Dangerous enterprise: Deal with subprime automobile finance offers with warning

Low credit score scores typically imply high-interest charges and fewer automobile decisions. Don’t signal till you’re certain

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Nothing in life is free — particularly if you borrow cash to finance a serious buy. Credit score is a well-liked option to fund a brand new or used automobile in Ontario however – as with a automobile buy contract – there isn’t a statutory cooling-off interval when you’ve signed a finance settlement. As such, it’s an especially tough gap from which to flee for those who uncover issues with the deal after the very fact or understand you can not afford it.

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OMVIC, Ontario’s motorcar gross sales regulator, advises patrons to verify the high quality print earlier than they signal a finance settlement and to buy round for the very best credit score affords. However what if a poor credit score rating means you don’t have the posh of competing finance choices from mainstream lenders? What if there’s just one deal, and even just one automotive, on the desk?

“Essentially the most weak clients are folks with no credit score or unfavorable credit ratings,” says Tim Hines, OMVIC’s director of shopper help. “They’re essentially the most prone to the dangers of financing a brand new/used automobile. The gross sales course of could also be utterly totally different from the common state of affairs of going right into a dealership, selecting a automobile, after which taking a look at finance choices. We urge customers to take their time to totally evaluate the automobile and contract previous to signing”.

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OMVIC’s shopper help staff is at all times obtainable with recommendation for those who’re uncertain at any stage of the vehicle-buying journey. It’s at all times higher to ask a query earlier than signing, than after.

Hines explains that if you end up in a state of affairs the place you’re being requested to signal a finance settlement earlier than you’ve had the time to correctly evaluate the automobile or the contract, it’s in all probability greatest to stroll away.

“When you signal that finance settlement, there’s doubtless no going again,” he continues. “On the shopper help staff, we’ve got powerful conversations with folks on daily basis who’ve discovered issues after signing. Don’t signal till you perceive the settlement and are 100% snug with its phrases and their implications.”

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No matter your place, it’s necessary to tell your self of your credit score state of affairs earlier than you begin the shopping for course of. Consumers can receive their credit score rating upfront from an impartial company like Equifax or TransUnion Canada earlier than looking for loans.


Should you’re searching for additional recommendation, OMVIC is there to assist customers navigate the method of shopping for a brand new or used automobile and guarantee sellers adjust to the legislation. Go to OMVIC.ca to entry free car-buying assets to get you began and join the quarterly publication, Shopper Line.

You may also contact OMVIC’s shopper help staff at [email protected] or 1-800-943-6002 for knowledgeable recommendation and solutions to all of your car-buying questions, or when you have a grievance a few seller or salesperson in Ontario.

On Monday, June 12th at 7:00 p.m. OMVIC shall be internet hosting a webinar on the best way to purchase a automotive in Ontario. A consultant from OMVIC will present assets, suggestions, and recommendation to automotive patrons for purchasing new & used automobiles in Ontario. Click on right here to register.

Comply with OMVIC on social media to remain updated on the newest information.

IG: @omvic_official
Twitter: @omvic_official
Fb: Ontario Motor Automobile Business Council (OMVIC) 

This story was created by Content material Works, Postmedia’s business content material division, on behalf of OMVIC.

Graham Michaels, Postmedia Content Works picture

Graham Michaels, Postmedia Content material Works