Report on extra charges in the retailing of new vehicles

Organization

Automobile Protection Association (APA)

Published

2015

Summary

Five Canadian provinces require auto dealers to advertise an all-included price, except for sales tax and sometimes a small recycling levy. Despite this requirement, consumer complaints and reports in the media indicated that some retailers were not advertising an all-inclusive price, even in provinces that required it. In the autumn of 2014, the Automobile Protection Association (APA) conducted two secret shopper surveys to determine the integrity of price representations in new car advertising placed by franchised dealers. The sample included 18 franchised car dealerships in the Greater Montreal market and 22 dealerships in Calgary. Dealers were chosen from ads they had placed in major daily newspapers and on their websites for popular compact cars, minivans and sport-utility vehicles.

Prior to undertaking on-site visits, a survey template with information to be gathered at each dealership was prepared with the assistance of a retired auto dealer. Every dealer visit followed a standard procedure with a questionnaire administered to the salesperson, and their manager when applicable, to evaluate the integrity of vehicle representations on price, and details on extra charges if any. The secret shoppers also solicited representations regarding the availability of advertised vehicles and the manufacturer's warranty.

For all but four dealers, the secret shoppers conducted their visits on the same day or the day after an advertisement appeared. For the remaining four dealers, visits occurred within two or three days after their ads ran, while the promotions were still in effect.

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OCA Funded Research
This research received funding support through the Office of Consumer Affairs' Contributions Program.


Contact information

Address
Automobile Protection Association (APA)
292 St. Joseph Blvd. West
Montreal, Quebec  H2V 2N7
Telephone
(514) 272-5555
Fax
(514) 273-0797

Source: Consumer Policy Research Database

Date Modified: