Automotive

Dealer refusing to sell used vehicle for cash if buyer doesn't live in area - only will finance it to you

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  • Dec 15th, 2018 9:18 pm
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Sep 2, 2006
6354 posts
1013 upvotes
Toronto, ON

Dealer refusing to sell used vehicle for cash if buyer doesn't live in area - only will finance it to you

hey guys,

This is a story I wanted to share of my car buying experience in buying (or trying to) a vehicle I saw at a dealership where they had this policy of: "We won't sell to you unless you live within 8km of our dealership." Now everything I'm sharing is as close to the facts as possible, there is some anecdotes in here but for the most part it's odd a silly thing that a dealership does.

Dealership: North York Chrysler, (Yonge & Steeles area in Toronto area)

Basically I was browsing Auto Trader, trying to find a family vehicle whether it's a large SUV or a van, etc. I came across a 2012 Town and Country limited, basically the best and most loaded van Chrysler made that year and it was on their site and available and it was aggressively priced, so having never considered this, brand, type of vehicle, I thought it was worth a look and their dealership was on the way home from work one day. I hadn't considered a van, especially a domestic van, but thought what the heck, let's support the guys down in Windsor eh?

I arrive, take a look, I mean it wasn't really for me immediately but I mean it could've worked and grown on me and the price was really low so it might've been worth a conversation. The sales person however informed me that they won't take any cash offers on the vehicle and only can take a finance offer.
...what?
A car dealership, a domestic car dealership that has a supply of used vehicles, doesn't want to take business from a potential customer who has the funds to pay for said product? Didn't make sense to me, put it aside as I didn't even want to get into the the whole "discriminating against customers" type of thing, I just pretended it was a tactic on their end to keep the prices of their domestic vehicles higher I guess?

Anyways, I walked out as it really wasn't for me to negotiate and talk if they didn't want to. The Used Car Manager called me later on and basically said the following:

"I understand you were interested in one of our cars" (yes)

"We work a little differently, we are a volume dealer we sell upwards of a 800 - 1000 cars a month with 30+ sales people" (okay sure, ya good for you guys! It's great you're that popular!)

"We price our cars really low because we don't negotiate, we post a price, add $400 admin fee and taxes and that's it. It's about moving volume" (Yes I guess that makes sense, no nonsense drive volume, etc. Although anything is negotiable so I don't buy that for a second).

This last part I thought was hilarious:

"Our marketing department has come up with some strategies to sell more locally, we find our success is from people who live around here and service their vehicle here, and we want to give those people better access" (uhh....)

"Therefore, we won't take an offer from you unless you finance. We want our vehicles to age first before we open up who we sell to"

After that he started going about trying to be my financial manager telling me the benefits of financing through them at 5% or more and that I can just pay off the loan immediately. Look they're entitled to try whatever strategy works for them to build their business, crazier things have happened. However, the logic and serving the customer piece seems out of line and I as a customer don't want to try to limit the way I buy because it fits their objectives? My interest is to find a car for as little as I can pay with the features that I want. They didn't seem to want to sell to actual paying customers in their goal of moving inventory.

I thought that was funny, and it was silly story to share. Actually on their auto trader listings they say they won't sell to anyone outside of 8km of their dealership.

Basically I think this CHRYSLER dealership (you know...the one that was bailed out, where there is tons of inventory of and perception isn't as good as it's import competitors) is out of touch with reality and you may enjoy a chuckle especially if you're trying to buy something from this dealer. My opinion, take your business elsewhere. Literally anywhere that takes Canadian dollars in exchange for a car without having you provide it through a bank in monthly installments with interest.

