Not all consumers who are purchasing a vehicle want to finance it. Some may be able to pay for the vehicle in full with cash or a bank draft. 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 wishes to, they can pay off the entire amount as early as they wish.
Be clear and direct with the consumer so they understand how much they are really paying for a vehicle, including financing. Section 6(3)of the Consumer Protection Act states, “It is an unfair practice for a supplier (a) to enter into a consumer transaction if the supplier knows or ought to know that the consumer is unable to receive any reasonable benefit from the goods or services; (b) to enter into a consumer transaction if the supplier knows or ought to know that there is no reasonable probability that the consumer is able to pay the full price for the goods or services; (c) to include in a consumer transaction terms or conditions that are harsh, oppressive or excessively one-sided.”
When it comes to finance-only options for consumers, it is best practice to ensure the consumer is fully aware of the pros and cons of financing a vehicle before moving forward with the transaction. If an advertisement offers credit and states the interest rate or payment amount, make sure the advertisement complies with the Cost of Credit Disclosure Regulation concerning leasing and financing.
An advertisement must be clear if the price is a finance-only price and not a cash price. Advertisements will be non-compliant if there is a price difference based on the type of payment and there is no mention of that in the advertisement. Always be clear on all details of the advertisement to ensure that you are not in violation of the all in-pricing laws stated in the Automotive Business Regulation (ABR), Section 11(2)(l).
While businesses can choose the form of payment they accept, AMVIC does not approve or endorse any such program; consumers should never be told a program is “AMVIC endorsed”. Visit AMVIC’s advertising toolkit for examples of advertisements and other resources, including AMVIC’s additional advertising laws checklist that features Automotive Business Regulation (ABR) legislation.