My Experience with 401 Auto Financing

In late October 2023, I visited 401 Auto Financing’s Kitchener branch, hoping to secure a car loan. Being a newcomer to Canada, my financial history was still in its infancy, and traditional banks were unwilling to offer me a loan. That’s when I met Jas Khuranna, the sales/finance manager, who seemed empathetic and eager to help. He presented a loan from Axis Finance with a staggering 26.82% interest rate. Given my situation, and the urgent need for a vehicle for my family, I reluctantly accepted.

The Pressure to Purchase

Jas presented me with a 2017 Chevrolet Spark, emphasizing that I needed to act fast as the loan approval hinged on quick action. Despite my repeated requests for photos, he avoided sharing any, reassuring me that the car was in good condition with a clear Carfax report. His urgency left me feeling cornered, and I signed the paperwork without ever seeing the car.

On September 21, 2024, I finalized the deal. Still, the car wasn’t at the Kitchener location. Jas convinced me that everything was fine, even stating that a car warranty was mandatory for loan approval, a fact I later learned was false.

Delivery Shock

When I finally arrived at the Kitchener dock to pick up the car, I was horrified by its condition. The vehicle was filthy, covered in dust, with visible damage to the windows and body. To top it off, it only came with one key, something I hadn’t been informed of. Jas was nowhere to be found, and I was assigned a new point of contact (POC). I refused to accept the car in its state and escalated my concerns, only to be told that canceling the deal would result in significant financial penalties.

Escalation to the CEO

Desperate, I reached out to Jim Rose, the CEO of 401 Auto Financing, through LinkedIn. He connected me with Christina, the Customer Success Manager, and Chris Parnell, the General Manager of the Kitchener showroom. They promised to address my concerns, including the car’s condition and the missing second key. However, after a week, I picked up the car only to find that the issues were barely addressed.

The Trade-In Scheme

After 7 months of regular payments, I was offered a trade-in for a better deal by Kyle White, the GM of the Cambridge showroom, and Ali Hammoud, the sales manager. However, the trade-in value of my car had plummeted to $6,000—less than half of what I had paid. The only option offered was a high-mileage Hyundai Santa Fe with a bi-weekly payment of $360, further worsening my situation.

Summary of Complaints

1. Concealment of the Vehicle’s Condition: The car’s true state was hidden, and pressure tactics were used to rush the sale.
2. Misleading Information on Warranty: I was falsely told a warranty was mandatory for loan approval.
3. Delays in Servicing: Deliberate delays left me with no choice but to continue with the purchase.
4. Missing Key: Despite multiple follow-ups, the second key took over three months to arrive.
5. Undisclosed Penalty for Switching Lenders: Penalties for switching lenders were hidden, restricting refinancing options.
6. False Promises of a Trade-In: The trade-in scheme was a ploy to exploit me further, with an unreasonably low offer.
7. Excessive Depreciation: The car’s value depreciated sharply within 6 months, raising questions about fairness.

Resolution Requested

To resolve this matter, I request the following:

• Revaluation of the Trade-In Value: An external, unbiased appraisal to ensure a fair trade-in price.
• OMVIC Supervision: Involvement from OMVIC to oversee a transparent and ethical trade-in process.
• Reasonable Trade-In Offer: A 2022 or newer model with fewer than 90,000 km and bi-weekly payments not exceeding $270.
• Loan at Prime Interest Rate: A loan with a prime interest rate, as initially promised.
• Refund of the Warranty Payment: A full refund for the car warranty that was sold under false pretenses.

This experience serves as a warning for others to exercise caution when navigating car financing, especially when faced with high-pressure tactics and misleading information.