Ontario man denied deposit after EV return — why the cooling off period doesn't work at the dealership

“You’re not given a choice once you put your signature on it,” Nagi told the news outlet. As a retiree, he said losing $1,000 stings even worse.

His experience isn’t unusual, and it reflects a common and costly, misconception about purchasing a vehicle in Ontario. Here’s what the rules say, when you can legally back out and how to protect yourself.

Is there a cooling-off period when you buy a car in Ontario?

Put simply: no. The Ontario Motor Vehicle Industry Council (OMVIC), the provincial regulator that oversees car dealers and salespeople, says once you sign a contract to buy or lease a vehicle, unless certain conditions are met, you can’t back out. In fact, every purchase agreement in Ontario must include a statement beside your signature warning that the contract is final and legally binding once signed.

That catches many buyers off guard since the province does offer a cooling-off period elsewhere. When you sign certain contracts at home, such as a home renovation agreement, you generally have 10 days to change your mind for any reason. However, a dealership showroom doesn’t qualify.

Why can a dealer keep your deposit?

If you back out without a valid legal reason, OMVIC says a dealer has four options at their disposal:

• Refund your deposit as a gesture of goodwill
• Try to save the deal with a more suitable vehicle
• Seek compensation, known as liquidated damages, for expenses such as advertising, freight and administration. These must be reasonable and justifiable, and may mean the dealer keeps part or all of your deposit
• Sue to enforce the contract

That means a lost deposit isn’t necessarily the worst-case outcome if you do change your mind.

When can you legally cancel a car contract in Ontario?

OMVIC outlines a few situations that give buyers a legal right to a refund or cancellation — they include:

• You left a deposit but never signed a contract — the dealer must return it on request
• A written condition in the contract isn’t met, such as financing approval, a mechanical inspection or a spouse’s approval
• The dealer failed to disclose key facts required under the Motor Vehicle Dealers Act (MVDA), such as past use as a taxi or daily rental, or the actual distance travelled — you have 90 days from delivery to cancel
• The dealer made false, misleading or deceptive representations under the Consumer Protection Act, you have up to one year from signing to request cancellation

Notice what’s missing from these four scenarios: second-guessing the cost of a vehicle. Nagi’s worries were the kind a written condition could have covered.