The Ontario Motor Vehicle Industry Council said an independent mystery shopping investigation showed only 40 per cent of dealerships visited provided all-in pricing.
The results, released in the latest issue of OMVIC’s Dealer Standard release, were called “disappointing” and revealed areas of ongoing concern for the watchdog.
“This type of activity is not only illegal, it’s unfair,” said John Carmichael, OMVIC CEO and registrar.
“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.”
The undercover investigation was commissioned in February and held in the Kitchener/Waterloo and Guelph markets in western Ontario.
Looking to identify possible trends and track compliance, undercover shoppers visited 24 franchised dealerships. Only 40 per cent of the dealers visited provided all-in pricing meaning 14 dealers imposed charges on top of advertised prices – hidden fees that ranged from $158 to $986.
Only 10 of the 16 (62 per cent) vehicles advertised at the Kitchener/Waterloo dealerships OMVIC mystery shoppers visited were in stock or could be obtained easily. The results were worse in Guelph, where only five of nine (55 per cent) vehicles advertised were in stock or easily obtainable at the time the ads were placed.
“If vehicles are not in stock, dealers have a responsibility to ensure their ads make this clear” explained Carmichael. “Otherwise it can lead to complaints of bait and switch.”
OMVIC said dealer-advertised prices must include all fees and charges the dealer intends to collect, including freight, pre-delivery inspection/expense, administration fees, government levies, OMVIC’s fee and fees for products or services the dealer has pre-installed like nitrogen in the tires, security etching, fuel, etc.
HST and licensing do not have to be included in the price if the advertisement clearly and prominently indicates that they are not included.
OMVIC also said if an advertisement includes the price of a vehicle, the vehicle must be available at the time the advertisement is published. If the vehicle has been sold or is no longer available at the advertised price, dealers must remove or edit the advertisement immediately.
In some instances, dealers advertise vehicles that are not yet in stock. While it is permissible to advertise vehicles that are not yet in stock, the advertisement must clearly and prominently disclose one of the following: A factory order is required, a dealer locate is required or that the model is incoming.