Too long, didn't read?: A Chrysler dealer won't sell it's used inventory to customers who don't live nearby if you're paying cash. They only want you to finance. They are trying to (and terribly) tell you that the justification for listing vehicles at such low prices are that they expect return business for service and parts, and thus a local customer has a higher chance of doing that. Rather than argue, you should probably take your business elsewhere if you're at all considering anything this dealership may sell.
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79 replies
Deal Expert
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Feb 11, 2007
21248 posts
25711 upvotes
GTA
Well, that makes sense for the dealer to do. If you don't like it then go somewhere else. Sounds more like a dumb bait and switch strategy to get you in the door. Not really big news since people should be highly skeptical of anything a deals does/says.
If the women don't find you handsome, they should at least find you handy.
Deal Fanatic
May 4, 2014
5217 posts
7141 upvotes
Toronto, ON
It's simple. They know these cars break down and if you're within 8km of the dealership, your chance of being towed back to their dealership will be much higher. It's part of the payment plan, you initially get a cheap car, but they milk you afterwards.
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Sep 2, 2006
6354 posts
1013 upvotes
Toronto, ON
Agreed. There are dozens of other dealers who sell the same product so not worried.

And yes...lol was waiting for that joke.
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Temp. Banned
Jun 18, 2008
5095 posts
4664 upvotes
Montreal
Nothing to see here, ALBI Group in QC works in a similar fashion and they sell more Mazdas than any Mazda dealer on the planet, including the ones in Japan. They price very aggressive and on some models they ask that you take the financing. The dealer gets a kickback of several hundred or even a thousand dollars/car if it's a large financed amount from the bank or finance company. Clearly that kickback makes up a large portion of the margins. If you pay cash he doesn't get that kickback. Personally I don't see an issue the prices are very aggressive and low, if you like the car and the price is good, take the financing and pay it off the first month.
Deal Addict
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Feb 10, 2010
1803 posts
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Toronto
You got me at "Dealership: North York Chrysler, (Yonge & Steeles area in Toronto area)"

Worst customer service and sales department EVER! Seriously.... EVER!!!
Deal Addict
Mar 22, 2004
3802 posts
1276 upvotes
They are making $$$ on financing, happened to my friend as well. If you really want the car and the price is good, just finance it for a month or two and pay in full later.

Thats what my friend did. I think there is financing fee of $499 and they also do not negotiate
Deal Fanatic
Jan 15, 2017
5751 posts
6124 upvotes
Ottawa
Time to make a call to OMVIC. Cash is legal tender. This is a classic example of tied selling and is illegal.
Deal Addict
Nov 16, 2011
1535 posts
1256 upvotes
Hamilton
Get in touch with the Competition Board of Canada and see what they have to say.

It may be anti competitive activity that can result in action. This type of info should also be visibly posted on sales pages and ads.
Banned
Aug 22, 2017
367 posts
162 upvotes
m4gician wrote: hey guys,

This is a story I wanted to share of my car buying experience in buying (or trying to) a vehicle I saw at a dealership where they had this policy of: "We won't sell to you unless you live within 8km of our dealership." Now everything I'm sharing is as close to the facts as possible, there is some anecdotes in here but for the most part it's odd a silly thing that a dealership does.

Dealership: North York Chrysler, (Yonge & Steeles area in Toronto area)

Basically I was browsing Auto Trader, trying to find a family vehicle whether it's a large SUV or a van, etc. I came across a 2012 Town and Country limited, basically the best and most loaded van Chrysler made that year and it was on their site and available and it was aggressively priced, so having never considered this, brand, type of vehicle, I thought it was worth a look and their dealership was on the way home from work one day. I hadn't considered a van, especially a domestic van, but thought what the heck, let's support the guys down in Windsor eh?

I arrive, take a look, I mean it wasn't really for me immediately but I mean it could've worked and grown on me and the price was really low so it might've been worth a conversation. The sales person however informed me that they won't take any cash offers on the vehicle and only can take a finance offer.
...what?
A car dealership, a domestic car dealership that has a supply of used vehicles, doesn't want to take business from a potential customer who has the funds to pay for said product? Didn't make sense to me, put it aside as I didn't even want to get into the the whole "discriminating against customers" type of thing, I just pretended it was a tactic on their end to keep the prices of their domestic vehicles higher I guess?

