Buying a car? Why you may have to pay more at some dealers if you use cash

It used to be cash was king and that you could get a better deal if you paid for a car in full, but now many dealers want you to finance your purchase so they can make more money.

It used to be cash was king and that you could get a better deal if you paid for a car in full, but now many dealers want you to finance your purchase so they can make more money.

While in Ontario dealers must use "all-in-price-advertising," meaning the price you see is the price you get, some car dealers aren’t following the rules.

"There is a huge incentive for dealerships to get the consumers to finance the car and if they get paid cash for the car, the dealership could be missing out on a lot of profit,” said Shari Prymak with Car Help Canada, a non-profit group that helps buyers with car purchases.

When you see car ad, some dealers show two prices, a cash price and a finance price. In many cases, the cash price can be $2000 to $3000 higher.

The Used Car Dealers Association of Ontario (UCDA) said selling a car this way is allowed as long as the pricing in the ad is clear and transparent.

"It's not illegal for a dealer to sell a vehicle for a cash price that’s at a different level than a financed price, but as the Ontario Motor Vehicle Industry Council (OMVIC) has indicated, it really comes down to disclosure,” said James Hamilton, executive director of the UCDA.

In a statement OMVIC told CTV News, “As the regulator for motor vehicle sales in Ontario, our role is to ensure registrants strictly adhere to all-in price advertising. Car buyers should be able to walk into a dealership and buy the vehicle for the exact price that is noted in the ad (except HST and licensing). Dealers offering pricing options for finance and cash purchases are required to disclose both prices in their ads, in a clear, comprehensible and prominent manner, not hidden below, on a different page or tab or in fine print."