Some Alberta auto dealers are adding hundreds of dollars to the negotiated price of the vehicles they sell, extras that buyers were told they had to pay, even though they are optional.
Darren Bezanson of Grande Prairie was surprised to discover the final price of his 2007 Chevy pickup was $1,200 more than what he negotiated with Western Truck Farm just a few hours before.
Bezanson was billed $599 to have his tires inflated with nitrogen gas and for an accompanying tire warranty.
He was charged another $599 for Globali.com, a body panel marking program that’s touted as a theft-deterrent.
He had asked for neither.
"They didn’t give me an option. They led me to believe the Global registration was part of the paperwork and the nitrogen hazard was part of the purchase of the vehicle," Bezanson said.
When his son bought a vehicle from the same dealership group he paid the same extras, plus a $503 "tire recycling surcharge".
That’s when Bezanson decided to Go Public with his complaint.
"I want to make the public aware of this," he said.
Go Public met with John Klassen, General Manager of the parent dealership, Grande Prairie Mazda. He refused to be interviewed.
Go Public contacted Denis Ducharme, President of the Motor Dealers’ Association of Alberta.
"[Additional warranties and equipment] are things a dealer will decide are good value...in terms of protecting your vehicle. The majority of customers are happy with that, so of course when they come to pick up the vehicle it will show as an itemized charge...over and above the vehicle price coming from the factory. Those types of items are standard in the industry."
Theft-protection programs costly, deterrent-value unclear
Sales contracts provided to Go Public show Alberta dealers charge between $295 and $599 for the anti-theft registration.
But the Insurance Bureau of Canada says vehicle registration programs are just one way to deter thieves, and a potentially costly one.
"I don’t know if these companies have done any studies on what percentage of their [marked vehicles] are stolen. I haven’t seen numbers like that," said Garry Robertson, national director of investigations for the IBC.
Robertson says a vehicle that’s been marked for identification might deter a thief who wants to dismantle it for parts. But in Alberta that’s only a fraction of the thefts each year.
Robertson says steering wheel locks or engine immobilizers could be cheaper and more effective deterrents.
Other dealers follow same practices
Erin Callihoo, of Edmonton, paid $399 for a "Document Fee" and $698 for a "Safety Package" when she bought her new car.
"I didn’t ask for either," said Calihoo, a CBC employee.
"The day that I went to pick up my car I was told of those fees, that they’re automatic, and that that over the course of my loan it wouldn’t be a huge dent in my bi-weekly payments."
Go Public found there are several extras Alberta car dealers commonly add after the price has been agreed to, including tire and air conditioning levies, document and registration fees, tire repair policies, and anti-theft packages.
A levy of $4 per new tires is mandatory in Alberta, as is a $100 federal tax on new air conditioning units, but these are already listed in the manufacturer’s suggested retail price.
Everything else, other than GST, is optional and negotiable.
Auto regulator says dealers free to charge what they can, customers free to walk
In Alberta, regulation of the auto industry and enforcement of consumer protection rests with the Alberta Motor Vehicle Industry Council (AMVIC).
"There are two types of sales," said John Bachinsky, AMVIC’s executive director. "If it’s an advertised price…the store is certainly obligated to stay with that advertised price and not add a bunch of things on other than GST."
Once the customer and the dealer start negotiating, however, the rules change completely. If the customer agrees to pay for the extras then the dealer’s profit goes up.
"Some of those fees are for what I consider to be aftermarket accessories that consumers may want," said Bachinsky. "The stores…need to survive too. They’re obviously looking for ways to make money."
"[Customers] should walk if they’re not happy with it," said Bachinsky. "It’s a very competitive industry out there."
Bachinsky says without documentation it’s difficult to prove a customer was misled into paying additional fees against his or her wishes.
Alberta a ‘rogue’s gallery’ of extra charges: consumer advocate
"What you have [in Alberta] is a rogue’s gallery of extra fees. It’s the largest I’ve ever seen," said George Iny, director of the Automobile Protection Association, a consumer advocate organization.
"There is no document that costs $200 to $300 to fill out. What ‘DOC’ means, is ‘Dealer Overhead Charge’. Their lawyers have told them how to abbreviate it so they can get away with it."
The "tire recycling surcharge" Darren Bezanson’s son paid was particularly egregious, Iny says.
"There is no authority in Canada that collects [$500] when you buy a car," he said.
"For you to claim it’s being spent on the environment is actually a deception."
After complaining to the dealership, Darren Bezanson and his son received refunds for the extras they paid, but he’s speaking out anyway.
"My son and I both bought vehicles through them, and there’s two out of two. So how many more people out there is the same thing happening to them?"