Automotive

Required extended warranty on leased car?

  • Last Updated:
  • Jul 28th, 2021 1:54 pm
Deal Fanatic
Apr 16, 2007
8100 posts
3404 upvotes
Financial District B…
CanadianLurker wrote: Requiring the purchase of a warranty in order to obtain credit is called "coercive tied selling" and is illegal under the Bank Act. I don't think that Toyota Credit Canada Inc (or Toyota Financial Services) is an actual Bank so they wouldn't be governed by the Bank Act, however, in the spirit of compliance I would very highly doubt that they would stoop to such an unethical business practice.
That is correct for this instance, as stated TCCI is not a Schedule Bank
Periodically the coercive tied selling does occur, usually by deceit to the real Bank and buyer by the selling dealer if the approving lender is a Bank versus the manufacturers captive.
The finance manager would have to lie and state the warranty, LOE, or L&D insurances were a conditional approval requirement.
If caught, this forced fraudulent selling never affects us the Bank of course but that auto dealer automatically finds itself with one less finance source.


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----------------------------Licensed Credit Bureau member, S1, FI Automotive, CCP forums most banned = x 13 and counting, guess who that is?... stomped to the curb once again
Sr. Member
Mar 22, 2004
598 posts
376 upvotes
London, ON
mario-rock wrote: I hope you understand that after you sign the lease contract, it's not the dealer's car anymore, it's TFS'. So your argument doesn't make much sense.
TFS, as in "Toyota Financial Service"? Yes, I realize it isn't the "dealer" that owns the car, it is TFS, but my argument stands 100%. It's not my car, so why should I pay for protection that extends beyond my obligation term (such as undercoating, etc).
Deal Fanatic
Apr 5, 2016
5555 posts
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Calgary/Vancouver
OP you mentioned you're currently on work permit so your SIN probably starts with 9? If that's the case, unfortunately you won't be extended much of the benefits a SIN that starts with 7 provides like an unsecured line of credit or favorable interest rates. You'll just have to wait till you get PR before you can get these benefits. So with that being said, I would not just get credit for the sake of "building credit" because you won't get much further unless your SIN changes.

I would actually tell the dealer that they are engaging in tied selling but you'll give them a chance to correct it. If not, tell them you'll tell the media that they are engaging in tied selling and have proof. You'll probably get the terms you want afterwards.
[OP]
Newbie
Oct 4, 2020
14 posts
8 upvotes
Just wanted to do an update. As everyone has advised, this is terrible business conduct, so I have decided not to do business with them. And I also happened to find a very sweet deal at another dealer, so I have proceeded with this new dealer, and in cash. I was upfront this time that I did not expect any surprise fees, and that I did not want to waste more time. The process was very quick and smooth, as they knew I could easily walk away.

I thank all of you for your confirmation.
MP3_SKY wrote: Financing not approved, the bill of sale is void, you are entitle to get 100% of money back, Not $1 left to them.

Stay firm on it.
Thank you for your advice. I wrote them an email asking for a full refund, while listing their actions which implicitly implied that they were lying. Shortly afterwards, they called me and said they would process a full refund. I dodged a bullet, and your response helped me be scratch-free.
bomber17 wrote: OP you mentioned you're currently on work permit so your SIN probably starts with 9? If that's the case, unfortunately you won't be extended much of the benefits a SIN that starts with 7 provides like an unsecured line of credit or favorable interest rates. You'll just have to wait till you get PR before you can get these benefits. So with that being said, I would not just get credit for the sake of "building credit" because you won't get much further unless your SIN changes.

I would actually tell the dealer that they are engaging in tied selling but you'll give them a chance to correct it. If not, tell them you'll tell the media that they are engaging in tied selling and have proof. You'll probably get the terms you want afterwards.
This makes perfect sense and justifies my decision to go with cash. Thank you. So now I know that credit does not change much if my SIN number does not change. This is useful information. I also got into another deal in cash because I did not want to waste time trying to get a loan for the sake of building credit.
Deal Guru
User avatar
Jul 12, 2003
12176 posts
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Toronto
Embrace wrote: Just wanted to do an update. As everyone has advised, this is terrible business conduct, so I have decided not to do business with them. And I also happened to find a very sweet deal at another dealer, so I have proceeded with this new dealer, and in cash. I was upfront this time that I did not expect any surprise fees, and that I did not want to waste more time. The process was very quick and smooth, as they knew I could easily walk away.

I thank all of you for your confirmation.


Thank you for your advice. I wrote them an email asking for a full refund, while listing their actions which implicitly implied that they were lying. Shortly afterwards, they called me and said they would process a full refund. I dodged a bullet, and your response helped me be scratch-free.

Good job.

How did you get the other deal in cash,
Did you just bought the car or put a bigger downpayment or security deposit?
Retired Forum Moderator February 2009 - June 2015
Deal Addict
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Feb 17, 2015
1076 posts
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Canada
One word: SHAMELESS
Embrace wrote: I wrote them an email asking for a full refund, while listing their actions which implicitly implied that they were lying. Shortly afterwards, they called me and said they would process a full refund.
Deal Addict
Aug 17, 2008
1308 posts
766 upvotes
Embrace wrote: Just wanted to do an update. As everyone has advised, this is terrible business conduct, so I have decided not to do business with them. And I also happened to find a very sweet deal at another dealer, so I have proceeded with this new dealer, and in cash. I was upfront this time that I did not expect any surprise fees, and that I did not want to waste more time. The process was very quick and smooth, as they knew I could easily walk away.

I thank all of you for your confirmation.

Thank you for your advice. I wrote them an email asking for a full refund, while listing their actions which implicitly implied that they were lying. Shortly afterwards, they called me and said they would process a full refund. I dodged a bullet, and your response helped me be scratch-free.
With the misleading actions of the first dealer, I was absolutely certain that you could get as good or better deal from another dealer. Good that you didn't give the original dealer your business. But why are you not naming the dealer as a warning to others. They should get negative feedback for their misleading tactics.
[OP]
Newbie
Oct 4, 2020
14 posts
8 upvotes
MP3_SKY wrote:

Good job.

How did you get the other deal in cash,
Did you just bought the car or put a bigger downpayment or security deposit?
The new dealer agreed to match the price, but when I went there I found a used but essentially new with great price. So I went ahead to buy it in cash.
multimut wrote: With the misleading actions of the first dealer, I was absolutely certain that you could get as good or better deal from another dealer. Good that you didn't give the original dealer your business. But why are you not naming the dealer as a warning to others. They should get negative feedback for their misleading tactics.
I am waiting until I see the refund posted on my card first.
Sr. Member
Oct 21, 2006
790 posts
540 upvotes
this sounds like a stunt that DON VALLEY NORTH Toyota would pull... I hope I'm wrong.
Newbie
Apr 17, 2015
52 posts
59 upvotes
Edmonton, AB
No, it is not true that you need the extended warranty to qualify.

I would never put any money into a lease.
Penalty Box
Oct 5, 2008
1227 posts
88 upvotes
superX wrote: No, it is not true that you need the extended warranty to qualify.

I would never put any money into a lease.
This is a month and a half old thread where the question was answered and the issue was resolved.
Newbie
Apr 17, 2015
52 posts
59 upvotes
Edmonton, AB
JohnEnglish wrote: This is a month and a half old thread where the question was answered and the issue was resolved.
And yet here you are.
Deal Fanatic
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Jan 16, 2011
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The NORTH
superX wrote: And yet here you are.
Because when you necro an old thread it pops up on New...

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