You have little recourse if that bargain vehicle turns out to be hot, or has structural damage

Ron Loveys
tada president

Nov 28, 2009

In the past eight years, the used- vehicle market in Canada has grown from 56.6 per cent of overall sales to 61.3 per cent, according to DesRosiers Automotive Consultants.

This increased demand has opened up the market for unlicensed sellers, known as “curbsiders.”

Curbsiders are individuals who pose as legitimate car sellers, but who operate outside the law. They use various strategies to deceive people into buying vehicles that are stolen, damaged or defective.

Curbsiders advertise their vehicles in automotive publications and classified sections of newspapers. By all appearances, the individuals who place these ads appear as friendly, law-abiding citizens. But they – and the vehicles they sell – are not what they appear to be.

In fact, many of these vehicles offered for sale will have suffered major structural damage or have had their odometers rolled back to make them appear newer, thus commanding higher prices.

Some of the vehicles are stolen and are not legitimately owned by the seller. This sometimes leads to cases where people buy what they believe to be a registered vehicle, only to discover, after the fact, that the car has been stolen.

In this case, the purchaser would have to relinquish his car, but would not be compensated for any financial loss. The curbsider has basically taken the purchaser’s money and ran, and good luck trying to locate him again.

What is the most effective way to avoid falling victim to a curbsider? The safest route is to buy from a registered new (or used) car dealer. If you’re unsure about a dealership’s status, contact the Ontario Motor Vehicle Industry Council.

OMVIC is the self-regulating body that oversees and enforces the Motor Vehicle Dealers Act on behalf of the government. OMVIC’s website (www.omvic.on.ca) is an excellent source of information about curbsiders and their illegal activities.

When you purchase from a registered car dealer, you are afforded certain “legislated” protections that are not available when you buy privately.

Registered dealers conduct extensive background checks on all vehicles offered for sale. They invest time and money to make sure that vehicles are mechanically sound and safe to drive.

If you plan on purchasing a vehicle privately, however, it’s a case of buyer beware. Always ask for a Used Vehicle Information Package. By law, the seller must provide it.

The UVIP is issued by the transportation ministry and shows the ownership history of the vehicle (current and past owners in Ontario), as well as any liens the vehicle might have against it.

Beware of vendors who say things such as, “I’m leaving the country and I need the money,” or “This vehicle belonged to my aunt who recently passed away.” These phrases are warning flags and suggest shady activity.

Always have the vehicle checked by a trusted auto technician. A car may look great on the outside, but hidden problems could result in costly repairs.

The Toronto Automobile Dealers Association – a strong advocate of consumer awareness about curbsiders – recently helped to score a victory of sorts against them.

Last week, Ontario Finance Minister Dwight Duncan announced that the proposed harmonized sales tax (HST) will soon apply to privately sold vehicles. Currently, sales tax is collected at an unfair rate, depending on where the vehicle was purchased (13 per cent PST / GST if purchased at a registered dealership, but only the 8 per cent PST if purchased privately).

The new HST will level the playing field among registered dealers and private sellers. It is our hope that the tax advantage that curbsiders currently enjoy will soon disappear and lead to fewer sales to unsuspecting consumers.

This column represents the views

of TADA. Email president@tada.ca

or visit tada.ca.