It has come to the VSA’s attention that there have been instances where motor dealers are encouraging consumers to abandon their existing lease with another leasing company or dealer in favour of a new transaction with their dealership.
A number of dealers have been reported as encouraging consumers to abandon or break their existing lease agreement with the other dealer by offering them a new lease or purchase agreement with a new rate. The dealer does not pay out the consumer’s existing lease, but instead leads the consumer to believe there is a cost advantage by entering a new transaction with them. The consumer is also instructed that they can break their current lease agreement by returning the vehicle or having it repossessed, as well as by placing a stop-payment on their account and cancelling the vehicle insurance.
A consumer breaking a lease agreement can have various negative consequences that must be considered. For instance, there may be a negative notation placed on the consumer’s credit report. This and other important and material facts must be told to the consumer so they can make an informed decision.
If a dealer is coaching or advising someone about their current lease agreement, be careful. There is a responsibility on the part of motor dealers to ensure consumers are fully aware of their obligations of their existing lease agreement, including all of the consequences of breaking that agreement before they enter into a new transaction with your dealership. Do not exaggerate, use innuendo, or be ambiguous about their existing agreement terms. Misrepresenting a material fact or failing to state a material fact of their existing lease agreement is a deceptive act under the Business Practices and Consumer Protection Act (BPCPA). Making a misrepresentation about the new lease agreement is also a deceptive act under the BPCPA, including one regarding the total price of goods or services. You also may be interfering with the contractual relationship between the consumer and the lessor, which may have legal repercussions. Any licensees proven to be involved in deceptive acts may be subject to the Registrar issuing an administrative penalty, as well as suspending, cancelling, or placing conditions on their licence.
If you have any questions, please contact the VSA Industry Standards team by email or by calling 604-574-5050
Ian Christman, Registrar of Motor Dealers, has determined that the annual $300 dealer contribution to the Motor Dealer Customer Compensation Fund can be waived for the VSA’s fiscal year of April 1, 2021 to March 31, 2022.
Legislation requires that all new motor dealers contribute to the Compensation Fund for a minimum of 3 years before they are eligible to participate in a fee waiver; therefore, new motor dealers are not affected by this announcement and will be required to pay the fee.
This year’s Continuing Education unit, CE Unit 6- Business Ethics & Code of Conduct, is available on May 1st, 2021. Licenses expiring prior to May 1st will be allowed to renew with the understanding that CE Unit 6 must be completed before May 31st, 2021.
Need more information?
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Questions about your licence renewal? Please contact VSA Licensing by email or by calling 604-575-7256.