Have you or someone you know had a less than optimal experience with a new car? Most people know the term “lemon” to refer to a new automobile that turns out to have several manufacturing issues affecting its operation.
Unlike individual states south of the border, Canada does not have formal “lemon laws”. However, there does exist a federally incorporated not for profit organization called the Canadian Motor Vehicle Arbitration Plan (“CAMVAP”) which offers an alternative dispute resolution process for vehicle defects and warranty disputes between consumers and manufacturers.
This process is a free service for the public, provided their vehicle meets certain requirements, and is made by a participating manufacturer. Many auto manufacturers voluntarily participate, including industry giants Toyota, GM, Honda, Ford, VW Group, Mercedes-Benz, and more.
Beyond this, there are a few other conditions, including that your vehicle must be from the current or four previous model years, have less than 160,000 km, and been purchased from a manufacturer authorized dealership in Canada. If you have exhausted your efforts with the manufacturer to resolve the warranty claims, you can apply to CAMVAP for an arbitration hearing to resolve the dispute.
The arbitration is binding, and participants must waive their right to subsequent litigation. The arbitrator will hear each side’s case, and determine the appropriate course of action. This can include ordering the manufacturer to buy back the vehicle or conduct further repairs, order a manufacturer to reimburse the consumer for out-of-pocket repairs/expenses, or decide that the manufacturer is not liable. The CAMVAP website states that of the 10,203 hearings held since 1994, 1,979 cases resulted in a buyback.
