Former Orangeville Mazda Dealership Fined for Selling Car for $25K More Than It Was Worth

Update: see previous posts – May 9, 2010 Taking Advantage of Consumers, March 31, 2009 The Motor Vehicle Dealers Act (MVDA) effective January 1, 2010

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Madeline Leonard paid $66,000 for a 2010 Mazda6 that Ontario's auto regulator says was worth closer to $41,000. STEVE RUSSELL/TORONTO STAR

An Ontario court has slapped a former Mazda auto dealership in Orangeville with $10,000 in penalties after the store pleaded guilty to committing “an unconscionable representation” by selling a car to a woman for more than $25,000 above its real value.

A judge with the Ontario Court of Justice fined Orangeville Mazda $8,000 plus about $2,000 in victim compensation costs on Friday following entry of a guilty plea by a dealership lawyer to the charge under the Consumer Protection Act.

Orangeville Mazda and two employees faced charges of “engaging in unfair practice by making an unconscionable representation,” in March 2010 after an investigation by the Ontario Motor Vehicle Industry Council, which regulates new and used car dealers.

Sale documents showed the dealership had sold an unemployed woman living on a disability pension a 2010 Mazda sedan for about $66,000 including taxes and a trade-in car. But the probe found she should have paid less than $41,000.

The council’s investigation indicated the dealership under president Sunny Bains approved a seven-year loan with a final payment of more than $7,000 when the woman did not qualify because of her personal financial status. Furthermore, the dealership sold several extra products and services for more than double normal prices.

Mazda Canada quickly terminated the dealership’s sales and service agreement for breaching the automaker’s business practices in the deal and other incidents. The move effectively shut down the store’s operations. Mazda also unwound the deal with the woman and compensated her.

The province’s Licence Appeal Tribunal revoked the dealership’s registration. In addition, the tribunal suspended the registration of the two senior store employees.

Charges against the dealership’s manager Mohammed (Moe) Shaikh and employee Kien Trung at the time remain before the courts.

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  4. Well, “the probe found she should have paid less than $41,000.” I agree? The Mazda6 in the photo is 25,000$ MSRP for 2012.

    There’s about a dozen Mazda dealerships in the GTA. There are many more non-mazda dealerships with similar (and better) vehicles. The website, advertisements, commercials, and maybe even the sticker on the car would say the exact MSRP. Anyone with a passing knowledge of the brand or type of car would know an approximate price.

    I understand if Mazda wants their brand name off the dealership; it reflects badly on their authorized dealerships when a price is overinflated and a purchaser doesn’t qualify for an approved loan.

    Still, it is legal to charge too much — happens legally all the time, often for exponentially more money. She had had adequate access to the market, and didn’t check prices. It sounds as if the negotiated price was understood by both parties. She was negligent in not looking for the commonly accepted market price (she didn’t shop). What’s more, she tried to buy a $66,000 car with no income while on disability (an inability to work); of course a loan on that security won’t be average.

    There has to be more to the story, like actual fraud or a mental disability. At least with the car taken away she won’t be driving towards you.

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