It is common practice for lenders to provide financing for vehicle purchases that may include negative equity. It usually occurs when a customer’s trade-in is worth less than the amount still outstanding on the loan. The Motor Vehicle Dealers Act (MVDA
) requires contracts reflect the true nature of the transaction including identifying negative equity.
The video above is designed to help dealers, managers and salespeople better understand the requirement to ensure negative equity is properly disclosed on contracts.
To further assist dealers to ensure negative equity is properly disclosed and to help dealers explain negative equity to their customers, OMVIC has produced these tools and resources:
Disclosing Negative Equity: Fact Sheet
Educate Your Customers: Negative Equity Calculator
Educate Your Customers: Negative Equity Brochure
Negative Equity Quiz
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