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Elevated risk of re-vinned vehicles for dealerships

Learn best practices for mitigating risks associated with re-vinned vehicles.
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By Trisha Sirju , 

Vice President, Senior Risk Consultant, Marsh Advisory

02/24/2025 · 5 minute read

The automotive industry in Canada is facing a growing concern regarding re-vinned vehicles — those with altered or replaced vehicle identification numbers (VINs). These vehicles are often linked to criminal activities such as theft and fraud, posing significant risks to dealerships. This article outlines the elevated risks associated with re-vinned vehicles, best practices for dealerships, and relevant sources for further information.

Canada is currently experiencing a surge in vehicle theft, with Ontario being hit the hardest. Frequently, these stolen vehicles are given a new VIN to prevent them from being flagged in stolen vehicle databases. They are then sold back into the market under new identities, which may be completely fabricated or belong to another vehicle.

In Canada, the obligation for dealerships to compensate customers for stolen vehicles   can arise from several legal and regulatory frameworks, as well as consumer protection laws. Below, we highlight some key points specific to Canada:

Each province has its own consumer protection legislation that may require dealerships to provide certain guarantees regarding the vehicles they sell. If a vehicle is stolen, these laws may compel the dealership to compensate the customer for the stolen vehicle, especially if it was sold with a warranty.

Under various provincial Sale of Goods Acts, goods sold must be as described and free from defects. If a vehicle is stolen and the dealership did not disclose any issues related to the title or ownership, it may be held liable to compensate the customer for the cost of the vehicle.

If a dealership sells a vehicle that has a problematic title, for instance, it was stolen and not properly reported, it may be legally obligated to compensate the customer for the cost of the vehicle once the theft is discovered.

Dealerships that are part of a franchise may have contractual obligations to compensate customers for the cost of vehicles under certain circumstances, including theft.

Some dealerships may have insurance coverage that addresses losses from stolen vehicles, which can influence their decision to compensate customers for the cost of the vehicle.

To maintain customer trust and protect their reputation, dealerships may choose to compensate customers for the cost of stolen vehicles, even if not legally required.

In some provinces, regulatory bodies oversee automotive sales and may impose penalties or require compensation if dealerships fail to comply with consumer protection laws.

Best practices for mitigating risks associated with re-vinned vehicles

Mitigating risks associated with unwittingly purchasing and reselling re-vinned vehicles is crucial for Canadian dealerships. Below are some best practices that dealerships should consider:

  • When purchasing cars, always verify the VIN against multiple sources, including the vehicle's title, registration documents, and service records. Check for signs of tampering and inconsistencies.
  • Obtain vehicle history reports from reputable services, such as Carfax Canada or AutoCheck, to check for any past accidents, thefts, or title issues.
  • Be extra cautious with sellers who exhibit suspicious behaviors or raise concerns. For instance, they may be looking for a quick cash sale, offering prices that seem too low, or attempting to sell a very recently purchased vehicle.
  • If you suspect a vehicle is re-vinned, do not finalize the purchase. Instead, contact local law enforcement.

  • Conduct regular audits of the dealership's inventory to ensure all vehicles have been properly vetted.
  • Invest in technology that can assist in verifying VINs and detecting alterations. Use data analytics to identify patterns or anomalies in vehicle sales that may indicate the presence of re-vinned vehicles.

  • Familiarize yourself with provincial laws regarding re-vinned vehicles. Some provinces have specific regulations governing the sale of such vehicles, including disclosure requirements.

  • Maintain comprehensive records of all transactions, including purchase agreements, inspection reports, and history reports.
  • If you have any suspicion that a vehicle is re-vinned, do not give potential buyers the option to view it or look into vehicle history. Instead, contact local law enforcement.

  • Consider obtaining certification from a recognized authority   to assure buyers of the vehicle's condition.
  • Keep in mind that each province and territory in Canada has its own regulations and authorities governing vehicle inspections. For example:
  1. Ontario: The Ministry of Transportation of Ontario (MTO) oversees vehicle safety inspections and certifications.
  2. British Columbia: The Insurance Corporation of British Columbia (ICBC) manages vehicle inspections and provides certification for vehicles.
  3. Alberta: Alberta's vehicle inspection program regulates vehicle inspections through licensed inspection facilities.

  • Train staff on the legal implications and risks associated with re-vinned vehicles, including how to identify them and the importance of proper documentation.
  • Create a clear protocol for staff to report suspected re-vinned vehicles to management.
  • Stay up to date on changes in laws and regulations related to vehicle sales and re-vinning.

  • Ensure that your dealership has appropriate insurance coverage that includes protection against potential liabilities arising from the sale of re-vinned vehicles.

  • Consult with legal experts to understand the implications of selling re-vinned vehicles and to develop policies that comply with local laws.

  • Implement consumer protection policies to compensate customers if a vehicle is found to have undisclosed issues after purchase.

  • Monitor online reviews and customer feedback to address any concerns related to re-vinned vehicles promptly.
  • Build a reputation for honesty and transparency to foster customer trust.

  • Work with local law enforcement and regulatory bodies to stay informed about trends in vehicle theft and re-vinning, and to report any suspicious activities.

  • Create a plan for addressing situations where a re-vinned vehicle is discovered after sale, including communication strategies and legal considerations. Ensure that customer support is prepared to handle inquiries and concerns related to re-vinned vehicles.

The heightened risk of re-vinned vehicles presents significant challenges for dealerships in Canada. By implementing these best practices, dealerships can help protect themselves from legal liabilities, maintain their reputation, and ensure customer trust. By staying vigilant and proactive, dealerships can navigate this challenging landscape and continue to provide safe and reliable vehicles to their customers.

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