BC VSA Salesperson: Motor Dealer Customer Compensation Fund

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1. Who can apply for compensation from the Fund?

   1. A business that bought a fleet of trucks for its own staff
   2. A dealer that lost money on a wholesale purchase
   3. Anyone who bought a car from a private seller in BC
   4. An individual buying a primarily personal-use vehicle from a registered dealer who suffers an eligible loss
   Show answer and explanation

   Correct answer: An individual buying a primarily personal-use vehicle from a registered dealer who suffers an eligible loss

   Section 4 covers individuals in the listed vehicle, warranty/service-plan and consignment transactions with registered dealers, subject to eligible loss and other requirements. Eligibility to apply is not a promise of payment.

   Based on: Compensation Fund Regulation ss. 4–7; official source checked 2026-10-24

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2. What must a claimant do before applying to the Fund?

   1. Wait until the dealer's registration has been cancelled
   2. Report the dealer to the police and get a file number
   3. Sue the dealer in Supreme Court and win a judgment first
   4. Make a written demand on the dealer within 4 years of the deal
   Show answer and explanation

   Correct answer: Make a written demand on the dealer within 4 years of the deal

   The claimant must first make a written demand on the dealer within 4 years after the transaction, and the dealer must have refused or failed to honour it within 30 days.

   Based on: Compensation Fund Regulation ss. 6; official source checked 2026-10-24

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3. How final is a decision of the Compensation Fund Board?

   1. It can be appealed to the VSA's board of directors
   2. It is advice that the registrar may ignore
   3. Final, reviewable in court only on law or jurisdiction
   4. It must be approved by a Provincial Court judge
   Show answer and explanation

   Correct answer: Final, reviewable in court only on law or jurisdiction

   The Board’s within-jurisdiction decisions are final subject to the statutory court-review exception for law or excess of jurisdiction. Sections 18.1–18.2 separately permit reconsideration; a party’s request normally has a 30-day limit. These are different processes, not a guarantee that any decision is immune from challenge.

   Based on: Motor Dealer Act ss. 16, 18.1–18.2; official source checked 2026-10-24

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4. After making the demand on the dealer, how long does the claimant normally have to apply to the Fund?

   1. 30 business days
   2. 1 year
   3. 120 days
   4. 4 years
   Show answer and explanation

   Correct answer: 120 days

   An application must be made within 120 days after the demand, unless the registrar accepts that extenuating circumstances prevented it.

   Based on: Compensation Fund Regulation ss. 8.1; official source checked 2026-10-24

   Official reference ↗

5. What limit applies to additional contributions the registrar can demand in one year?

   1. No more than 10 per cent of the dealer's sales
   2. No more than the annual contribution itself
   3. There is no limit on additional contributions
   4. No more than twice the annual contribution
   Show answer and explanation

   Correct answer: No more than twice the annual contribution

   The registrar may require additional contributions to keep the fund sufficient, but not more than twice the annual contribution in any one year; dealers pay within 21 days of notice.

   Based on: Compensation Fund Regulation ss. 3; official source checked 2026-10-24

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6. A buyer's car is repossessed by a bank because the dealer never cleared an old loan on it. Is this an eligible loss?

   1. Yes, failure to give clear title free of undisclosed charges
   2. No, the Fund only ever covers deposits and down payments
   3. Yes, but only if the buyer is a registered business
   4. No, title problems are always the buyer's own risk
   Show answer and explanation

   Correct answer: Yes, failure to give clear title free of undisclosed charges

   The dealer's failure to provide clear title, or to ensure the vehicle was free of an undisclosed third-party charge, is an eligible loss.

   Based on: Compensation Fund Regulation ss. 5(1)(a)(iv); official source checked 2026-10-24

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7. Which claim is NOT eligible for compensation?

   1. A claim based on the poor quality of the vehicle received
   2. A trade-in the dealer kept without delivering
   3. A consigned car the dealer did not return
   4. A deposit not refunded after the dealer closed down for good
   Show answer and explanation

   Correct answer: A claim based on the poor quality of the vehicle received

   A claim is not eligible if it is based on the cost, value or quality of the vehicle received, if a warranty loss can be recovered from the warranty's insurer, or for the business-expense share of a vehicle's use.

   Based on: Compensation Fund Regulation ss. 7; official source checked 2026-10-24

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8. What annual contribution does each dealer pay to the Compensation Fund?

   1. $300, paid when applying for or renewing registration
   2. $1,000 a year, paid only by dealers selling new vehicles
   3. $10 for every vehicle the dealer sells or leases
   4. Nothing; only salespeople contribute to the Fund
   Show answer and explanation

   Correct answer: $300, paid when applying for or renewing registration

   Every motor dealer pays an annual $300 contribution when applying for or renewing registration. The $10 per-vehicle charge is the separate VSA transaction levy.

   Based on: Compensation Fund Regulation ss. 2(1); official source checked 2026-10-24

   Official reference ↗

9. When may the registrar waive a dealer's annual Fund contribution?

   1. At the registrar’s discretion when all statutory payment, fund-sufficiency and risk conditions are met
   2. After the dealer's first year without complaints
   3. Only if the dealer sells fewer than 20 vehicles in a year
   4. Whenever the dealer asks in writing before renewal
   Show answer and explanation

   Correct answer: At the registrar’s discretion when all statutory payment, fund-sufficiency and risk conditions are met

   The dealer must have made full $300 contributions for three consecutive years and complied with additional contribution calls. The waiver must not put fund sufficiency in doubt, and the registrar must consider the dealer not a significant risk. Three years alone does not guarantee a waiver.

   Based on: Compensation Fund Regulation s. 2(3); official source checked 2026-10-24

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10. Which is a listed potentially eligible Fund loss, subject to the other claim requirements?

    1. Lost wages while the car was in for warranty repairs
    2. Repair costs because the car turned out to be unreliable
    3. A deposit the dealer cannot return because it went bankrupt
    4. The difference between the price paid and market value
    Show answer and explanation

    Correct answer: A deposit the dealer cannot return because it went bankrupt

    Bankruptcy or similar dealer failure causing loss of a deposit is listed. Refusal without lawful justification, dishonesty and undisclosed title charges are other specified grounds. Cost, value or quality complaints about a received vehicle are excluded; approval is not automatic.

    Based on: Compensation Fund Regulation ss. 5–7; official source checked 2026-10-24

    Official reference ↗

11. The Fund pays a claim caused by a dealer. What must the dealer do?

    1. Pay only half, since the Fund shares the risk
    2. Repay it at its next annual renewal, without interest
    3. Repay the claim and determined investigation costs within 30 days of receiving notice, or a longer time allowed by the registrar
    4. Nothing, because the Fund exists to absorb all dealer losses
    Show answer and explanation

    Correct answer: Repay the claim and determined investigation costs within 30 days of receiving notice, or a longer time allowed by the registrar

    The notice identifies the claim payment and any investigation costs determined by the Board. Repayment is due within 30 days of receipt unless the registrar specifies a longer period. Non-payment can lead to cancellation of dealer registration.

    Based on: Motor Dealer Act s. 24; official source checked 2026-10-24

    Official reference ↗

12. What is the maximum compensation the Motor Dealer Customer Compensation Fund pays for a loss?

    1. $10,000
    2. $50,000
    3. $45,000
    4. $20,000
    Show answer and explanation

    Correct answer: $20,000

    The maximum compensation payable for a loss is $20,000.

    Based on: Compensation Fund Regulation ss. 9; official source checked 2026-10-24

    Official reference ↗