'Greed has taken over': Why forced financing has pushed some consumers away from buying a vehicle |  Globalnews.ca

‘Greed has taken over’: Why forced financing has pushed some consumers away from buying a vehicle | Globalnews.ca

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

They saw a used 2020 Volkswagen E-Golf advertised and came to a local dealer to take it for a test drive. However, the joy of sitting 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 rejected their cash offer and told them the only option was to finance the vehicle.

“They wanted us to finance it or some part of it, but something had to be financed,” West said, adding that nowhere in the ad did it say cash offers were not accepted.

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The car fits like a glove. It’s the one I wanted, but we didn’t want to do business with that kind of dealership.”

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Consumer Matters: The Battle for Price Protection

The nonprofit Automobile Protection Association (APA) told Consumer Matters that forced financing is a deceptive tactic.

“For the customer, this represents a hidden fee that is not included in the price of the ad. The customer is asked to pay interest so that the seller can collect a commission from the lender. This is not correct if the customer does not need the loan,” said George Iny from APA.

“APA’s position is that if they’re going to do it, they have to make you whole 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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Iny said APA has heard of several reports of forced funding happening across the country and supply chain pressures are only making it worse.

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

The Vehicle Sales Authority, BC’s auto sales regulator, told Consumer Matters in a statement: “There is no legal requirement for motor dealers or any BC dealer, as far as we can determine, to advertise that they do not accept cash payments. Unless otherwise provided by special law, a motor dealer (or any trader) may impose conditions or restrictions on the sale of its goods or services. That includes how they’re paid.”

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

The other option is to leave like West and Balmer if the deal just doesn’t feel right. “It didn’t seem like a first-class thing to me.” It seemed shady to me. It felt deceptive,” Balmer said.

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