To legally sell used cars for profit in Ontario, you must register as a dealer with the Ontario Motor Vehicle Industry Council (OMVIC). The initial dealership registration is $699 CAD, and strict “all-in pricing” laws apply to every vehicle you advertise.
Selling vehicles for profit without a proper licence is known as “curbsiding” and is illegal in Ontario. If you want to start a used car dealership in Mississauga, Hamilton, Sudbury, or any other city in the province, you must comply with OMVIC regulations. This governing body exists to protect consumers and maintain a fair, ethical marketplace.
Becoming an OMVIC-registered dealer involves business structuring, zoning approvals, and educational courses. Navigating these commercial requirements can be tricky for first-time entrepreneurs. Using our directory to hire a local business lawyer can help you draft solid bills of sale and ensure your dealership operates completely above board. 🔍
Step-by-Step Process for Dealerships in Ontario
Setting up a dealership requires careful planning. You cannot simply sell cars out of your residential driveway. You must establish a professional retail presence and ensure every person selling cars for you is legally registered.
Step 1: Passing the Certification Course
Before applying, you and any salesperson you hire must pass the OMVIC Automotive Certification Course. This mandatory educational program is administered by Georgian College. It teaches you the rules of the Motor Vehicle Dealers Act (MVDA), advertising laws, and ethical business practices. 📚
Step 2: Securing a Commercially Zoned Lot
You must have a physical business location that meets local municipal zoning bylaws for automotive sales. Whether you are in Toronto or Ottawa, your lot must have a clear sign, a permanent office to store records securely, and space to display vehicles. You will need to provide proof of your lease and zoning approval to OMVIC.
Step 3: Submitting the OMVIC Application
Once your location is secured and you have passed the course, you must submit your dealer application. This involves background checks, providing copies of your corporate documents, and submitting your fee. Additionally, every individual salesperson working on your lot must submit their own salesperson registration application. 📄
Step 4: Strict Advertising and Disclosures
Once open, you must adhere to OMVIC’s strict “all-in pricing” rule. Any advertised price must include all fees, levies, and charges (except HST and Ministry licensing fees). Furthermore, you are legally required to disclose critical vehicle history, such as if a car was a daily rental, rebuilt, or involved in an accident causing over $3,000 CAD in damage.
How Much Does it Cost in Ontario?
Starting a dealership involves government registration fees on top of your standard commercial rent and inventory costs. Below is a breakdown of the regulatory fees to get started. 💰
| OMVIC Requirement | Estimated Cost (CAD) |
|---|---|
| Initial Dealer Registration Fee | $699 |
| Salesperson Registration Fee (per person) | $349 |
| OMVIC Certification Course (Georgian College) | $286.08 |
| Motor Vehicle Dealers Compensation Fund | $324 (one-time fee per dealer) |
How Long Does the Process Take?
Studying for and passing the Georgian College certification course generally takes a few weeks. Once you submit a complete application to OMVIC, processing background checks and reviewing your commercial lease typically takes 3 to 6 weeks. Securing your local municipal zoning approval is often the longest part of the journey.
Frequently Asked Questions (FAQ)
What exactly is “all-in pricing”?
In Ontario, all-in pricing means that if you advertise a car for $10,000, that price must include safety inspection fees, admin fees, and any other dealer charges. You cannot add hidden fees at the time of purchase; you can only add HST and the actual cost of government vehicle licensing.
What happens if I fail to disclose an accident?
Failing to make mandatory disclosures under the MVDA is a serious offence. Consumers may be entitled to cancel the contract within 90 days, and OMVIC can issue severe fines, suspend your licence, or permanently close your dealership.
Can I just flip a few cars a year without registering?
No. If you are buying and selling vehicles with the intent to make a profit, you are acting as a dealer. Curbsiding is illegal and individuals caught doing so face massive fines from the province.
Do I need a lawyer to set up a dealership?
While it is not strictly required to use a lawyer to fill out the OMVIC forms, a commercial lawyer is highly recommended. They will ensure your commercial lease allows automotive sales, structure your corporation properly, and draft legally sound consumer contracts.
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