Legislation and regulation concerning vehicle sales in British Columbia

The Motor Vehicle Sales Authority concluded an exhaustive two-year review of all legislation and regulation governing the sale of motor vehicles in British Columbia in May of 2006. Legislation at all levels of government - often duplicative and conflicting - impacts upon business practices.

Research focused on advertising, vehicle inspections and histories, odometer rollbacks, contracts and related issues. The Legislation Review Committee (LRC) consisted of representatives from industry, the public-at-large, ICBC, Autoplan agents and the British Columbia Automobile Association. A total of 15 organizations representing both consumers and industry were asked to make submissions.

The complete 42-page report of the LRC is now available. The preponderance of recommendations concern uncontroversial updates of definitions, language and terminology to more accurately reflect modern realities and business practices.

Following are some of the more important proposals:

1. All wholesalers, brokers, auctioneers, importers, exporters, bailiffs, collection agents and manufacturers doing business in British Columbia and who sell motor vehicles are to be licensed.
   
   
2. Expand the definition of motor vehicle to include all types of recreational vehicles:
   • the recommendation is to include campers in the definition of motor vehicle to allow customer compensation fund claims for campers when they are sold by a registered motor dealer.
     
     
3. Several changes are proposed concerning the availability of the Motor Dealer Customer Compensation Fund:
   
   
   • elevation of the maximum claim to $50,000 from $20,000.
   • clarification of language concerning what is covered by the fund, particularly the addition of the phrase "maintenance plan," to existing coverage with respect to extended warranty and service plans.
   • it is proposed that the current statute, which gives claimants two years to file, be changed to require notification within 90 days of a problem occurring, and four years thereafter to file a claim.
   • the Customer Compensation Fund's mandate should be expanded to include financing and managing of an "optional" dispute resolution process.
     
     
4. Improved language to ensure that motor dealers comply with "every advertisement or written representation."
   
   
5. The committee has recommended regulated documentation for all sales, lease and purchase agreements throughout the industry, and that purchasers be given a duplicate copy of these documents at the time of the sale. Similar recommendations for standardization of procedures and documentation concerning consignment agreements will apply as well.
   
   
6. Mandatory use of official contract forms by everyone in the industry, as well as specific rules regarding deposits, partial payments and down payments.
   
   
7. Financial agents and lenders not directly involved in the sale of a vehicle continue to be exempted under the current legislation, but only if they are "licensed under a federal or provincial statute" to ensure that this exemption is not abused.
   
   
8. Proper maintenance and supervision of trust funds in consignment situations has frequently caused difficulties. It is proposed that references to trust accounts be removed, but that those engaged in consignment sales should be required to post securities, such as letters of credit, in the amount of $75,000 for recreation vehicle dealers and $20,000 for auto dealers.
   

Below is a link to the full report. Instructions for submitting your comments are outlined on page 2 of the report.

• Consultation Document (pdf file)
• News Release (pdf file)