The purchase of a used vehicle can only be cancelled in certain cases. Your ability to cancel depends on how you pay for the vehicle.
If you have not yet signed the instalment sales contract (the financing contract), you are often considered to have received only the merchant’s offer. You have thus not entered into any agreement yet. You are entitled to refuse the merchant's offer, and you will not have to pay any fees.
Purchases financed through the merchant
If you plan to pay for the vehicle in several instalments, you are most likely entering into an instalment sales contract. Once the contract is signed, you have 2 days to cancel it. This period begins when both you and the merchant are in possession of a copy of the contract.
If the vehicle was delivered to you when you received a copy of the contract, you have 2 days to return the vehicle to the merchant. You lose this cancellation right if, through your own fault, you cannot return the vehicle in the state in which it was delivered to you.
If the vehicle was not delivered to you when you received a copy of the contract, you must send a written notice to the merchant within 2 days.
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 (in French only) 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 by 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 greater of these 2 amounts: $400 or 2% of the price of the vehicle.
If this clause is not listed on the back of the contract or does not respect the amounts specified in the regulation, the merchant can expect you to 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 on the lot available for purchase.
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.