A Caution to Consumers When Trading-in a Vehicle
Dec
8
Thursday, December 8, 2016
OMVIC, Ontario’s vehicle sales regulator, has recently heard from a small number of consumers who encountered problems when trading-in vehicles to a dealer. These consumers traded-in vehicles that still had money owing on them — loans that were to be paid off by the dealer as part of the financing of the consumers’ new vehicles. “Unfortunately the dealers did not pay off the loans immediately,” explained Laura Halbert, OMVIC’s Director of Compliance. “This left the consumers making payments on their new cars as well as on their trade-ins.”
In one recent case eleven customers of South Keys Auto Sales Inc., operating as The 4×4 Store, had to make claims to the Motor Vehicle Dealers Compensation Fund, explained Halbert. “In eight of those cases the dealer failed to pay out loans and remove liens from trade-ins.” The Fund, which is financed by contributions from OMVIC-Registered Dealers, compensated those eight consumers a total of $229,200.
In September OMVIC revoked the licence of The 4X4 Store for failing to conduct business with financial integrity and responsibility.
OMVIC’s Code of Ethics, the Consumer Protection Act and the Sale of Goods Act require dealers to remove liens on trade-ins as soon as possible. But even though these legal requirements exist, OMVIC urges consumers to be mindful of early warning signs that indicate the loan on their trade-in was not paid in full. “If a consumer notices a payment is debited from their account for a vehicle they have traded-in, they should take immediate action,” urged Halbert. “They should contact the dealer and their financial institution; if that doesn’t rectify the problem, they should contact OMVIC.” And should a dealer offer to make the monthly loan payments on a customer’s trade-in, rather than pay off the loan in full, consumers should understand this is a huge risk and contact OMVIC at once.
While these types of occurrences are rare and most transactions with registered dealers go well, it is worth noting that only when a consumer buys from a dealer, are they protected by OMVIC and the Compensation Fund. Should a consumer buy a vehicle privately and encounter problems, say for instance, an unpaid lien, the purchaser is pretty much on their own with little recourse other than the courts.
OMVIC’s Complaints and Inquiries Team offers free assistance to consumers who may have an issue arising from a transaction with a registered dealer and can be reached at 1-800-943-6002 x3942.
A translation service is also available in over 150 languages.
For more car-buying tips, visit omvic.ca
Connect with OMVIC on social media!
Ontario Motor Vehicle Industry Council
@omvic_consumers
@omvic_official
Ontario Motor Vehicle Industry Council
www.omvic.ca
www.ontario.ca/page/consumer-protection-ontario
Copyright OMVIC ©2016