vehicle on consignment with a dealer
10. What can I do if I am not covered by the Fund?
Applying for Compensation.
11. What should I do before I apply for compensation?
12. How do I apply for compensation?
13. Is there a time limit to apply for compensation?
Hearing of an Application.
14. Do I need to attend the hearing?
15. What do I need to do to prepare for a hearing?
16. What happens at a hearing?
17. How do I find out about the results of a hearing?
18. What if I don't agree with the Board's decision?
If you have general questions about the Motor Dealer Customer Compensation Fund, you can contact Consumer Services at the Motor Vehicle Sales Authority for more information:
Motor Vehicle Sales Authority of BC
Suite 208 – 5455 152nd Street,
Surrey, BC V3S 5A5
Tel: 604.575.7255 (Lower Mainland)
Toll free: 1. 877.294.9889
Fax: 604.574.5886
E-mail:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Frequently Asked Questions
1. What is the Motor Dealer Customer Compensation Fund?
The Motor Dealer Customer Compensation Fund provides compensation to consumers who have lost money because a motor dealer has either gone out of business or has failed to meet certain legal obligations. The money in the Fund comes from contributions made by all licensed motor dealers in BC.
The BC Motor Dealer Act and Motor Dealer Customer Compensation Fund Regulation control how the Fund operates, what losses are eligible for compensation and how compensation decisions are made.
The Fund is the last resort for dealing with a dispute with a dealer and only some types of losses are covered by the Fund. For more information, see What should I do before applying for compensation?
2. Who decides if compensation will be awarded?
The Motor Dealer Customer Compensation Fund Board decides whether or not a consumer who has made a claim will be awarded compensation. Operating as an independent administrative tribunal, the Board is a panel of five people, including representatives of motor dealers and the public, who have been appointed to make these decisions.
If you want to learn more about administrative law, administrative tribunals and tribunal hearings, educational videos and other information is available from the Justice Education Society's Guide to Administrative Law in BC at http://www.adminlawbc.ca.
3. How much can the Fund pay for my loss?
If the Board finds that your loss is eligible for compensation, it can award up to $20,000 in compensation. This is the maximum amount the Board is allowed to award under the law. Even if your loss was more than $20,000, the Board cannot award more than that amount.
4. Do I need a lawyer to represent me?
No, you do not need a lawyer to represent you when applying for compensation. You may wish to consult a lawyer to determine if you have any other legal remedies. Note that there may be time limits that apply to your taking any legal action and you should take steps to understand your rights as soon as possible.
5. Does it cost me anything to apply for compensation?
No, you do not have to pay any fees to apply for compensation from the Fund.
6. How long does an application for compensation take to be decided?
The time required to process and decide on an application for compensation depends on the specific circumstances. Typically, it takes three to six months and can be longer in some circumstances.
7. Who can I contact for more information?
If you have general questions about the Motor Dealer Customer Compensation Fund, you can contact Consumer Services at the Motor Vehicle Sales Authority for more information:
Motor Vehicle Sales Authority of BC
Suite 208 – 5455
152nd Street, Surrey, BC V3S 5A5
Tel: 604.575-7255 (Lower Mainland)
Toll free: 1. 877.294.9889
Fax: 604.574.5886
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
Eligibility for Compensation
8. Who is covered by the Fund?
To be eligible for compensation from the Fund, you must meet all of the following requirements:
- • You must be an individual, not a corporation, partnership or any other kind of business.
- • You must have entered into an agreement with a registered motor dealer in BC to do one of the following:
- - buy or lease a vehicle
- - buy an extended warranty or service plan for a vehicle, or
- - consign your vehicle for sale by a dealer.
- • If your agreement was to buy or lease a vehicle or buy an extended warranty or service plan for a vehicle, you must have used (or intended to use) the vehicle primarily for personal or family purposes and not primarily for business purposes. This means that more than half of your use of the vehicle (or intended use) must be for personal or family purposes.
- • The loss you suffered must be a type of loss covered by the Fund (see What types of losses are covered by the Fund?).
- • You must have made a demand to the dealer to pay the loss, which the dealer refused or failed to pay.
- • Your application for compensation must be made within 2 years of your demand to the dealer to pay the loss.
9. What types of losses are covered by the Fund?
If you meet the eligibility requirements (see Who is covered by the Fund?), you may be covered by the Fund if you experienced one of the following types of losses:
Purchase or lease of a vehicle
In this case, you paid money or traded-in a vehicle to a dealer as part of an agreement to buy or lease a vehicle. However, you believe that the money you paid or the vehicle you traded-in should be returned to you.
Your loss of the money paid or the trade-in vehicle may be covered if one of the following things happened:
- • The dealer refused to deliver the vehicle that you agreed to buy or lease, and the dealer had no legal right to keep the money you paid.
- • The dealer was unable to deliver the vehicle that you agreed to buy or lease because the dealer went out of business, and the dealer had no legal right to keep the money you paid.
- • The loss of the money or the trade-in vehicle was caused by the dealer's dishonest or illegal conduct.
An unpaid lien on a vehicle
In this case, you bought or leased a vehicle that had an unpaid lien on it. The cost of paying the lien may be covered if:
- • In order to keep the vehicle, you had to pay an amount to clear the title of the vehicle of any charge or encumbrance in favour of a third party; or
- • The vehicle you purchased was subsequently seized by a third party and not returned to you.
Purchase of an extended warranty or service plan
In this case, you bought an extended warranty or a service plan on a vehicle but later you were unable to use some or all of the warranty or plan. Your loss may be covered if this happened because the motor dealer went out of business or because of some other failure by the dealer.
