The Ontario Motor Vehicle Industry Council, which enforces the province’s Motor Vehicle Dealer Act and Regulations, is concerned that $9,998 ads for cars like the Nissan Micra and its competition may be misleading. So it has sent what it calls an “open message” to Ontario’s auto dealers.
“Recently a number of vehicle manufacturers have released models with advertised prices below $10,000,” says the regulator.
“At first blush, this may seem to be great news for budget-minded consumers, but some of the advertising of these vehicles can be confusing, perhaps even misleading.”
The regulator reasons that add-on costs such as freight and delivery charges, fuel and tire stewardship fees and, in some cases, admin fees as well as fees for products or services dealers may have preinstalled on their vehicles – security products, etching – can balloon the actual cost of these vehicles to something in the range of $11,500 - $12,500.
“That's 15 – 25 per cent higher than the price advertised with great fanfare by the manufacturers,” the regulator calculates.
The regulator points out that when an Ontario dealer advertises a price for a vehicle, that price must be all-inclusive.
So when a dealer advertises a $9,998 vehicle, OMVIC wants to remind dealers that the “MVDA mandates that the advertised price include all the additional fees the dealer intends to charge with the exception of HST and license fees.
“The ad must clearly state HST and licensing are extra.”
The regulator goes on to say that what OEMs may say in their ads, dealers cannot since the OEMs are not subject to the MVDA and not regulated by OMVIC.
“Simply put, manufacturers … are not currently required to advertise with the same transparency as is required from dealers.
“Unfortunately, this often leads to confusion for consumers and puts dealers in the awkward position of trying to explain the difference in rules,” the regulator says.
To show its concern, OMVIC says it is encouraging consumers to report any dealer ad that violates the all-in pricing rules.
And it is encouraging journalists to ask about the availability of the $9,998 cars, those mandatory add-ons and, presumably, to mention them in any articles they write.
“Manufacturers may advertise an attractive price-point for a vehicle,” it says.
But OMVIC wonders “How many are actually available at that price as opposed to the better equipped and therefore more expensive models?”