“Greed has taken over”: Why forced financing is causing some consumers to forego buying a vehicle

After waiting months to find an electric vehicle, Vancouver residents Dan West and Bryan Balmer thought the search was finally over.

They saw an ad for a used 2020 Volkswagen E-Golf and arrived at the local dealership to try it out. However, the joy of getting behind a new set of wheels quickly faded when they offered to pay cash for the car.

“We had the money and it didn’t make sense to fund something we didn’t have to fund,” West said.

However, West and Balmer said the dealership declined their cash offer and told them the only option was to finance the vehicle.

“They wanted us to fund it or part of it, but there had to be something funded,” West said, adding that nowhere in the ad did it say cash offers weren’t. not accepted.

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The car fits us like a glove. It’s the one I wanted, but we weren’t going to do business with a dealership like that.

Click to play the video: 'Consumer Matters: Battle for price protection'

Consumer Matters: Battle for price protection

The nonprofit Automobile Protection Association (APA) said Consumer issues forced funding is a deceptive tactic.

“It comes down to the customer paying hidden fees that aren’t in the price of the ad. The customer is asked to pay interest so that the dealer can collect a commission from the lender. It’s not okay if the customer doesn’t need the loan,” said APA’s George Iny.

“The APA’s position is that if they want to do that, they have to give you the whole thing because you’re paying interest on that loan, whether you like it or not, for at least three months and in many cases six months. .”

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Read more:

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Iny said the APA has heard of multiple reports of coerced financing across the country and that supply chain pressures are only making it worse.

“What we saw with the shortages that followed was that greed took over,” he said.

The Vehicle Sales Authority, British Columbia’s auto sales regulator, said Consumer issues in a statement: “There is no legal requirement for any car dealership, or any merchant in British Columbia, as far as we can determine, to advertise that they do not accept cash payments. Subject to specific law to the contrary, a car dealership (or any merchant) may impose terms, conditions or restrictions on the sale of its goods or services, including how they are paid for.

So what should potential vehicle buyers do? The APA recommends trying to negotiate a discount on the equivalent of the interest penalty you will pay for the vehicle if you end up financing the vehicle.

The other option is to walk away like West and Balmer if the deal doesn’t feel right. “It was not easy. It was fishy. It was misleading,” Balmer said.

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