OMVIC Practice Test

Which of the following statements is NOT correct when selling to another dealer?

1. Selling dealers must disclose damage repairs in excess of $3,000

2. Selling dealers must disclose if the vehicle has two or more adjacent panels (that are not bumper panels) that have been replaced

3. Selling dealers must disclose previous use as a taxi, police vehicle, etc.

4. Selling dealers are not required to make disclosures in wholesale transactions

The correct answer is: Selling dealers are not required to make disclosures in wholesale transactions

The statement that selling dealers are not required to make disclosures in wholesale transactions is not correct. In the context of selling vehicles, including transactions between dealers, there are specific legal obligations around disclosure. These obligations typically include informing other dealers about significant damage, prior usage of the vehicle (such as if it was a taxi or a police vehicle), and any substantial repairs. This is crucial to ensure transparency and fair dealing, as other dealers rely on this information when purchasing vehicles to sell to consumers or for their own inventory. Disclosures related to damage exceeding a certain amount, the replacement of adjacent panels, and prior use are designed to protect all parties involved by promoting honesty and preventing deceptive practices within the automotive sales industry. Therefore, the correct understanding is that wholesale transactions also involve requirements for disclosure to maintain ethical standards in trade practices.