Which loss on a car deal does the compensation fund cover?

Money lost on a trade with a registered dealer

Loss from defects covered by the factory warranty

Money lost on any sale, private sellers included

Inconvenience and distress from a vehicle purchase

Where a customer claims on the compensation fund, in what capacity must they have bought?

As a consumer rather than for a business

As a licensed broker acting for another

As a fleet buyer registering vehicles for a business

As a corporate buyer using the car commercially

A consumer buys from a curbsider and loses money. Can the consumer claim from the fund?

No, the seller was not registered at the time

Yes, but only once the curbsider is convicted

Yes, the fund covers any vehicle sale in Ontario

No, unless the loss is under $5,000

What does a dealer owe after the fund pays a claim resting on a final court judgment?

Repayment in full to the fund of the paid claim

Repayment only if the dealer becomes insolvent

Repayment capped at 10% of the paid claim

Repayment offset against next year's registration fees

Compensation Fund: practice quiz

Compensation Fund

7 questions. Pick an answer and the explanation reveals below it. Your score updates as you go.

Compensation Fund · 7 questions Free set

Question 1 of 7 Compensation Fund

Which loss on a car deal does the compensation fund cover?
- Loss from defects covered by the factory warranty
- Money lost on any sale, private sellers included
- Money lost on a trade with a registered dealer
- Inconvenience and distress from a vehicle purchase
O. Reg. 333/08 under the MVDA, 2002 · reproduced on this site Press to read the wording here

(1) A customer of a registered motor vehicle dealer is entitled to compensation from the Fund in respect of a claim for a pecuniary loss if,
(a) the claim arose from a trade in a motor vehicle between the customer and the dealer;
(b) the claim meets the requirements set out in a paragraph of subsection (3);
(c) at the time of the trade, the dealer was a registrant;
(d) the customer was acting in the trade as a consumer within the meaning of the Consumer Protection Act, 2002; and
(e) the customer has given the dealer, in accordance with section 37 of the Act, a written notice of demand for payment of the claim and the dealer has refused to pay the claim or is unable to do so. O. Reg. 333/08, s. 79 (1).

Read section 79 in full

Section 79(1) of O. Reg. 333/08 entitles a customer to compensation from the Fund only for a pecuniary loss arising from a trade between the customer and a registered dealer. Chapter 12 covers the compensation fund.
Question 2 of 7 Compensation Fund

What is the most the compensation fund pays on one claim?
- $15,000
- $25,000
- $45,000
- $100,000
O. Reg. 333/08 under the MVDA, 2002 · reproduced on this site Press to read the wording here

(5) No person or body, including the Board and the Trustee, shall pay compensation from the Fund to a customer in respect of a claim if the total compensation, including compensation under section 84, exceeds $45,000. O. Reg. 333/08, s. 83 (5).

Read section 83 in full

Section 83(5) of O. Reg. 333/08 caps total compensation per claim, including any interim payment made under section 84, at $45,000. Chapter 12 covers the compensation fund.
Question 3 of 7 Compensation Fund

Where a customer claims on the compensation fund, in what capacity must they have bought?
- As a licensed broker acting for another
- As a consumer rather than for a business
- As a fleet buyer registering vehicles for a business
- As a corporate buyer using the car commercially
O. Reg. 333/08 under the MVDA, 2002 · reproduced on this site Press to read the wording here

(1) A customer of a registered motor vehicle dealer is entitled to compensation from the Fund in respect of a claim for a pecuniary loss if,
(a) the claim arose from a trade in a motor vehicle between the customer and the dealer;
(b) the claim meets the requirements set out in a paragraph of subsection (3);
(c) at the time of the trade, the dealer was a registrant;
(d) the customer was acting in the trade as a consumer within the meaning of the Consumer Protection Act, 2002; and
(e) the customer has given the dealer, in accordance with section 37 of the Act, a written notice of demand for payment of the claim and the dealer has refused to pay the claim or is unable to do so. O. Reg. 333/08, s. 79 (1).

