Law 72: “Balloon” loans under dealer monitoring

Bill 72 has not shaken Quebec car dealers even though they should be more transparent with their customers when they buy a new vehicle. The complete opposite.

In a message that appeared to be written by the government, the Corporation of Quebec Automobile Dealers (CCAQ) announced on Friday that it was adopting a new certification for its members that must respect the “standards of quality and maximum exposure” of sales. habits.

This is the culmination of a year of work between the CCAQ, the government and the Office for Consumer Protection (OPC).

“It’s a cultural change,” said CCAQ President and CEO Ian P. Sam Yue Chi. We want the producers to have a different culture.

“It is a certificate based on reliability, integrity, knowledge and kindness. We want customers’ needs to be met.”

In addition, a disciplinary committee will be established at the CCAQ for the management of problematic cases.

“This will be done in collaboration with the OPC. This will be used to receive complaints from customers, vendors or competitors. We will also be proactive with audits and customer confidentiality to ensure that standards in the field are respected. ”

To return to Bill 72, the head of the CCAQ did not fall off his chair when it was announced. Over the past year, they have had several discussions with the government regarding the concerns of its members and customer relations.

“We agree with the bill because it fills the legal gap that existed regarding negative equity (“balloon loans”),” he said.

What is a “balloon” loan?

The “balloon” loan is a practice that has been around for many years. It can add up to a bill of several thousand dollars when a customer has a negative balance when they trade in their vehicle.

For example, he wants to buy a car for $50,000 from a dealer. His commercial vehicle is worth $25,000, but his bank loan balance is $30,000. The difference of $5,000 is then added to his sum of $50,000. That means the customer’s financing for their vehicle will be $55,000.