So this is how they will enforce flipping vehicles-$1.00 Lien

[ecotourist]

Here's another way to deal with price differentials on new vehicles: When Subarus were cheaper in the US than in Canada (after factoring in the exchange rates) , US dealers wouldn't sell them to Canadians at all.

My secretary bought a new Forester in the US but it was one of the last. Had to have a couple of modifications before it could be imported into Canada - daylight running lights and maybe one other.

 

[IndyIan]

Here's another way to deal with price differentials on new vehicles: When Subarus were cheaper in the US than in Canada (after factoring in the exchange rates) , US dealers wouldn't sell them to Canadians at all.

My secretary bought a new Forester in the US but it was one of the last. Had to have a couple of modifications before it could be imported into Canada - daylight running lights and maybe one other.

My buddy bought 2 subaru's down in the states, maybe 2006ish? At that time subaru of america would even warranty it with work done at a private shop. I guess subaru canada made enough stink to change that eventually, but its not very often US vehicles are cheaper enough to bother importing.

 

[Blinker]

This is one of the scummiest things I’ve heard of. Car dealers scum scandals never cease to amaze me.

 

[Kestas]

The dealer (or manufacturer) should sell at market value and not worry about what happens to their vehicle afterward. I believe I see an analogy to rent control with this agreement.

 

[Pew]

Seems pretty scummy. Regardless of it being in the contract, it seems more like the dealers are complaining about it to GM, who had to do something about it because they aren't making as big as profit selling the car compared to the first owner selling it to the second owner.

 

[Wolf359]

The dealer (or manufacturer) should sell at market value and not worry about what happens to their vehicle afterward. I believe I see an analogy to rent control with this agreement.

Rent control is imposed by the government on two parties that may not agree with it. In this case, the limitation is imposed by the manufacturer and it has the right to do whatever it wants just like the party buying can decide not to buy if it doesn't like the terms. It's another thing to try and change the terms AFTER you've already agreed to them.

I would also think he could get around it by simply PAYING the $1 "lien".

That doesn't get you around it if they don't release the lien or they wait the full year before releasing the lien.

 

[CKN]

I would also think he could get around it by simply PAYING the $1 "lien".

Apparently he has to wait a year to pay off the outstanding ($1) amount.

 

[CKN]

What if the vehicle in question is a total lemon and the manufacturer is dragging its feet? Canada lemon laws are basically useless. Basically the customer isn’t able to trade out of it because some childish nonsense that the dealer put into the contracted to keep their feelings from being hurt.

You bring up a good point-could he trade the vehicle in to another GM dealer and buy something else and would the lien be waived? Is there contract language to that effect? We don't know.

 

[Oillover]

The comments section is interesting.

I agree. A lot of interesting comments that shed light on the situation

 

[Wolf359]

I think its so the dealer gets the points on a loan when financing

The clawback provisions in a loan is typically just 2-3 months, maybe 6 months at worse, not a year.

 

[wag123]

Frankly, I don't understand why a dealer should care about what a customer does with their vehicle after they get their money. If I were a dealer, I certainly wouldn't want a potential long-term customer mad at me because I did this. I would sell any customer as many vehicles as they want to buy as long as they are paying me my price. On the buyer's side, I would walk if they tried to do this to me.

 

[Wolf359]

Frankly, I don't understand why a dealer should care about what a customer does with their vehicle after they get their money. If I were a dealer, I certainly wouldn't want a potential long-term customer mad at me because I did this. I would sell any customer as many vehicles as they want to buy as long as they are paying me my price. On the buyer's side, I would walk if they tried to do this to me.

Well it's achieving the purpose they set then, people who don't want to agree won't buy so less demand. Flipping and price gouging isn't considered good for the brand long term. People who flip aren't loyal to the brand. Manufacturers don't need those people. And the flippers are making a profit that the manufacturer isn't making. The flippers are basically the same as scalpers. Most people hate scalpers, they just drive up the price for everyone else but maybe they help balance supply and demand.

