Do you think a merchant is making misleading advertising or giving false information? Here is what you need to know.
Advertisements that contain false or misleading information, or omit important facts, are illegal.
Examples of prohibited practices
For example, it is prohibited for an advertisement to:
- announce that a major discount will be granted without mentioning that certain conditions apply in order to receive it (e.g. being the owner of a vehicle from the same manufacturer, or purchasing an optional accessory);
- state that interest free financing is available without mentioning the applicable credit rate, if a discount is granted to consumers who pay cash. This discount constitutes a credit fee. The credit rate is truly 0% when the price of the vehicle remains the same whether it is financed or paid in cash;
- indicate only the amount of the monthly instalments in an advertisement about credit, without stating the total price of the vehicle;
- use an illustration that does not accurately depict the vehicle whose price is advertised;
- use the expression "cost price" or any other expression that would lead one to believe that the vehicle is sold at such a price, if it does not make reference to the price actually paid by the merchant to acquire the vehicle;
- present information about the vehicle in a manner that is unclear, illegible or incomprehensible. For example, this could mean using a font size that is too small to be read or using terms that limit the scope of an important piece of information in the message.
The vehicle sold must comply with to the advertisement made about it. The merchant is bound by this advertisement.
Merchants advertising the price of a vehicle are required to advertise an "all inclusive" price.
What is an "all inclusive" price?
The "all inclusive" price corresponds to the total amount you will have to pay to obtain the vehicle advertised. It cannot be raised, unless other products or services are added at your request.
This rule applies everywhere, in all types of advertising: newspapers or flyers, on billboards, on television, on the radio, on the Internet, etc.
If the merchant charges you a price that differs from the advertised price, you are entitled to demand to pay the advertised price.
Fees included in the price
The advertised price must include:
- new vehicle transport, preparation and delivery fees;
- the excise tax on air conditioners;
- administration fees.
You cannot avoid paying these fees: they must therefore be included in the advertised price.
Fees excluded from the price
Merchants may exclude from the advertised price fees that you must pay, but that will later be remitted to a public authority. This is the case for:
- Quebec sales tax (QST);
- the goods and services tax (GST);
- the specific duty on new tires.
Composition of the advertised price
The items that make up the advertised price must be indicated. However, the total price of the vehicle must be mentioned in a clearer manner than the items included in the price.
When financing is offered, credit fees are generally charged. Merchants are not obligated to include these fees in the advertised price, which is in fact the cash price of the vehicle.
Is a merchant advertising the terms of an automobile instalment sale contract (i.e. the merchant offers that you pay for an automobile, for a fee, in several payments)?
If the advertisement includes any of the following points, it must also mention all of the others:
- an example of the total price of an automobile for which credit may be authorized;
- the down payment charged at purchase, or an indication that no down payment is required;
- a breakdown of the credit charges;
- the total credit charges;
- the number of instalments and the length of the instalment periods;
- the amount of each instalment;
- the consumer's total obligation.
Interest rates and credit rates
Any ad that makes reference to a credit rate must indicate that rate.
Any time a credit-related rate (e.g. an interest rate) is indicated in an advertisement, the credit rate calculated in accordance with the Consumer Protection Act must be disclosed just as prominently. An advertisement may, however, only indicate the credit rate.
The interest rate is an indication, expressed as an annual percentage, of the interest paid on the amount financed.
The credit rate calculated in accordance with the Consumer Protection Act is an indication, expressed as an annual percentage, of the total of all credit fees charged by virtue of the credit contract, including: interest, administration fees, etc. It is the true cost of the credit.
Merchants who make false or misleading declarations are committing an illegal act. They are required to provide all the information that could influence your decision to purchase a vehicle.
A merchant cannot, for example, lead you to believe that:
- the vehicle warranty covers more than what it does in actual fact;
- the vehicle is more powerful or better performing that it really is.
Although this situation is rare, merchants have been known to conceal information. If you were aware of the information, it could dissuade you from purchasing the vehicle that interests you.
If you are a victim of false or misleading declarations, you have recourse against the merchant. See If there is a problem for more details on this subject.
Reporting a merchant
If you find yourself in a situation in which these rules are not respected, you can contact the Office de la protection du consommateur to report them.
Last update : February 28, 2023
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The information contained on this page is presented in simple terms to make it easier to understand. It does not replace the texts of the laws and regulations.