Read section 79 in full

Section 79(1)(d) of O. Reg. 333/08 requires the customer to have been acting in the trade as a consumer within the meaning of the Consumer Protection Act, 2002, which excludes purchases made in a business capacity. Chapter 12 covers the compensation fund.
Question 4 of 7 Compensation Fund

A consumer buys from a curbsider and loses money. Can the consumer claim from the fund?
- Yes, but only once the curbsider is convicted
- No, the seller was not registered at the time
- Yes, the fund covers any vehicle sale in Ontario
- No, unless the loss is under $5,000
O. Reg. 333/08 under the MVDA, 2002 · reproduced on this site Press to read the wording here

(1) A customer of a registered motor vehicle dealer is entitled to compensation from the Fund in respect of a claim for a pecuniary loss if,
(a) the claim arose from a trade in a motor vehicle between the customer and the dealer;
(b) the claim meets the requirements set out in a paragraph of subsection (3);
(c) at the time of the trade, the dealer was a registrant;
(d) the customer was acting in the trade as a consumer within the meaning of the Consumer Protection Act, 2002; and
(e) the customer has given the dealer, in accordance with section 37 of the Act, a written notice of demand for payment of the claim and the dealer has refused to pay the claim or is unable to do so. O. Reg. 333/08, s. 79 (1).

Read section 79 in full

Section 79(1)(c) of O. Reg. 333/08 requires that, at the time of the trade, the dealer was a registrant. Trades with curbsiders or other unregistered sellers fall outside the Fund's coverage. Chapter 12 covers the compensation fund.
Question 5 of 7 Compensation Fund

What does a dealer owe after the fund pays a claim resting on a final court judgment?
- Repayment only if the dealer becomes insolvent
- Repayment capped at 10% of the paid claim
- Repayment in full to the fund of the paid claim
- Repayment offset against next year's registration fees
O. Reg. 333/08 under the MVDA, 2002 · reproduced on this site Press to read the wording here

A registered motor vehicle dealer is required to reimburse the Fund for a claim paid to a customer of the dealer if,
(a) the claim arose from a trade in connection with which a court convicted the dealer of an offence and ordered the dealer to pay compensation or make restitution to the customer;
(b) the claim is described in paragraph 10 of subsection 79 (3);
(c) the dealer is insolvent; or
(d) the dealer has become a bankrupt or a winding-up order has been made or a receiver appointed in respect of the business of the dealer under the Bankruptcy and Insolvency Act (Canada), the Companies’ Creditors Arrangement Act (Canada) or the Winding-up and Restructuring Act (Canada). O. Reg. 333/08, s. 87.

Read section 87 in full

Section 87(b) of O. Reg. 333/08 requires the dealer to reimburse the Fund where the claim is described in paragraph 10 of section 79(3) (a final court judgment for compensation or restitution). Chapter 12 covers the compensation fund.
Question 6 of 7 Compensation Fund

Salespeople registering with OMVIC make no payment into the Motor Vehicle Dealers Compensation Fund.
- True
- False
Only the dealer classes pay into the Motor Vehicle Dealers Compensation Fund, because the charge falls on the business when its registration is granted and not on the people it hires. 12.03 covers who pays into the Fund.
Question 7 of 7 Compensation Fund

The fund is a dealer's insurance policy, so a dealer never pays back what it pays a customer.
- True
- False
The fund pays the customer, not the dealer, and the dealer can be made to pay the money back afterwards. Where it cannot be recovered the dealer's registration is at risk, which is the opposite of a policy that settles the matter. Chapter 12 states it in those terms.

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Compensation Fund

Which loss on a car deal does the compensation fund cover?

What is the most the compensation fund pays on one claim?

Where a customer claims on the compensation fund, in what capacity must they have bought?

A consumer buys from a curbsider and loses money. Can the consumer claim from the fund?

What does a dealer owe after the fund pays a claim resting on a final court judgment?

Salespeople registering with OMVIC make no payment into the Motor Vehicle Dealers Compensation Fund.

The fund is a dealer's insurance policy, so a dealer never pays back what it pays a customer.

7 questions here. 17 topics in all.