The Consumer Protection Act (CPA), through the Internet Sales Contract Regulation (ISCR), allows vehicles to be sold online and remotely to consumers. It is important to note that regardless of the business model, the CPA, the Vehicle Inspection Regulation (VIR) and the Automotive Business Regulation (ABR) must be followed.
Shopping on the internet is a different consumer experience than shopping at a dealership or a car lot. The ISCR applies to Alberta residents or people purchasing goods or services from Alberta businesses that sell online. This regulation does not apply if a consumer is buying from a private individual.
Remote consumers can purchase or lease a motor vehicle from an AMVIC-licensed business without visiting the automotive business’s registered premises for the purpose of purchasing the vehicle. Online sales are permitted as long as the business has a brick and mortar location.
It is important that internet consumers are provided with all required information and it must be prominently displayed on the business’s website. There are different disclosure requirements in both the ABR and the ISCR, and all requirements must be complied with. For example, the ISCR requires disclosure of refund policies. The ABR is specific in requiring a Mechanical Fitness Assessment and disclosure of the vehicle history information. Disclosure of information as set out in the ISCR and the ABR can be found on amvic.org. The Government of Alberta has produced a helpful factsheet on internet shopping.
Internet sales Q & A
Can a traditional automotive business also sell vehicles online to consumers?
Yes, as long as they hold an AMVIC licence for retail sales or lease.
Can an automotive business take a vehicle to a consumer’s home for a test drive?
Yes, as long as the test drive is solely to evaluate the vehicle’s performance, suitability and/or condition prior to purchase or lease and for no other purpose. A best business practice would be to have the terms and conditions of the test drive reviewed by the consumer prior to the test drive taking place. This will clarify if the vehicle can be kept overnight, what happens if there is an accident, etc.
Can an automotive business take a contract to the consumer’s home so they can sign it if they like the vehicle?
If there are documents to be signed, they must be delivered to the consumer by an AMVIC-registered salesperson.
Can an employee or third party delivery service be used to deliver a vehicle to a consumer’s home?
Yes, if the bill of sale has been signed and all required disclosure is provided to the consumer by an AMVIC-registered salesperson prior to delivery of the vehicle.
Why does the ISCR allow for cancellation of the contract when in a traditional sale consumers are told there is no “cooling off” period?
The ISCR allows for cancelling of the contract under very specific circumstances, such as the vehicle is not as represented to the consumer, or the disclosure or delivery requirements were not met.
No “cooling-off” period refers to a situation such as a consumer decides they don’t like the vehicle or they can’t afford the payments. In those cases, the vehicle cannot be returned.
Internet sales come with greater requirements as per the ISCR as compared to a traditional transaction. The burden of understanding those requirements rests with the automotive business or there is a risk the consumer will be able to cancel the contract. Automotive businesses should ensure they are complying with the regulation.
What if the consumer wants to cancel the internet contract? What if the business fails to refund the money after being given proper notice?
Recourse for the consumer is taking legal action to recover the debt. Suppliers are encouraged to refer to Sections 6 and 7 of the ISCR.
What about sales to a remote consumer who is buying the vehicle sight unseen? What are the automotive business’s legislative requirements?
These consumers are potentially the most vulnerable. The ISCR requires automotive businesses ensure these consumers receive full, clear and comprehensible disclosures of vehicle information. Automotive businesses are expected to provide these consumers with the opportunity to inspect and drive a vehicle, and to cancel the contract if the vehicle is not suitable or not as represented.
Please visit amvic.org for more information on legislation and compliance.