Transparency in Vehicle Financing Offers

Most car buyers rely on dealer-arranged financing, assuming dealers will act in the buyer’s best interest. In reality, most dealers receive commissions from lenders and may prioritize higher-paying options over better terms for consumers. Some dealers withhold lower rate offers, steering car buyers toward loans that maximize dealer profits. Since salespersons rely on commissions, their recommendations may favour profitability over consumer benefit, as long as they remain competitive and avoid clear noncompliance.

Dealer Obligations Under the Law

Under the Motor Vehicle Dealers Act (MVDA) and the Consumer Protection Act (CPA), dealers and salespersons must conduct business with honesty and integrity. Dealers must:

• Disclose on the bill of sale if they or their salespersons receive a commission from a lender (Ontario Regulation 333/08, s.39(2)(21)).
• Avoid making false, misleading, deceptive, or unconscionable representations (CPA, ss.14-15).
• Act with honesty, integrity, and fairness, and work to prevent misrepresentation or unethical practices (Ontario Regulation 332/08, s.9).

Noncompliant Conduct

The following practices may harm consumers and lead to further review for administrative action:

• Upselling an interest rate: Claiming a consumer qualifies for a higher rate despite knowing they also qualified for a lower one.
• Withholding financing offers: Failing to disclose all approved financing offers and steering the consumer toward a deal with a higher interest rate because it benefits the dealer.
• Lack of transparency: Not informing consumers of the number of financing offers where the consumer received approval and from which lenders they were approved by.
• Misrepresenting dealer intent: Suggesting the dealer is acting in the consumer’s best interest when they are not.

  NOTE A dealer is also required to maintain all records relating to trades as outlined in Ontario Regulation 333/08 s.53 and have them available for inspection if and when requested.

OMVIC has strengthened its review processes to identify and address these violations. Dealers and salespersons must ensure full transparency in financing disclosures to comply with the law and maintain consumer trust. Noncompliance may result in disciplinary action, registration revocation, or prosecution. For more information, visit OMVIC’s website or contact our Industry Standards & Conduct team.