Compensation Fund Use of Vehicle Defined
The Motor Dealer Customer Compensation Fund is established under the
Motor Dealer Act and
Motor Dealer Customer Compensation Fund Regulation.
To be eligible for compensation from the Fund, applicants must be individuals (not businesses) and their claims must be in regards to eligible consumer transactions.
To be considered a consumer transaction, the law requires that a vehicle is purchased or leased by an individual primarily (at least 51%) for personal or family use and not primarily for business purposes.
A vehicle’s use is determined at the time of the transaction. If the vehicle is intended for business use or to generate income at the time of the transaction, a later change in use to personal or family purposes does not bring the vehicle in the
Fund’s jurisdiction.
What does personal or family use mean?
The vehicle is owned by an individual (not a company) and is not used to try and generate income.
Note: Using the vehicle to go to and from work is considered personal use. Using a vehicle to go to and from clients as part of your job is considered business use.
What does business use mean?
The vehicle is owned by an individual or company and is used to try and generate income. For example, the vehicle is used:
- to conduct sales calls
- to meet with clients
- to carry or store equipment or inventory
- to conduct business
- as a company vehicle
What do we look at to determine the use of the vehicle?
- relevant portions of income tax forms showing the declared percentage use of a vehicle for business purposes
- declared use of the vehicle on insurance documents
- statements from the claimants i
- if the vehicle was purchased to replace a previous vehicle, the primary use of the vehicle being replaced
- declarations made at the time of the transaction
- evidence of how the vehicle was used after the purchase
It is up to the claimant to prove that the transaction and the dispute over it falls under the Fund jurisdiction.
If you have any questions, please contact
VSA Consumer Services.
NOTE: This is to provide general information and is not intended to be legal advice.
