The purchase of a new vehicle can only be cancelled in certain cases. Whether or not you can cancel depends on how you are paying for the vehicle.
Purchases financed through the merchant
If you are to pay for the vehicle in several instalments but have not yet signed the instalment sales contract (the financing contract), you are often considered only to have received the merchant’s offer. You have therefore not made any commitment and have the right to decide not to accept the offer. You will not have to pay any fees.
Once you have signed the financing contract, you have 2 days to cancel it, providing that you have not taken possession of the vehicle. This period begins when both you and the merchant are in possession of a copy of the contract.
For a "high-cost" instalment sales contract (which has an annual credit rate that exceeds the Bank of Canada's Bank Rate by 22 percentage points), the applicable deadline is 10 days. Refer to the page that deals with cancelling a high-cost credit contract for details.
If you cancel your instalment sales contract within the prescribed deadline, the merchant may not send any information on this subject to credit assessment agents (businesses such as Equifax or TransUnion). Nor can the merchant send them any information concerning the amounts that can no longer be collected because you have cancelled the contract.
Vehicles paid in cash or with a personal loan
If you have paid for a vehicle in cash or with a personal loan from your financial institution but refuse to take possession of the vehicle, it is often too late to change your mind without consequences once the purchase contract has been signed.
The merchant may have the right to impose a penalty, according to a clause sometimes found on the back of the vehicle purchase contract. These fees are limited by regulations. They may not exceed the higher of these 2 amounts: $400 or 2% of the price of the vehicle.
If this clause is not provided on the back of the contract, the merchant may demand that you respect the contract (that you purchase the vehicle) or pay compensation for the actual losses suffered by the merchant. The merchant could, for example, ask you to pay the interest charges for the additional month the vehicle remained for sale. It is also possible for the merchant to insist that you honour your commitment and take possession of the vehicle.
Last update : February 10, 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.