What Consumers Can Learn from OMVIC's Mystery Shoppers
Friday, August 16, 2019
Last month, Sharon and Christine (not their real names), went car-shopping. The pair visited dealerships in Sudbury and Sault Ste. Marie that had vehicles advertised online.
But Sharon and Christine were not your average car-buying consumers: they were mystery shoppers and employees of Ontario’s vehicle sales regulator — OMVIC (Ontario Motor Vehicle Industry Council). Their mission was simple: to ensure dealers and salespeople were in compliance with the all-in-price advertising provisions of Ontario’s
Motor Vehicle Dealers Act (MVDA).
The MVDA requires dealers to include all fees and charges in any advertised vehicle price,” explained Steven Byrd, OMVIC’s Director of Investigations. “This is meant to provide transparency to consumers and help produce a level-playing field for dealers.”
Unfortunately, the results of the mystery shopping were “disappointing. “All-in price advertising has been a legal requirement in this province for nine years,” stated Byrd.
“So to find 50 per cent of the dealers our mystery shoppers visited trying to add hidden fees to their advertised prices is concerning.”
Examples of the fees added included those for tire tax and security products added by the dealer — some as high as $738. The mystery shoppers were also troubled by
the ease at which some salespeople tried to explain away hidden fees; when questioned, one salesperson simply referred to the fees as:“the cost of doing business.”
“OMVIC believes this practice is unfair to consumers and to every dealer who abides by the regulations and provides transparency to its customers.“
Many of those who breached the MVDA or OMVIC’s Code of Ethics will face charges or administrative action. Charges laid by OMVIC Investigators and decisions of OMVIC’s
Discipline Panel (for breaches of the Code of Ethics) are matters of public record and can be found here on OMVIC’s website.
Understanding All-in Price Advertising
According to Ontario’s Motor Vehicle Dealers Act (MVDA), if a dealer advertises a price for a vehicle, that price must include all fees and charges, except for HST and licensing fees. Note:while all fees must be included in an advertised price, they must be itemized separately on a bill of sale.
Examples of fees or charges that must be included
in an advertised price include:
PDI-PDE (pre-delivery inspection/expense)
Administration (Admin) fee(s)
Government levies (air tax, etc.)
Safety inspection (unless the ad contains an"Unfit Vehicle" or "As-Is Vehicle" disclosure statement)
Products or services pre-installed by the dealer
To help ensure consumers understand their right to all-in pricing OMVIC’s website and OMVIC Academy videos and Car-Buying Guide provides extensive information, and the regulator is currently running cross-province TV and online ads to further enhance awareness.
OMVIC’S 3 Tips for Vehicle Shoppers
1) Know what constitutes as an advertisement: An advertisement is an inducement to buy (or lease) a vehicle. This includes ads on the internet such as dealer website, online marketplace, social media, radio/TV and signs on the vehicles
2) Take a photograph or screen shot of the advertisement and bring it with you to the dealer
3) Report: If you encounter a dealer trying to add fees (other than the HST and licensing) to the advertised price, let OMVIC know at email@example.com.
The Silver Lining
While the mystery shopping results certainly could have been better, not all was gloom and doom. Sharon and Christine met several dealers and salespersons who provided accurate and
transparent advertising and full disclosure about the vehicles offered for sale.
“We never go into a dealership hoping they fail,” Byrd explained. “In fact, we’re actually rooting for the dealers to ‘pass the test’ because when our visit is uneventful, we know our educational campaigns and messaging are having positive effects: that transparency is building trust and afair and open marketplace is being fostered.”
OMVIC (Ontario Motor Vehicle Industry Council) is Ontario’s vehicle sales regulator. It administers and enforces the Motor Vehicle Dealers Act and relevant sections of the Consumer Protection Act, on behalf of Ontario's Ministry of Government and Consumer Services (MGCS).
As the regulator of motor vehicle sales in Ontario, OMVIC’s mandate is to maintain a fair and informed marketplace by protecting the rights of consumers, enhancing industry professionalism and ensuring fair, honest and open competition for registered motor vehicle dealers. Visit omvic.ca to learn more about your car-buying rights as well as additional tips for buying a car in Ontario.
For car buying tips, check out the OMVIC Academy. You can view other resources such as multilingual videos and download the OMVIC Car-buying Guide.
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