Dealerships are legally bound to provide all-in pricing, meaning dealer-advertised prices must include "all fees and charges the dealer intends to collect."
The Ontario Motor Vehicle Industry Council (OMVIC) has a warning for car dealerships that don't follow the rules when it comes to all-in pricing, following a recent investigation. After mystery shoppers found only 40 percent of dealers provided all-in pricing, OMVIC's CEO is saying there should be harsher penalties for businesses that don't comply.
The OMVIC, which works with the Ontario government to enforce the Motor Vehicle Dealers Act (2002), had mystery shoppers visit 24 franchised dealerships in February in the Kitchener/Waterloo and Guelph areas, which are approximately 100 kilometres west of Toronto. They found that 14 dealers imposed additional charges on top of advertised prices. The fees ranged from $158 to $986.
Dealerships are legally bound to provide all-in pricing, meaning dealer-advertised prices must include "all fees and charges the dealer intends to collect." That includes freight and PDI (pre-delivery inspection), OMVIC fees, government levies, and more.
In addition, any vehicle a dealership advertises must be in stock. According to the OMVIC investigation, six of the 16 Kitchener/Waterloo dealerships visited by mystery shoppers didn't have advertised vehicles in stock. Four of nine advertised vehicles weren't available in the visited Guelph dealerships, meanwhile. The OMVIC says not having an advertised vehicle in stock could result in a "bait and switch," where a customer visits a dealership looking for something specific, and may be pushed onto a different vehicle.
What particularly bothers OMVIC CEO John Carmichael is that non-compliant dealerships are giving a bad name to the businesses that are playing by the rules.
"This type of activity is not only illegal, it's unfair,” said Carmichael. "Unfair to consumers, and unfair to the dealers whose advertising is compliant. We are hearing from more and more dealers who are tired of competitors who conduct business this way, and who want to see more enforcement and significant penalties."
We're guessing that considering the less-than-stellar results of this investigation, the OMVIC could very well be doing similar studies in the future. While there are clearly plenty of reputable dealerships across the country, this should serve as a warning to carbuyers to be extra careful when making such a large purchase. Know your rights, and don't be afraid to speak up if something seems amiss.
Photo: Jeff Lupient on Flickr