DTI prohibits selling of cars, bikes on installment-only basis

Forcing car or motorcycle buyers to purchase their preferred vehicles via financing has been a common practice among dealerships for quite some time now. And sadly, it’s become even more prevalent in recent years, especially among motorcycle dealers.

We bring with us today some great news regarding this, though. The Department of Trade and Industry (DTI) has recently issued Department Administrative Order (DAO) No. 21-03, or the Guidelines for Payment Options on the Purchase of Consumer Products and Services.

The DAO emphasizes that consumers have the “right to choose” and as such will be given various options, including modes of payment. This covers all entities engaged in the sale or offer for sale of consumer products and services.

The order also explicitly states that the mandatory provision of payment options will likewise prohibit any person or company to offer any product or service via an “installment-only” payment scheme.

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The DAO reads: “Consumers shall be given the option to pay in cash, in installment, or a combination thereof. Denial of the right of the consumer to pay in cash shall constitute a prima facie violation of Article 52 of the Consumer Act. Provided that the seller is not precluded from offering a discount from the selling price if the payment is made in cash. Provided further, that the selling price shall remain the same whether the mode of payment is through debit/credit/prepaid cards, QR codes, electronic fund transfers, or other digital means that are available to consumers.”

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In addition, the DAO also mandates that the payment options shall be posted in a conspicuous place within the business premises and must be presented in a manner that is easily understandable by consumers.

Under the Consumer Act, violators will be imprisoned for a period of five months to one year or fined P500 to P10,000, or both. If you want to read the full document, you can click here.

What do you think of this move by the DTI, readers? The next time a dealership tries to reject your cash payments, no need to wonder whether it’s illegal or not—just show them the DAO instead.

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