Consumer Alert: High Interest Bank Loans For Motor Vehicles
January 10, 2014
There have been recent media reports of consumers who have complained of being misled into signing high interest bank loans for vehicles that have left them paying over double the price of their vehicle. Don’t let this happen to you.
If you are taking out a loan to buy a new or used vehicle, be sure you completely understand the terms of the agreement - including the interest rate you’re being offered and the total cost of borrowing - before you sign the contract. Be cautious of long-term loans with high interest rates that will take many years to pay. In some cases, you could end up paying much more than the value of the vehicle.
A smart tip is to figure out the total amount of interest you will be paying by the time your loan agreement ends. Comparison shopping for financial terms can prevent you from owing more on the vehicle than it’s worth. It is important to not let your need for a vehicle outstrip your budget. Don’t be afraid to ask questions. And if you don’t feel you’re getting clear answers, your best bet may be to walk away.
The Ontario Motor Vehicle Industry Council (OMVIC), protects consumers under the Motor Vehicle Dealers Act and provides information and resources for consumers when dealing with complaints. OMVIC can be reached toll-free at 1-800-943-6002 ext. 5105.