OMVIC Certification: Extended warranties, service plans and the Compensation Fund

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1. Which item must a service plan contract state?

   1. The make of oil filter used at each service visit
   2. Where the vehicle can be serviced under the plan
   3. The service manager's licence number and hourly wage
   4. The dealer's profit on the plan, initialled by the buyer
   Show answer and explanation

   Correct answer: Where the vehicle can be serviced under the plan

   A service plan contract lists the goods and services, term, deductible, price and fees, beneficiary obligations, where servicing can be done, transferability and whether it is insured.

   Based on: O. Reg. 333/08, s. 48(2), para. 14; checked 2026-10-24

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2. After the parties enter an extended warranty contract, what is the dealer’s deadline to forward the required documents and customer payments?

   1. Thirty days
   2. Seven days
   3. Ninety days
   4. Two days
   Show answer and explanation

   Correct answer: Thirty days

   Section 47(7)(c) currently allows 30 days after the parties enter the extended warranty contract to provide the warranty seller with all contract documents, all customer payments received, and any condition/distance statement the dealer holds. The separate service-plan deadline under section 48(6)(c) remains seven days.

   Based on: O. Reg. 333/08, s. 47(7)(c); s. 48(6)(c); checked 2026-10-24

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3. Which situation may support a Fund claim, subject to its consumer eligibility, evidence and procedure rules?

   1. The car needed new brake pads six months after the purchase
   2. The dealer took a deposit, never delivered the car and will not refund
   3. The consumer's own lender repossessed the car for missed payments
   4. The consumer changed their mind after signing and wants out of the deal
   Show answer and explanation

   Correct answer: The dealer took a deposit, never delivered the car and will not refund

   For this deposit ground, the contracted delivery period must have passed without the vehicle or an acceptable alternative. The consumer must demand a refund and the dealer must refuse without legal justification or be unable to refund because of bankruptcy or insolvency. Eligibility, written notice and Board determination still matter; a deposit dispute is not an automatic payout.

   Based on: O. Reg. 333/08, s. 79(1), (3) para. 6; ss. 80, 82; checked 2026-10-24

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4. A third-party company, not the selling dealer, offers an uninsured warranty. What letter of credit is required?

   1. $500,000
   2. $100,000
   3. $45,000
   4. $1,000,000
   Show answer and explanation

   Correct answer: $500,000

   The prescribed irrevocable letter of credit is $500,000 when the warranty seller is not the dealer that sold or leased the vehicle. The $100,000 amount applies to that selling or leasing dealer. These security amounts differ from the ordinary Fund compensation cap and its court-cost/interest rules.

   Based on: O. Reg. 333/08, s. 47(1)(b), subpara. ii; s. 83(5)–(6); checked 2026-10-24

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5. Which detail must an extended warranty contract include?

   1. The salesperson's commission on the warranty
   2. The warranty company's annual profit figures for the last three years
   3. Any limits on an individual claim and on total liability
   4. The names of other customers who bought it
   Show answer and explanation

   Correct answer: Any limits on an individual claim and on total liability

   Section 47(4) requires any individual-claim and total-liability limits, covered components, start/end conditions, price, deductibles, obligations, transfer terms and insurance status. How it extends a manufacturer’s warranty is required if the warranty relates to one; a limit is not invented when none exists.

   Based on: O. Reg. 333/08, s. 47(4), paras. 4–5; checked 2026-10-24

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6. A dealer sells an extended warranty to a consumer. How must the warranty be backed?

   1. Guaranteed by the dealer owner's personal bank account and line of credit
   2. Approved in writing by the manufacturer of the vehicle
   3. Registered with the Ministry of Transportation before sale
   4. Licensed-insurer protection or the prescribed irrevocable letter of credit
   Show answer and explanation

   Correct answer: Licensed-insurer protection or the prescribed irrevocable letter of credit

   Section 47(1) requires performance insurance from an insurer licensed under the Insurance Act or the prescribed irrevocable letter of credit to the Fund’s trustee. If the warranty seller goes out of business, a facilitating dealer can be liable for a covered claim amount not paid from that security under section 47(3). This is not a promise that every warranty claim is payable by the Fund.

   Based on: O. Reg. 333/08, s. 47(1)–(3); checked 2026-10-24

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7. Which agreement meets the General regulation’s definition of a service plan?

   1. One covering only component repair costs under an extended warranty
   2. One sold before delivery to provide goods or services to alter or maintain the vehicle
   3. One covering only loan payments if the borrower becomes unemployed
   4. One replacing the vehicle after a theft under an auto insurance policy
   Show answer and explanation

   Correct answer: One sold before delivery to provide goods or services to alter or maintain the vehicle

   A statutory service plan is sold before the vehicle is delivered and supplies goods or services to alter or maintain it. The work may occur before or after delivery. An ordinary maintenance agreement bought only after delivery does not meet this particular definition simply because it covers maintenance.

