New Vehicle Charges Cannot be Itemized on BoS
OMVIC has received a number of enquiries from dealers asking if freight and other “new vehicle” charges (e.g. air tax) should be itemized on a bill of sale when selling demonstrators. The answer is no.
While demonstrators are legally considered used vehicles, OMVIC recognizes most manufacturers qualify demos for new vehicle incentives and/or financing and that this may require the use of a new vehicle purchase contract. However, when selling a demonstrator, dealers should remove charges for freight, PDI, air tax, tire stewardship, etc. from the contract.
Some dealers have claimed their DMS software does not allow new vehicle charges like freight to be deleted on bills of sale. OMVIC has contacted the major dealer software providers who explained their systems do allow charges like freight to be de-selected or zeroed. Dealers are encouraged to contact their DMS suppliers if they require assistance.
If a dealer uses software that will not allow new vehicle charges to be removed when selling a demo, the dealer should include a discount on the bill of sale, equal to the new vehicle charges, and separate from any other discount offered to the customer. This allows the dealer to demonstrate he/she is not charging freight, PDI, air tax, tire stewardship fee, etc., on a used vehicle.
As demonstrators are used vehicles they must not be listed on a dealer’s website (or elsewhere) under a tab or link for new vehicles. Instead, they should be listed with other used vehicles or under a separate tab/link for demonstrators.
For more information dealers should contact their local OMVIC Inspector or call OMVIC’s Inquiries Team at 1-800-943-6002x3942