OMVIC Practice Test

What is a significant risk when purchasing from unlicensed dealers?

1. Better pricing and negotiations

2. Reduced chances of getting a new vehicle

3. Increased chances of fraud and lack of recourse

4. Availability of unique vehicle models

The correct answer is: Increased chances of fraud and lack of recourse

Purchasing from unlicensed dealers poses a significant risk due to the increased chances of fraud and lack of recourse. Licensed dealers are regulated and must adhere to specific laws and guidelines designed to protect consumers. This includes providing accurate information about the vehicle, ensuring it meets safety standards, and maintaining certain ethical practices. Unlicensed dealers, on the other hand, are not bound by these regulations. Consequently, buyers may face issues such as misrepresentation of the vehicle's condition, hidden problems that go undisclosed, or even vehicles that have outstanding liens. In such cases, if a buyer encounters fraud or significant issues with the vehicle, they have limited or no avenues for recourse to rectify the situation. This lack of regulatory oversight can leave consumers vulnerable, making it crucial to only work with licensed dealers who provide legal protections and reliable avenues for support. The other answer choices do not encompass the inherent risks associated with dealing with unlicensed dealers, as they focus on perceived advantages or unrelated issues that do not address the potential for fraud and the absence of legal protection in these transactions.