Unfair and Illegal: Dealerships Charging More for Cash Purchases in Canada
In Canada, dealerships are prohibited by law from charging different prices based on payment method. However, there have been reports of some dealerships still engaging in this practice, which is both unfair and illegal. This pricing strategy has raised concerns among consumer advocates, who argue that it’s discriminatory to charge more to those who have the means to pay in cash.
The rationale behind the traditional approach of offering discounts to cash customers is that dealerships save money on the financing costs. When a buyer pays in cash, the dealership avoids the costs associated with financing, such as interest payments and processing fees. Therefore, it makes sense for dealerships to offer discounts to cash customers, as they are saving money on the transaction.
However, some dealerships have flipped this approach, charging more for cash purchases in an attempt to make up for lost profits from financing. This practice is both unfair and illegal under the Competition Act, which prohibits businesses from engaging in deceptive marketing practices, including false or misleading representations about the price of a product or service.
Charging more for cash purchases can create confusion and mistrust among car buyers when they see two different prices for the same car, and they may question whether they are getting a fair deal. Moreover, this pricing strategy can be problematic for low-income buyers, who may not have the means to pay in cash and are already facing financial challenges.
Despite the illegality of this pricing strategy, some dealerships argue that it’s necessary to remain competitive in the market. They claim that financing a car comes with additional costs that must be factored into the price of the car, and that charging more for cash purchases is simply a way to cover those costs. Lebada Motors respects its customers and follows a strict price transparency policy. All our prices are listed online and that´s the price you will pay, financed or cash.
However, as a consumer, it’s important to be aware of your rights and to push back against any dealership that engages in this practice. If you believe that you’ve been charged more for a cash purchase, you can file a complaint with the Competition Bureau, which is responsible for enforcing the Competition Act.
In conclusion, charging more for cash purchases is both unfair and illegal under Canadian law. As a consumer, it’s important to be informed of your rights and to push back against any dealership that engages in this practice. By doing so, you can help ensure that all car buyers are treated fairly and transparently.