 

[CKN]

Well it's achieving the purpose they set then, people who don't want to agree won't buy so less demand. Flipping and price gouging isn't considered good for the brand long term. People who flip aren't loyal to the brand. Manufacturers don't need those people. And the flippers are making a profit that the manufacturer isn't making. The flippers are basically the same as scalpers. Most people hate scalpers, they just drive up the price for everyone else but maybe they help balance supply and demand.

I went by a Ford dealer and they had one new F-150 with a market adjustment. I very nicely explained to the sales woman that if I were to pay a market adjustment it would be for a Toyota Tundra-something I am sure will last until there was an equilibrium on the resale where I could get out of it if I chose to.

BTW-she quoted 24 months is when they feel they will actually have some inventory on their lots.

Above MSRP is the same as scalping-IMHO.

 

[Wolf359]

I went by a Ford dealer and they had one new F-150 with a market adjustment. I very nicely explained to the sales woman that if I were to pay a market adjustment it would be for a Toyota Tundra-something I am sure will last until there was an equilibrium on the resale where I could get out of it if I chose to.

Above MSRP is the same as scalping-IMHO.

It's almost as bad, but at least it's not some random 3rd party that steps in between the transaction and pockets the difference while providing nothing. When the dealer does it, you can punish them by not doing business with them again. Can't do that with a scalper. Or only way to do it with a scalper is not to buy from them.

 

[Job]

Car makers don’t like dealers scalping either. I would like to see that stopped too. Msrp is already a tidy profit. That’s full list price.

 

[Pelican]

There was a recent thread about the Ford Lightning and the owner of the new vehicle not being able to resell it for 12 months. I brought up how are they going to enforce it-this is how GM is apparently doing it-

The GM dealer in Canada put a $1.00 lien of the vehicle so the owner could not resell it in the first year of ownership. Will other manufacturers follow?

https://gmauthority.com/blog/2022/02/gmc-yukon-owner-cant-sell-vehicle-because-dealer-has-1-lien-on-it-video/

Then all one has to do is pay off the $1.00 lien, doen't seem much of a deterrent to me.

 

[Wolf359]

Then all one has to do is pay off the $1.00 lien, doen't seem much of a deterrent to me.

As I mentioned before, it's not paying off the lien, it's getting the discharge. They don't give you the discharge on the lien. So when you sue to get the discharge, they have counter claims that it's not supposed to be sold til after a year and you lose.

 

[researcher]

What no one has mentioned here is the most simple. How can a dealer put a lien on a car that is most likely under the ownership of the new lending company. So are we saying that the dealer has a financial tie to the lending company who created the loan? Then ok, they could put a lien on it. But let's say it's your own bank that provided the auto loan, they now own the vehicle and the dealer couldn't even try a lien.. they've sold the vehicle to your bank!

 

[Wolf359]

What no one has mentioned here is the most simple. How can a dealer put a lien on a car that is most likely under the ownership of the new lending company. So are we saying that the dealer has a financial tie to the lending company who created the loan? Then ok, they could put a lien on it. But let's say it's your own bank that provided the auto loan, they now own the vehicle and the dealer couldn't even try a lien.. they've sold the vehicle to your bank!

It's simple, you can have multiple liens on a property. The dealer would be in 2nd lien position so if the bank took the car back, their 2nd lien position would be wiped out. Your whole scenario basically doesn't make any sense because it assumes that there can only be one lien. All they have to do is write it up in the paperwork, sale price is $1 more than you paid and it's recorded as a second lien. You have to satisfy all the liens on a property before they issue a new title.

 

[researcher]

It's simple, you can have multiple liens on a property. The dealer would be in 2nd lien position so if the bank took the car back, their 2nd lien position would be wiped out. Your whole scenario basically doesn't make any sense because it assumes that there can only be one lien. All they have to do is write it up in the paperwork, sale price is $1 more than you paid and it's recorded as a second lien. You have to satisfy all the liens on a property before they issue a new title.

thanks Wolf.. I get it now.. still a sleazy move and people wonder why there's so much talk of the dealership model going away!