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Buying a new car: countering dubious practices

Rising criticism against the shady practices of certain dealers

The pandemic has led to a surge in demand for new vehicles, with waiting lists reaching unprecedented lengths. Against this backdrop, some dealers are clearly trying to take advantage of the situation.

It has recently come to light that a number of dealers have been engaging in questionable practices with their customers, trying to extract more money from them.

This is happening more and more. These practices are illegal, and there are ways to counter them. Here’s an overview of the types of scams to watch out for when buying a new car.

Be cautious when buying a new car!

When you’re in the process of buying a new vehicle and you sign an offer to purchase, be aware that dealers have absolutely no right to change the price after the fact.

The Consumer Protection Act obliges the dealer to respect the initial purchase offer. As a consumer, you can withdraw from this offer without having to provide any reason. The dealer, on the other hand, has no such right.

Unfortunately, we’ve learned that some dealers try to increase the price after the fact, therefore not respecting the purchase offer.

In such a situation, customers feel held hostage and are even denied services if they don’t accept the new price. Their file may be shelved, and they may have to wait even longer to buy their new vehicle.

Please understand that this approach is illegal. It involves threats and illegitimate gestures designed to induce the customer to enter into a new contract. This is called a defect in consent.

We’ve also observed a troubling trend of increasingly aggressive maneuvers to extract more and more money, including the requirement for a customer to take out tire insurance on his vehicle lease — a highly unusual practice.

What can I do to protect myself?

If you find yourself in a similar situation when buying a new car, you can protect yourself.

The APA (Automobile Protection Association) has some solid advice to help you navigate these tricky situations:

  • Take possession of the vehicle.
  • Send a formal notice to exercise your rights.
  • File a small claims case.

The dealer will often reimburse the amount due after you have taken these steps. If not, you can go to small claims court.

Moving towards administrative sanctions?

These practices are on the rise, and they need to stop. The withdrawal of a dealership’s license would be an effective administrative sanction that could help put an end to these practices.

From 2023 to date, 25 dealers have been found guilty of charging more than the advertised price for a good or service. The fines levied ranged from $750 to $80,000.

Furthermore, there are approximately 20 other prosecutions underway. To date, no licenses have been revoked.

Marie Annik Grégoire, professor at Université de Montréal’s Faculty of Law, asserts that retailers are currently more inclined to break the law than to comply with it. However, the day this changes, real changes will also occur. This is why many are criticizing the Office de la protection du consommateur (OPC) for not applying harsher sanctions.

However, the day the opposite is true, real changes will occur. It is for this reason that the OPC is criticized for not being more severe in its sanctions.

Consumer protection when buying a new car

It’s obvious that questionable practices by car dealers are a persistent, unacceptable problem. It’s vital that consumers know their rights and how to protect themselves.

At Malouin Assurance, we’re committed to protecting consumers and asserting their rights. Contact us if you need advice or assistance.

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