Agreement contained no reference to credit for mileage below permitted maximum

Categories:

Advice & information, Lending,

Summary:

Ralph took out a loan with the bank in March 2022 to buy a new vehicle. As part of the loan contract, he signed a guaranteed future value agreement. The agreement allowed for lower monthly payments over four years, with a final so-called “balloon” payment of $21,000 payable at the end. There was also the option to sell the vehicle back to the dealership for that same amount (“the guaranteed future value”), to trade it in, or to refinance the $21,000 into a new loan. These options were subject to various conditions, including a maximum mileage of 75,000 kilometres.

Published:

November 2025

In August 2025, Ralph told the bank he intended selling the vehicle back to the dealership and asked for the guaranteed future value to be reassessed based on an expected mileage of 35,000 kilometres. The bank said it could not do that, citing the terms of the agreement. Ralph complained that the dealership had verbally assured him that any unused mileage would be credited to him, thereby increasing the guaranteed future value amount for the vehicle if he sold it back to the dealership. He also complained that the agreement was unfair and oppressive.

Our investigation

We read the agreement and found it contained no provision for reassessing the guaranteed future value based on a lower mileage. In terms of mileage, it simply stated the guaranteed future value amount and the maximum mileage, adding that the maximum mileage, if exceeded, would result in a reduced guaranteed future value amount.

Ralph reiterated that the dealership had verbally assured him the unused mileage would be credited to him, and that the guaranteed future value was only a minimum value. However, the agreement did not support this view, and nor did an email from the dealership in August 2024 stating that the guaranteed future value was the amount specified in the agreement. The email did not promise or confirm any credit for unused mileage.

We also did not agree with Ralph’s complaint that the agreement was harsh and oppressive. It was a standard agreement of its type, its terms were clearly disclosed, and did not breach other obligations owed to him. Ralph did not have to sell the vehicle back to the bank and could choose other options. There was nothing to suggest the agreement failed to meet his needs or that he had entered into it unwillingly.