During an AMVIC inspection, inspectors will examine sample transactions from the previous three-year period, which must be made available to the inspector. Automotive business documents are reviewed thoroughly during an AMVIC inspection. Ensuring accuracy on your documents will protect the consumer, your salespeople and your business.
Lately, AMVIC inspectors have reported encountering inconsistencies and inaccurate numbers on business documents. The items often affected include vehicle price and trade-in value on the bill of sale, and Mechanical Fitness Assessment (MFA) issues, such as the assessment being dated after the bill of sale has been finalized.
Accurate bill of sale
Automotive businesses are required to create and maintain complete and accurate financial records (Consumer Protection Act, Section 132(1) and Automotive Business Regulation (ABR), Section 9). The bill of sale must accurately reflect the nature of the transaction. A bill of sale checklist is available on amvic.org to help your business adhere to the requirements.
Accurate trade-in value
On a bill of sale, the trade-in allowance must be incorporated into the cost of the purchase. This means that the total price of the trade-in vehicle must be clearly stated on the bill of sale. Inflating the vehicle price, adding fees or other products to account for negative equity is an unfair practice.
Section 31.2 (1)(o) of the ABR states that if the consumer is trading in another vehicle to the business in connection with the purchase of the vehicle, the bill of sale must include information about the vehicle being traded in and the value of the trade-in allowance incorporated into the cost of the purchase of the vehicle.
Automotive businesses must provide customers with a completed Mechanical Fitness Assessment (MFA) before entering into a sales agreement for any used vehicle—it’s the law. AMVIC inspectors have noted that businesses are sometimes dating and signing their MFA’s after the sale has been completed. AMVIC enforces the use of the MFA.
AMVIC developed an ABR plain language explainer document to provide industry with clear information on the 2018 update of the ABR legislation. These documents outline legal responsibilities regarding vehicle history information, bill of sale information and accurate MFA requirements.
Remember, automotive businesses have an obligation to create and maintain complete and accurate financial records, including a bill of sale that accurately reflects the nature of the transaction.