Photo: American Honda (Honda US Newsroom). 2026 Honda Civic.
Most Ontario car buyers finance through the dealer. The dealer submits your credit application to one or more lenders, brings back offers, and you sign with whichever looks best. Behind the scenes, the dealer is being paid a commission by the lender — sometimes called a reserve or kickback — and the size of that commission varies by lender.
OMVIC's financing-disclosures page is explicit: dealers must be honest about that commission. The bill of sale has to disclose it. If a dealer is steering you toward a higher-rate loan because the commission is bigger, that's a problem. Not always illegal — but you have a right to know, and you have a right to ask for the better rate the dealer knows you qualify for.
How dealer-arranged financing actually works
A dealer who arranges your financing is paid two ways: you pay the interest rate on the contract, and the lender pays the dealer a commission built into that rate. The commission is part of the interest rate — it's not on top of it. A 7.99% loan might carry a 2-3% reserve to the dealer; a 4.99% loan might carry 0.5% or none.
When the dealer submits your credit application to multiple lenders, each lender comes back with an offer at a different rate. Each offer has a different commission. The dealer's job, in principle, is to find the best rate for you. The dealer's incentive, in practice, is sometimes to recommend the offer with the largest commission. Those two goals don't always line up.
What OMVIC requires the dealer to disclose
- The bill of sale has to disclose that the dealer or salesperson received a commission from the lender for arranging the loan
- The dealer has to be honest about the available financing options you qualify for — they can't hide a better rate to steer you to a higher-commission one
- MVDA Section 6 and the Consumer Protection Act both require honesty, integrity, and truthfulness in describing products, services, and prices related to a vehicle trade, including financing
- Multiple credit applications can hurt your credit score — the dealer should ask which lenders they intend to submit to
Photo: American Honda (Honda US Newsroom). 2026 Honda Civic.
The questions to ask before you sign the finance contract
- Which lenders did you submit my application to?
- What rate did each lender offer?
- Which option are you recommending, and why?
- What commission does the dealer earn on each option?
- If I'm pre-approved with my own bank or credit union, can you beat that rate?
- Is there an application fee, and is it refundable if the deal doesn't close?
How to pressure-test the financing on your own
Before you visit the dealership, contact your own bank or credit union. Ask what rate and term they can offer you for the same vehicle. That gives you a real comparison point for what the dealer brings back.
Pull your own credit score from Equifax or TransUnion. The score the dealer sees is what determines the rate you're offered, but it's worth knowing it yourself so you can challenge an unexpected offer.
When the dealer comes back with the rate, ask specifically which lender it came from. If they won't say, that's a signal that something is being hidden. The MVDA doesn't require the dealer to volunteer the rate of every other offer you qualified for — but they can't lie if you ask.
When the dealer is steering you — and what to do
OMVIC's framing is direct: a dealer may know you qualify for a lower rate elsewhere but steer you toward a higher-rate loan because the commission is bigger. That's not illegal per se, but it's deceptive if the dealer knows a better offer exists and doesn't tell you.
If you believe that's happening, the practical steps are: ask for the rate sheet for all the lenders your application was submitted to, compare against your own bank's pre-approval, and if the dealer won't engage, walk away. If you believe the dealer knowingly withheld a better offer and you signed at a higher rate, OMVIC's complaint process is the path.
Frequently asked, Vaughan edition
Does Honda Financial Services pay the dealer a commission?
Yes. Honda Financial Services pays dealers for arranging financing through them — the industry calls this a reserve, and it's built into the rate. The MVDA requires the dealer to disclose that commission on the bill of sale.
Is dealer-arranged financing usually more expensive than going to my own bank?
Not necessarily — sometimes dealer rates match or beat bank rates, particularly on manufacturer finance promotions. The reason to compare against your own bank is to verify the dealer is offering the best option you actually qualify for, not just the option that pays them the most.
Can I refinance a dealer-arranged loan later if I find a better rate?
Yes. Refinancing is allowed at any time on an open loan, and on a closed loan after the prepayment penalty period. Many buyers use their own bank's pre-approval as a benchmark and refinance if the dealer-arranged rate ends up higher than expected.
Want me to walk through the OMVIC piece of your next deal?
If you have a quote from another store, a private sale you're considering, or just a question about how OMVIC's rules apply to your situation, send me the details. I will help you pressure-test the structure.