If your loss is covered, you may be compensated for the lost value of the extended warranty or service plan. The lost value means the amount of money that you paid to buy the part of the warranty or plan that was lost. For example, if you bought a 5-year warranty for $1000 and the dealer providing the warranty coverage went out of business after 2 years, the amount of compensation would be calculated as 3 years of lost warranty at $200 per year = $600.
Please note:
- • You may only be compensated for the part of the warranty that you lost. You cannot be compensated for the actual cost of any repairs or service that might have been paid for if the warranty or plan was still in effect.
- • The Fund does not cover a loss related to an extended warranty or service plan if an insurer of the warranty or plan is responsible for covering the loss. You should find out if the warranty or plan is insured. If so, you should contact the insurer.
- • Disputes with a dealer about what should be covered under an extended warranty or service plan are not covered by the Fund.
Vehicle on consignment with a dealer
In this case, you consigned a vehicle for sale by a dealer and the dealer did not return your vehicle as agreed (if unsold) or the dealer did not deliver the money from the sale of the vehicle to you.
Your loss of the value of the consigned vehicle or the money from the sale of the vehicle may be covered if one of the following things happened:
- • The dealer refused to return the unsold vehicle or deliver the money from the sale of the vehicle, and the dealer had no legal right to keep the consigned vehicle or the money from the sale of the vehicle.
- • The dealer went out of business and was unable to return the unsold vehicle or deliver the money from the sale of the vehicle, and the dealer had no legal right to keep the consigned vehicle or the money from the sale of the vehicle.
- • The loss of the consigned vehicle or the value of the consigned vehicle was caused by the dealer's dishonest or illegal conduct.
10. What can I do if I am not covered by the Fund?
Where the dealer remains in business, you should try to resolve the matter with the dealer's sales manager, general manager or the owner. If the matter cannot be resolved, you may file a complaint with the Motor Vehicle Sales Authority who can try to help resolve the matter.
Whether or not the dealer is still in business, you may also wish to consult a lawyer to determine if you have any other legal remedies. Note that there may time limits that apply to your taking any legal action and you should take steps to understand your rights as soon as possible.
Applying for Compensation
11. What should I do before I apply for compensation?
The Compensation Fund is intended to be a last resort for consumers who have suffered a loss because a motor dealer has gone out of business or has failed to meet certain legal obligations. Only specific types of losses are covered (see What types of losses are covered by the Fund?).
Where the dealer remains in business, you should try to resolve the matter with the dealer's sales manager, general manager or the owner. If the matter cannot be resolved, you may file a complaint with the Motor Vehicle Sales Authority who can try to help resolve the matter.
You may also wish to consult a lawyer to determine if you have any other legal remedies. Note that there may be time limits that apply to your taking any legal action and you should take steps to understand your rights as soon as possible.
12. How do I apply for compensation?
The applications forms have checklists to help you in filing your application.
If you cannot print the online form or if you have questions, you can contact Consumer Services at the Motor Vehicle Sales Authority:
Motor Vehicle Sales Authority of BC
Suite 208 – 5455 152nd Street,
Surrey, BC V3S 5A5
Tel: 604.575-7255 (Lower Mainland)
Toll free: 1.877.294.9889
Fax: 604.574.5886
E-mail:
This e-mail address is being protected from spambots. You need JavaScript enabled to view it
If you would like general information on how to prepare a written submission to an administrative tribunal, see the Justice Education Society's Guide to Administrative Law in BC at http://www.adminlawbc.ca. You can find a short educational video on written submissions and other useful information about administrative tribunals.
13. Is there a time limit to apply for compensation?
Yes, to be eligible for compensation you must apply within 2 years of the date that the dealer refused to pay your loss.
Hearing of an Application
14. Do I need to attend the hearing?
No, in most cases you will not need to attend the hearing of your application. In some cases, the Board may require an applicant and the dealer to attend the hearing, but this is rare.
15. What do I need to do to prepare for a hearing?
To prepare for a hearing, you need to make sure that your application form and any supporting documents are complete.
Prior to the hearing, you will receive a copy of any material that the Board will consider at the hearing. This may include the dealer's written response to your application and the results of an investigation or research if that has been done to assist the Board in making a decision. You should review these materials, and if necessary, you should send a written response within the time allowed for a response.
16. What happens at a hearing?
At a hearing, the Board reviews your application for compensation, the dealer's response, the results of an investigation or research that has been done to assist the Board, and any further responses submitted by you or the dealer.
The Board then applies the criteria contained in the Motor Dealer Act and the Motor Dealer Customer Compensation Fund Regulation to the facts of the case and determines if the claim is eligible for compensation and if so, the amount of compensation to be awarded.
Sometimes, the Board may adjourn the hearing of an application to a later date in order to obtain additional information required to make a decision.
17. How do I find out about the results of a hearing?
After the hearing, the Board will send a letter to you and the dealer, informing you about the decision and the reasons for the decision.
18. What if I don't agree with the Board's decision?
Under the law, a decision of the board is final. However, you have two options if you do not agree with the Board's decision.
Your first option is to request that the Board reconsider its decision. Under the law, the Board may, at its discretion, reconsider its own decision. Generally, the Board will only agree to reconsider a decision if you can provide new evidence that was not available to you before the hearing. The new evidence must also indicate that the Board's decision may be wrong or may have been made unfairly.
Your second option is to file an application in the Supreme Court of BC for a judicial review of the Board's decision. If you would like more information about judicial review see the Justice Education Society's Guide to Administrative Law in BC at http://www.adminlawbc.ca or talk to a lawyer.
