CFLA reduces risks for auto lessors
Scott Long - August 25, 2022 - Featured Content Area
The CFLA successfully advocated for the BC Government not to include leased vehicles in its Civil Forfeiture Program.
The issue
In June, the CFLA learned that British Columbia (BC) planned to include leased and financed vehicles in the Civil Forfeiture Act (the Act).
BC’s Civil Forfeiture Office uses the Act to seize and sell assets that were used for illegal purposes.
A risky and costly impact
Finance companies – the legal owners of leased vehicles – would lose their assets to the province if a lessee used their vehicle for an illegal purpose. The program would not allow lessors to reclaim seized vehicles or rely on existing liens. Instead, the province would sell the seized asset, and lessors would only receive funds after administrative and cost recovery charges are paid to the province. This would cause a significant financial risk to finance companies operating in BC, especially with high inflation and residuals.
The program also adds unnecessary costs and uncertainty to lessors because less than 1% of new vehicles sold yearly would be captured by proposed changes. British Columbians purchase over 200,000 new vehicles annually on average. Typically, only five to 10 vehicles per month would be captured by the proposed changes to the Civil Forfeiture Act.
Our advocacy efforts
CFLA Board Chair Mike Rusch of JP Group, Co-Chairs of the Auto Finance Working Group Committee (Diana Galassi of Toyota Credit and Anthony Ruffolo of Honda Canada), and our advocacy team led efforts to oppose these changes to the Act.
We met with the BC Government several times to explain how leased vehicles posed an unfair risk to finance companies and would be an unfair, costly, and unnecessary measure to undertake across the entire motor vehicle sales industry, given the small number of vehicles seized by the Civil Forfeiture Office.
Outcome
After several meetings with the Director of BC’s Civil Forfeiture Office, at the end of July, the BC Government confirmed they would remove leased vehicles from this regulatory expansion– significantly reducing the cost and potential risks for our members.
More information
Get in touch with Marcel Buerkler, CFLA Director of Policy ⇒