Anyways, I walked out as it really wasn't for me to negotiate and talk if they didn't want to. The Used Car Manager called me later on and basically said the following:

"I understand you were interested in one of our cars" (yes)

"We work a little differently, we are a volume dealer we sell upwards of a 800 - 1000 cars a month with 30+ sales people" (okay sure, ya good for you guys! It's great you're that popular!)

"We price our cars really low because we don't negotiate, we post a price, add $400 admin fee and taxes and that's it. It's about moving volume" (Yes I guess that makes sense, no nonsense drive volume, etc. Although anything is negotiable so I don't buy that for a second).

This last part I thought was hilarious:

"Our marketing department has come up with some strategies to sell more locally, we find our success is from people who live around here and service their vehicle here, and we want to give those people better access" (uhh....)

"Therefore, we won't take an offer from you unless you finance. We want our vehicles to age first before we open up who we sell to"

After that he started going about trying to be my financial manager telling me the benefits of financing through them at 5% or more and that I can just pay off the loan immediately. Look they're entitled to try whatever strategy works for them to build their business, crazier things have happened. However, the logic and serving the customer piece seems out of line and I as a customer don't want to try to limit the way I buy because it fits their objectives? My interest is to find a car for as little as I can pay with the features that I want. They didn't seem to want to sell to actual paying customers in their goal of moving inventory.

I thought that was funny, and it was silly story to share. Actually on their auto trader listings they say they won't sell to anyone outside of 8km of their dealership.

Basically I think this CHRYSLER dealership (you know...the one that was bailed out, where there is tons of inventory of and perception isn't as good as it's import competitors) is out of touch with reality and you may enjoy a chuckle especially if you're trying to buy something from this dealer. My opinion, take your business elsewhere. Literally anywhere that takes Canadian dollars in exchange for a car without having you provide it through a bank in monthly installments with interest.

Too long, didn't read?: A Chrysler dealer won't sell it's used inventory to customers who don't live nearby if you're paying cash. They only want you to finance. They are trying to (and terribly) tell you that the justification for listing vehicles at such low prices are that they expect return business for service and parts, and thus a local customer has a higher chance of doing that. Rather than argue, you should probably take your business elsewhere if you're at all considering anything this dealership may sell.
So, looking at the demographic of yonge and steele's area, most people drive Japanese or European cars. How are they to justify that everyone within 8KM range will buy a domestic car? I think this policy is totally absurd and that they should rethink their marketing strategies.
Deal Guru
Dec 11, 2008
13069 posts
3758 upvotes
Is this admin fee stuff legal? You can opt out right? Is the dealer FORCED to remove this fee because we had a situation in Willowdale Subaru where the guy refused to remove it. We did not want to pad his admin fee stats and were not interested. It was about $995.
Member
User avatar
Mar 19, 2015
273 posts
267 upvotes
K-W
I recently bought a used vehicle here. I came across the same load of BS.

To be fair, their prices are lower than market value for some vehicles, even once you add their $600 "financing" fee, lien registration fee, an OMVIC fees.

They told me I had to carry the loan for 6 months.

I actually shopped around to try and find comparable vehicles and I had a tough time beating their price.

Anyways, I bought it, and paid off the loan a month later (you can find cheaper financing elsewhere than their inflated rates). I called up my bank and confirmed this is an open loan, and there are no penalties to pay it off early. I read through the sales contract as well to confirm there's no charges for paying it off early.

I'll never do business with such a dealership again, though I do believe I got a solid, better-than-market-value deal on my vehicle.

I did get a voice message from the dealership's financing department (I'm guessing I violated their "6-month loan carry requirement") but nothing has come of it, and my car is gucci.
Member
Jan 22, 2017
410 posts
260 upvotes
What happen if you buy the car and do not carry the loan for 6 months?
Deal Guru
Dec 11, 2008
13069 posts
3758 upvotes
Squirtle wrote: I recently bought a used vehicle here. I came across the same load of BS.

