So, you’ve finally gotten enough cash in your piggy bank to buy your dream car or motorcycle outright.

But there’s just one hitch – the dealership and/or agent won’t sell it to you unless you buy it through financing at a much higher cost, as many of our readers have reported to AutoFun Philippines.

Financing schemes allow dealers to get more profit from a unit because of the higher total price, which includes interest rates. AutoFun Philippines reported the extreme levels of this practice with certain buyers of the 2023 Honda Civic Type R.

The Department of Trade and Industry (DTI) said you can file a complaint against these entities under Administrative Order (A.O.) 21-03.

“The consumer must file a complaint informing DTI that a dealer is not accepting cash payment for a motorcycle or car,” the DTI Consumer Protection Group told AutoFun Philippines.

“The complainant must also give the name of the person from the dealer,” the agency added. “Minsan, sabihin ng company na [Sometimes, the company says that] it's not their policy, so it’s better to get the name to identify na nandun talaga yung agent [that the agent is really there].”

The agency said consumers may call the DTI through its official directory or send an email to the DTI Fair Trade Enforcement Bureau at fteb@dti.gov.ph.

As a rule, make sure to save screenshots, posts and documents from the errant agent and/or dealer.

AutoFun Philippines also reported on other ways that you can combat illicit dealership practices.

Nearly 2 years in force

A.O. 21-03, which was issued on March 2021, states that “no person or company engaged in the sale or offer for sale of consumer products and services shall impose an ‘INSTALLMENT ONLY’ mode of payment to consumers.”

“Consumers shall be given the option to pay in cash, in installment or a combination thereof,” the document added.

In addition, vendors or dealers are not allowed to increase the price if the straight-cash payment was done through electronic means like debit cards, credit cards, bank transfers and QR codes.

The DTI noted that even if the sale didn’t push through, the mere denial by the dealer and/or agent constitutes a prima facie (fancy legal speak for “on its face”) violation of the A.O. and can serve as grounds for a complaint.

Violators face jail time, fines

The DTI said when it receives a complaint, it will visit the establishment to validate it.

It added that it has already received and processed complaints about vendors who refused straight-cash purchases.

“When dealers have transactions with the DTI and may nakita na may [we see that there is a] violation, then we hold the processing,” the DTI said. “We inform the establishment that they must comply.”

Dealers who don’t follow the government’s regulations will face penalties under Republic Act 7394 or the “Consumer Act of the Philippines,” which dates back to 1992.

Under Article 60 of the law, this includes a fine of ₱500 to ₱10,000 and/or imprisonment of five months to one year.

Which dealers have been trying to sell you a car strictly under financing?