If you have financed your vehicle purchase through the merchant, it is likely an instalment sale. Three situations may arise if you do not make your payments on time.

If you do not make your payments

The merchant with whom you have a contract could:

• demand that you make the late payments;
• repossess the vehicle, if you do not make the late payments within 30 days of receiving a notice of repossession;
• use a clause called "forfeiture of benefit of the term," if it is included in your contract. This clause allows the merchant to demand the immediate repayment of the outstanding amount. You can, within 30 days of receiving a notice of forfeiture of benefit of the term:
  • make the late payments, or
  • file a motion in court to request permission to return the vehicle or to have the payment terms changed.

Sale of the vehicle

You cannot sell a vehicle subject to an instalment sale before it has been paid for in full, unless you have received the creditor’s authorization (for example, the financing company).

Changes in the financing terms

The merchant or financing company could contact you after the contract has been signed to inform you of an error. This error means that the credit rate or the instalment amount will no longer be what was indicated. As a result, the financing company refuses to honour the credit contract. This situation is rare, but unfortunate.

Keep in mind that the financing company’s refusal to honour the contract has no impact on you. Normally, the dealership will have to honour the credit contract.

Loan calculations

You can use a calculator to determine certain amounts, such as the monthly payments or the interest rate.