Not all consumers who are purchasing a vehicle want to finance it; some may be able to pay for a vehicle in full with cash. If it is your policy to finance all vehicle transactions, then the consumer must be made aware of all requirements as listed in the Cost of Credit Disclosure Regulation before entering into a financing contract. Remember, a disclosure statement regarding the credit agreement must be provided on or attached to the bill of sale.
Section 8(1)(s) of the Cost of Credit Disclosure Regulation means that if the consumer wants to, they can pay off the entire amount as early as they wish. Under Section 68 of the Consumer Protection Act (CPA) consumers have the right to pay off any non-mortgage loan in full any time after signing, or to make an extra payment with any scheduled payments without penalty.
Unfair practice
Be clear and direct with the consumer so they understand how much they are really paying for a vehicle, including financing. Under Section 6(3) of the CPA, it would be an unfair practice if the consumer is unable to receive reasonable benefit, if there is no reasonable probability the consumer can pay for the goods or services, or if the terms or conditions are excessively one-sided.
Advertising
An advertisement must be clear if the price is a finance-only price, and not a cash price. Always be clear on all details of the advertisement to ensure you are not in violation of the all-in advertised pricing laws stated in the Automotive Business Regulation (ABR), Section 11(2)(l). Visit AMVIC’s advertising toolkit for examples of advertisements and other resources, including AMVIC’s additional advertising laws checklist that features ABR legislation.