CAPITULO II: MARCO TEORICO
2.2. Conceptos Fundamentales
1. A dealer who sells a service plan to a purchaser or lessee of a motor vehicle shall ensure the contract for the plan includes, in a clear,
comprehensible and prominent manner, the following information:
a) The name and address of the purchaser of the service plan
b) The name and address of the beneficiary of the service plan, if the purchaser is not the beneficiary
c) The business address, registered name and registration number of the dealer that entered into the contract, together with the legal name of the dealer if it is different from the registered name
d) The registered name and registration number of the salesperson, if any, who is acting on behalf of the dealer
e) All restrictions, limitations and conditions imposed by the seller of the service plan under the service plan
f) A statement as to whether or not the service plan is insured, and if it is insured, the name and address of the insurer
g) The make, model and model year of the vehicle h) The VIN of the vehicle
i) A list of the goods and services provided under the service plan and a specific description for each item listed
Note: These apply when the purchaser or lessee is a customer who is not a registered dealer.
j) The commencement date and end date of the service plan, expressed by way of calendar date, kilometres the vehicle has been driven, or a combination of both
k) The amount of the deductible, if any, for goods and services provided under the service plan
l) The sale price of the service plan, including an itemized list of all fees or costs that must be paid at the time of purchase and during the term of the service plan
m) The obligations, if any, of the beneficiary of the service plan
n) The locations at which the vehicle can be serviced under the service plan o) Whether the service plan is transferable to another owner or lessee and
the amount of any fee for that transfer
2. For each contract for a service plan, the dealer shall ensure that: a) The contract is signed by the parties
b) If a registered salesperson is acting on behalf of the dealer, the salesperson signs next to the indication on the contract
c) The purchaser receives a copy of the contract immediately after signing it 3. A dealer shall not facilitate the sale of a service plan to a purchaser or lessee
of a motor vehicle unless the contract for the plan includes, in a clear, comprehensible and prominent manner:
a) The information required by subsection (2), except for paragraphs 3 and 4;
b) The name and address of the seller (provider) of the plan; c) The registered name and registration number of the dealer who
facilitated the sale of the contract, together with the legal name of that dealer if it is different from the registered name; and
d) The registered name and registration number of the salesperson, if any, who is acting on behalf of the dealer who facilitated the sale of the contract.
4. A dealer who forwards an application for a service plan by a purchaser or lessee of a motor vehicle to the seller of the plan is deemed to facilitate the sale of the plan for the purposes of subsection (4).
5. If a dealer facilitates the sale of a service plan to a purchaser or lessee, the dealer shall:
a) Use best efforts to ensure that the contract for the plan meets the requirements set out in clauses (3) (a) and (c);
b) Ensure that:
i) The dealer signs next to the indication, on the contract for the plan, of the information described in clause (4) (c); and ii) If a registered salesperson is acting on behalf of the dealer, the
salesperson signs next to the indication, on the contract for the plan, of the information described in clause (4) (d); and
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Chapter 9
EXTENDED WARRANTIES AND SERVICE PLANS
c) Within seven days after the parties enter into the contract for the plan, provide the seller of the plan with:
i) All documents detailing the contract that the dealer has in its possession; and
ii) All payments that the dealer has received from the purchaser.
9.06
Summary
Extended warranties must be backed or “guaranteed,” either by an insurance company or by a letter of credit provided to the Motor Vehicle Dealers Compensation Fund. Ensuring warranties are adequately backed protects consumers, dealers and the Fund.
Warranty and service plan disclosures must be clear. The regulations also mandate clear disclosure of specific information on contracts for warranties and service plans, including the components covered, conditions imposed and locations where service can be obtained. These requirements help purchasers and lessees understand the scope of protection and value offered.
9.07
Test Yourself
Refer to Appendix 1 for the correct answers. Review the relevant section of the chapter for any question you answered incorrectly.
The first questions below are the same questions
asked in “What Do You Know?” at the beginning of
this chapter. Try answering these questions again and
compare your results with your earlier answers.
Then, answer the additional questions.
1.
Extended warranties must be backed or guaranteed financially to ensure their viability. List two methods by which this backing can be provided.2.
If a dealer wishes to offer their own uninsured extended warranty, theymust provide to the Compensation Fund an irrevocable letter of credit in the amount of:
a) $100,000 b) $250,000 c) $500,000 d) $1,000,000
3.
Provide three pieces of information related to the coverage offered by the warranty that must be included in the warranty contract.4.
Dealers must send all payments and documents detailing the contract to the warranty company within:a) Two days b) Seven days c) Two weeks d) 30 days
5.
True or False: Service plans must be backed by an insurance company.6.
Contracts for service plans must disclose in a clear, comprehensible andprominent manner:
a) The goods and services provided under the plan and a specific description for each item listed
b) All restrictions, limitations and conditions
c) The locations at which the vehicle can be serviced
d) Information stating whether or not the service plan is transferable to another owner or lessee
e) All of the above
REMEMBER:
The questions on the Automotive Certification Test are in multiple-choice format only. This manual, however, contains a variety of question formats to help you understand the content, such as activities, assignments, multiple-choice questions, true-false questions and fill-in-the-blank questions.
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