To be fair, their prices are lower than market value for some vehicles, even once you add their $600 "financing" fee, lien registration fee, an OMVIC fees.

They told me I had to carry the loan for 6 months.

I actually shopped around to try and find comparable vehicles and I had a tough time beating their price.

Anyways, I bought it, and paid off the loan a month later (you can find cheaper financing elsewhere than their inflated rates). I called up my bank and confirmed this is an open loan, and there are no penalties to pay it off early. I read through the sales contract as well to confirm there's no charges for paying it off early.

I'll never do business with such a dealership again, though I do believe I got a solid, better-than-market-value deal on my vehicle.

I did get a voice message from the dealership's financing department (I'm guessing I violated their "6-month loan carry requirement") but nothing has come of it, and my car is gucci.
Yeah from all the dealers I visited, they all said it was open loans. Hopefully your contract doesn't say too much otherwise.
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Oct 6, 2010
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Toronto
Take your business to T-Man

Volume dealer.
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Jul 12, 2003
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Toronto
romsan04 wrote: They are making $$$ on financing, happened to my friend as well. If you really want the car and the price is good, just finance it for a month or two and pay in full later.

Thats what my friend did. I think there is financing fee of $499 and they also do not negotiate
Exactly, they want to play the payment game and make more profit from financing than selling the car off with cash. First they want to advertise the car price low and get ppl's interest and make people finance it with high %.. It is a trap.
Even the car is good deal, I wouldn't do business with them, who knows later if there is a fine print saying you are to pay such and such fee if you break the financing, etc...

The dealer is just sneak to deal with and should avoid at all cost.
Last edited by MP3_SKY on Oct 25th, 2017 10:42 am, edited 1 time in total.
Retired Forum Moderator February 2009 - June 2015
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skeet50 wrote: Time to make a call to OMVIC. Cash is legal tender. This is a classic example of tied selling and is illegal.
Not sure the exact rule for OMVIC, but it doesn't sounds right at all to not sell a vehicle with cash to anyone live 8km away. Sound like a BS
Next customer live within 8km, they will say they wont sell to anyone live 3km away with cash purchase....

**the person who downvote my post, pls feel free to chime in and share your different opinion. Instead of stay behind the keyboard and press the pointless downvote button.
Last edited by MP3_SKY on Oct 25th, 2017 10:43 am, edited 1 time in total.
Retired Forum Moderator February 2009 - June 2015
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Feb 9, 2006
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Brampton
skeet50 wrote: Time to make a call to OMVIC. Cash is legal tender. This is a classic example of tied selling and is illegal.
MP3_SKY wrote: Not sure the exact rule for OMVIC, but it doesn't sounds right at all to not sell a vehicle with cash to anyone live 8km away. Sound like a BS
Next customer live within 8km, they will say they wont sell to anyone live 3km away with cash purchase....
That's what that sounded like.

Tied Selling is illegal under the Federal Competition act. Tho they might argue that they are willing to sell but under the condition of finance but then the whole cash is legal tender piece also kicks in. v0v

http://www.competitionbureau.gc.ca/eic/ ... 00111.html

Then there's the OMVIC all in ad piece.

https://www.omvic.on.ca/portal/NewsPubl ... fault.aspx

You should just report them and see where it goes.
Deal Expert
Jun 26, 2011
15096 posts
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GTA
I bought a new car here in 2008. I was able to negotiate (I realize this may be different because it was new) and I did not live within 8km. When they would not budge on the price I wanted I simply got up and said I was going to Raceway Chrysler to buy and they quickly changed their minds.

I was also allowed to pay cash no problem. I didn't like the experience there either though. Sales guy was too pushy for my liking and they kept calling me and mailing me stuff for years afterward.

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