February is the month for falling in love! Before you fall in love with your next vehicle, AMVIC wants you to keep in mind the financial costs of buying and owning a vehicle.
Have you ever heard of negative equity? That is when the amount you owe on a vehicle is actually more than what the vehicle is currently worth. If you decide to trade in your vehicle before the loan is paid off, the debt from your previous purchase could be carried over as negative equity to your new vehicle as part of the purchase. Also, the value of the vehicle you are purchasing may not be sufficient to secure the now substantially higher than car value loan.
Financing over a longer term may help you get a more expensive vehicle, however it also means it will take longer to pay off that vehicle. All costs of owning a vehicle, including depreciation, ongoing maintenance, insurance and fuel should be considered before you make your purchase.
Buyers should also ensure dealers are outlining any negative equity in all new financing and purchasing documents to avoid allegations of fraud from the finance company or financial institution. Section 31.1(1) of the Automotive Business Regulation outlines what is required on a bill of sale, including any trade-in vehicles with loans not paid off.
AMVIC has helpful consumer guides that you can print and take with you to know what to look out for when you go car shopping.
Understand your consumer rights by visiting amvic.org.
Read the previous Financial February bulletins:
Fraud Prevention Month is coming!
March is fast approaching, which means Fraud Prevention Month is coming up. AMVIC will be joining the Competition Bureau’s Fraud Prevention Forum partners in committing to raising awareness on fraud and educating consumers and industry on how to recognize, reject and report fraud. Keep an eye on AMVIC’s Twitter, Facebook and Newsroom for tips and information.