The Motor Dealer Customer Compensation Fund provides compensation to consumers who have lost money because a motor dealer has either gone out of business or has failed to meet certain legal obligations. The money in the Fund comes from contributions made by all licensed motor dealers in BC. The Fund is the last resort for dealing with a dispute with a dealer and only some types of losses are covered by the Fund.
If you have general questions about the Motor Dealer Customer Compensation Fund, you can contact Consumer Services at the Motor Vehicle Sales Authority for more information:
Vehicle Sales Authority of BC
Suite 280 – 8029 199th Street
Langley, BC V2Y 0E2
Tel: 604.575-7255 (Lower Mainland)
Toll free: 1. 877.294.9889
To be eligible for compensation from the Fund, you must meet all of the following requirements:
- You must be an individual, not a corporation, partnership or any other kind of business.
- You must have entered into an agreement with a registered motor dealer in BC to do one of the following:
- buy or lease a vehicle
- buy an extended warranty or service plan for a vehicle, or
- consign your vehicle for sale by a dealer.
- If your agreement was to buy or lease a vehicle or buy an extended warranty or service plan for a vehicle, you must have used (or intended to use) the vehicle primarily for personal or family purposes and not primarily for business purposes. This means that more than half of your use of the vehicle (or intended use) must be for personal or family purposes.
- The loss you suffered must be a type of loss covered by the Fund (see What types of losses are covered by the Fund?).
- You must have made a demand to the dealer to pay the loss, which the dealer refused or failed to pay.
- Your claim must be related to the transaction that happened no more than 4 years from the date of your Demand to a Motor Dealer.
Compensation is available from the Motor Dealer Customer Compensation Fund for consumers who lost money because a dealer has gone out of business or has failed to meet certain legal obligations. There are limitations to the losses that are covered.
If your dispute is with a dealer still in business, the Compensation Fund may not be the best option for you. See Resolve a problem when a dealer is licensed.
You may also want to consult a lawyer to see if you have any other legal remedies. There may be time limits and you should take steps to understand your rights as soon as possible. See the Legal Advice Fact Sheet 102 kB
- The fund compensates qualified consumers who have lost money because a motor dealer has either gone out of business or has failed to meet certain legal obligations
- There are limits on who can apply for compensation and what types of losses are eligible
- The maximum amount of compensation is $20,000 per eligible loss
- Claim decisions are made by the Motor Dealer Customer Compensation Fund Board based on the requirements and limitations of the legislation establishing the fund
- All licensed dealers in BC make contributions to the fund
- You must be by an individual (not a corporation, partnership of any other kind of business)
- Your dispute must involve a motor vehicle. Disputes involving all-terrain vehicles, farm tractors, motor assisted cycles, or construction, mining or logging machinery are not eligible.
- Your dispute must involve an agreement with a dealer licensed in BC to:
- buy or lease a vehicle, or
- buy an extended warranty or service plan for a vehicle, or
- consign your vehicle to be sold by a dealer
- Your transaction must involve a vehicle intended primarily for personal use. See the Compensation Fund Use of Vehicle Fact Sheet 110 kB
- Your claim must be related to the transaction that happened no more than 4 years from the date of your Demand to the Motor Dealer.
You are eligible to apply if you paid money or traded a vehicle to a dealer, as part of an agreement to buy or lease a vehicle, and:
- The dealer refused to deliver the vehicle you agreed to buy or lease, and the dealer had no legal right to keep the money you paid
- The dealer was unable to deliver the vehicle because the dealer went out of business and the dealer had no legal right to keep the money you paid, or
- The loss of the money or the trade-in vehicle was caused by the dealer’s dishonest or illegal conduct.
You are eligible to apply to recover the cost of an unpaid lien on the vehicle you bought or leased if:
- You had to pay a third party to clear the title of the vehicle, or
- The vehicle you purchased was seized by a third party and not returned to you.
You are eligible to apply if you bought a warranty or a service plan on a vehicle but later you were unable to use some or all of the warranty or plan. You loss may be covered if this happened because the dealer went out of business or because of some other failure by the dealer.
If your loss is eligible, you may be compensated for the lost value of the warranty or service plan.
For example, if you bought a five year warranty and the warranty provider went out of business after two years, the amount of compensation would be calculated as three years of lost warranty, or 60% of what you paid.
- You cannot be compensated for the actual cost of any repairs or service that might have been covered if the warranty or plan was still in effect
- You cannot be compensated if a warranty or service plan is insured by another party
- Disputes with a dealer about what should be included under a warranty or service plan are not covered.
- You are eligible to apply if the dealer refused to return the unsold vehicle or deliver the money from the sale of the vehicle, and the dealer had no legal right to keep the consigned vehicle or the money from the sale of the vehicle
- You are eligible to apply if the dealer went out of business and was unable to return the unsold vehicle or deliver the money from the sale of the vehicle, and the dealer had no legal right to keep the consigned vehicle or the money from the sale of the vehicle
- You are eligible to apply if the loss of the consigned vehicle or the value of the consigned vehicle was caused by the dealer’s dishonest or illegal conduct.
- Before making a claim, you must first make a written Demand to Motor Dealer 437 kB . The Demand must be made within 4 years of the date of the transaction to which the demand relates. Instructions in the form will tell you where to send the Demand.
- If your Demand is not satisfied within 30 days, or if you receive a response from the motor dealer and you are not satisfied with the response, you can make a claim. You have 120 days from the date of your Demand to Motor Dealer to make a claim. In certain circumstances, the Registrar of Motor Dealers may provide an extension to this term. Contact the VSA Consumer Services if you need an extension.
- Prepare a Claim Application 451 kB and gather all the documents listed in the form.
- Send your completed claim application to the VSA by email, mail, fax or deliver it in person.
- Your information is needed for your claim to be evaluated and investigated
- Your information is needed for administrative action to be taken
- Your information and statements may be shared with the dealership
- The VSA will provide information about your claim to another person only if you provide consent
- Unless the person is already your legal representative, you must complete an Authorization for Release of Personal Information and Records Form 101 kB
- You are agreeing to the Assignment and Undertaking terms in the Claim Application 451 kB
- You are agreeing to the use of your information for investigative and statistical purposes
- You are agreeing that the information is true and accurate to the best of your knowledge
- You are agreeing that, if the information you provide is a part of a formal decision, it may be posted on this website.
- No, you do not need a lawyer to represent you in the claim process
- Information on how to prepare a written submission to an administrative tribunal, can be found in the Justice Education Society’s Guide to Administrative Law in BC at http://www.adminlawbc.ca.
- Typically, it takes three to six months for the investigation and the decision
- The length will vary based on how complex it is and availability of VSA staff resources.