Sun. Feb 25th, 2024

Dealers refuse to sell their cars if the buyer does not borrow against the purchase.

He was ready to buy a car. Everything changed when he took out his checkbook

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Shari Prymak, from Car Help Canada.


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At certain dealers, it is no longer enough to have money and a driving license to buy a car.

Tammy Hussey even claims that a salesman abruptly asked them to leave when she and her 84-year-old father insisted on paying from their savings.

Ms. Hussey says she accompanied her father to North York Chrysler, a Toronto dealership. After a test drive, Mr. Hussey decided to purchase a used car, a 2021 Jeep Compass.

However, without taking out a loan and accepting the financing terms dictated by the dealer, it proved impossible to purchase the SUV.

Being asked to leave a dealership when you're ready to sign a check to buy a car? I still can't believe it, she said, still stunned.

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This is a situation that is repeated more and more often, explains the nonprofit organization non-profit Car Help Canada, which has recorded a marked increase in the number of complaints in this regard.

However, this sales strategy is not illegal , according to a government agency.

If certain automobile manufacturers have their own financing office, several relay the loan contracts that they have their customers sign to third-party financial establishments, this being the case. that is to say banks or loan companies.

However, these offer high commissions to the dealers who pass these contracts on to them.< /p>

According to Kenton Maitland, general sales manager for Platinum Mitsubishi in Calgary, these commissions can range from $500 to $2,000 per vehicle. Despite the fact that these financing contracts are an important source of income, he says he has never refused cash. He believes it would damage his long-term relationships and reputation.

CBC has repeatedly contacted Canada's largest lenders – Scotiabank, CIBC, RBC, BMO and TD – for more information on the commissions they pay to dealers, but their spokespersons did not #x27;did not respond or declined to comment.

For its part, North York Chrysler did not respond to an interview request. However, according to its website, to prevent exports and non-retail purchases, cash sales are limited to local customers who reside within a five-mile radius of the dealership. Mr. Hussey lives in Timmins, nearly 700 kilometers from Toronto.

According to Shari Prymak, executive director of Car Help Canada, this practice is recent. We started hearing about "forced financing" in 2022. Since then, we have received more than 100 complaints.

George Iny, director of the Motorists' Protection Association, says the national shortage of vehicles, exacerbated by the pandemic and supply chain problems, has created a market in which sellers can allow forcing the note in order to maximize profits.

They cannot get enough vehicles, so they try to get as much profit as possible on each vehicle.

A quote from George Iny, director of the Automobile Protection Association

Keith MacDougall, who sold Hondas, Fords and Volkswagen in Ontario before changing careers, agrees.

When I was selling cars, […] it didn't matter if you wanted to pay cash or take out a finance deal, the dealer was pretty happy to sell the car, make a few bucks and drive it out of the lot.

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Keith MacDougall was a car salesman for many years.

Mr. MacDougall says he tried to buy a used car at a downtown Toronto dealership recently. He says that he himself caused the negotiation to abort. The salesman made him nervous and insisted that he sign a financing contract that he didn't need, he explains. He didn't seem to care at all about losing the sale.

There is so much demand for these cars that dealers are not really inclined to sell, because they know there will be a new [customer] the next day who will buy and accept the offer they make to him.

There is no law in Canada which stipulates that a business must accept cash payment.

Additionally, according to the Ontario Motor Vehicle Industry Council (OMAC), forcing customers to take out financial loans in order to purchase a product could be considered a form of tying. However, although tying may go against the spirit of fair and open competition in the automobile sales industry, it is generally not prohibited by existing laws. , writes a COCVA spokesperson in an email.

COCVA was created by the Ontario government to protect the public interest and ensure a fair, safe and informed marketplace, reads -on on

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John Hussey finally bought a RAV4.

For his part, Mr. Hussey decided to shop around a little more. Ultimately, he bought a brand new Toyota RAV4 and paid for it from his savings: no loan necessary. He is very satisfied, concludes his daughter.

With information from Danielle Nerman, CBC

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