   Based on: O. Reg. 333/08, s. 1, definition of service plan; checked 2026-10-24

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8. Excluding separately eligible court-awarded costs and interest, what is the Fund’s total compensation cap for one claim?

   1. $25,000
   2. $45,000
   3. $100,000
   4. $50,000
   Show answer and explanation

   Correct answer: $45,000

   Section 83(5) caps total compensation, including an interim payment, at $45,000. Section 83(6) excludes court-awarded costs and interest from that calculation; the eligibility limits in sections 83(1)–(4) still apply. The Fund does not pay punitive damages or interest on them.

   Based on: O. Reg. 333/08, s. 83(1)–(6); checked 2026-10-24

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9. Under the MVDA, what is an extended warranty?

   1. An insurance policy that replaces the car if it is stolen
   2. A promise that the vehicle will pass its next annual safety inspection
   3. A plan that covers routine oil changes and tire rotations
   4. An agreement to pay component repair or replacement costs, including labour
   Show answer and explanation

   Correct answer: An agreement to pay component repair or replacement costs, including labour

   The General regulation defines an extended warranty as an agreement by a non-exempt person to pay component repair or replacement costs, including labour, in addition to a warranty supplied or implied by law. It need not begin only when a manufacturer’s warranty expires.

   Based on: O. Reg. 333/08, s. 1, definition of extended warranty; checked 2026-10-24

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10. A dealer’s creditor lawfully seizes a consumer’s purchased car and says it will not be returned. Can this support a Fund claim?

    1. No, the Fund only ever pays when a dealer is convicted of fraud
    2. No, lien problems are always the buyer's responsibility
    3. Yes, a lawful seizure by the dealer's creditor can support a claim
    4. Yes, but only if the buyer is a corporation
    Show answer and explanation

    Correct answer: Yes, a lawful seizure by the dealer's creditor can support a claim

    Section 79(3), paragraph 4 covers lawful seizure by a creditor other than the customer’s creditor where the vehicle will not be returned. The dealer must have been registered at the trade and the remaining consumer eligibility and procedure requirements still apply. The buyer’s own missed loan payments are a different case.

    Based on: O. Reg. 333/08, s. 79(1); s. 79(3), para. 4; checked 2026-10-24

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11. What happens if the Fund is expected to fall below $3,000,000?

    1. OMVIC stops accepting consumer claims until next year
    2. Salespeople pay an emergency levy with their renewals
    3. The board can declare a shortfall that dealers must cover
    4. The Ministry automatically tops it up from tax revenue
    Show answer and explanation

    Correct answer: The board can declare a shortfall that dealers must cover

    The Board may declare a shortfall if the Fund is or is anticipated to be below $3 million. General dealers, brokers and lease finance dealers then fall under the prescribed assessment rules; the notice sets the amount, payable within 60 days. This is not an automatic taxpayer top-up or a salesperson renewal fee.

    Based on: O. Reg. 333/08, s. 75(4)–(7); checked 2026-10-24

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12. The dealer that sold the car also sells its own uninsured warranty. What letter of credit must it give the Fund?

    1. $250,000
    2. $100,000
    3. $500,000
    4. $50,000
    Show answer and explanation

    Correct answer: $100,000

    The irrevocable letter of credit is $100,000 when the warranty seller is the dealer that sold or leased the vehicle, and $500,000 in any other case.

    Based on: O. Reg. 333/08, s. 47(1)(b), subpara. i; checked 2026-10-24

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13. How do the prescribed initial Fund contributions apply to general dealers and brokers with several authorized locations?

    1. One contribution covers every present and future location
    2. A contribution is required for each authorized trading location
    3. Only the salesperson at the head office must contribute
    4. Each consumer must make the initial registration contribution
    Show answer and explanation

    Correct answer: A contribution is required for each authorized trading location

    Sections 75(2)–(3) require general dealers and brokers to contribute for each authorized place, including an added place. Lease finance dealers also have an initial contribution, without that per-location wording. This question concerns initial contributions, not later shortfall assessments.

    Based on: O. Reg. 333/08, s. 75(2)–(3); checked 2026-10-24

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14. The Fund pays a consumer's claim against a dealer. What can happen to the dealer?

    1. It is barred from selling used vehicles for one year
    2. It may have to repay the Fund or risk losing its registration
    3. It pays a fixed penalty of $300 and the matter ends
    4. Nothing, because the Fund exists to absorb dealer losses
    Show answer and explanation

    Correct answer: It may have to repay the Fund or risk losing its registration

    MVDA section 42 allows prescribed reimbursement duties for a dealer or former dealer. Default without accepted repayment arrangements, or non-compliance with those arrangements, can support refusal to renew subject to the statutory process. Payment of a claim does not automatically revoke registration or erase the dealer’s debt.

    Based on: Motor Vehicle Dealers Act, 2002, s. 42(6), (8)–(9); checked 2026-10-24

    Official reference ↗