Nova Scotia urged to adopt all-in pricing on vehicle sales
Purchase fees range from tire and rim warranties, to security etching, to administration
A Halifax man annoyed about what he calls "hidden" car fees is calling on the Nova Scotia government to follow the lead of several other provinces and implement all-in pricing for vehicle purchases.
While searching for a used Toyota RAV4 to buy, Carl Myers contacted several car dealers in the province over the last month, some by phone and others by email.
"I found when I came up to getting final prices, when they thought they had me captured in a deal, there were these hidden fees and each one seemed to be different," he told CBC News.
"So it was really frustrating to me that these fees were being charged and that they weren't disclosed at the very top."
The fees varied. In one instance, they amounted to an additional $700 to $800 on the price of the vehicle.
Myers said he encountered fees for administration, tire and rim warranties, detailing, cleaning and security etching. Each cost between $205 and $499.
"The administration fees seems to be paying for telephones and the secretaries and the paperwork and to me that should be absorbed in the price of the car," Myers said.
"Whatever fee it is, for whatever purpose, it really should be up front."
The Automobile Protection Association agrees. George Iny, a director with the non-profit consumer protection group, says a vehicle's advertised price should include all fees.
He called the administration fee "completely bogus," and said it covers a dealer's overhead costs. Other fees, such as the tire and rim warranty that includes nitrogen in tires, are grossly over-priced, he said.
"A dealer will charge $299 and throw in a warranty with it that might be worth $50 or $60," Iny said.
Iny said customers should be given the option of not accepting the tire and rim fee. But he said APA secret shoppers in other provinces have been told that's not possible because nitrogen is already in the tires.
Another fee that crops up is for etching security information on a vehicle windshield. Iny said it's little more than insurance the dealer buys to protect the vehicle when it's on their lot.
"If the vehicle is stolen from their own lot they get some money back from the company … They put little stickies on the windows and maybe a few other places of the vehicle," he said. "They may pay $60 a car and you'll pay anywhere from $200 or $300 for it."
When contacted by CBC News, a Halifax Regional Police spokeswoman said security etching information is not recorded on police databases or used by police to track stolen vehicles. Const. Dianne Woodworth said police instead use the vehicle identification number when a car or truck is stolen.
'We never hide it'
CBC News contacted several dealers Myers dealt with while on his vehicle search.
Susan Johnston, vice president of marketing and communication at O'Regan's, which owns dealerships across the province, told CBC News the company provides full disclosure to all customers.
"An agreement to purchase or lease is made when a Customer Approval Order is reviewed and signed by the customer which includes all vehicle information, breakdown of pricing (options, fees, taxes, etc) and customer information," Johnston said in an email.
She adds that all documentation is reviewed again, with a full breakdown of pricing, including options, fees and taxes.
At Best Toyota in Kentville, dealer principal Brian Illsley said: "We never ever hide it. We tell the customer up front when we go into negotiations that this is a fee that we have. It's a warranty that we provide, but this is part of the deal."
The dealership charges a $499 tire and rim warranty fee, which Illsley said includes replacing or repairing rims and tires, filling them with nitrogen, a vehicle history report as well as offering to do the transfer of ownership.
Illsley said he gets few complaints about the fee, which is mandatory.
"Unfortunately we've already put the nitrogen in the tires. It is our policy not to sell [a vehicle] without it," he said.
Illsley said his customers get value for their money on the tire and rim warranty fee. He said he is in favour of what he calls full-disclosure pricing because it puts dealers on "the same playing field."
"In Nova Scotia they don't have to and it's different from dealer to dealer," he said.
John Sutherland with the Nova Scotia Automobile Dealers Association said the group has no position on all-in pricing. He said if customers aren't happy, there is plenty of competition and they are free to take their business elsewhere.
Now on government radar
Ontario, Manitoba, Quebec, British Columbia and Alberta all require all-in pricing for vehicle purchases. It means the sticker price is the price you pay, plus taxes.
Geoff MacLellan, the acting minister of Service Nova Scotia, told CBC News there is no current movement to legislate all in-pricing in Nova Scotia but it's worth exploring.
"It just hasn't emerged as a trend so therefore it hasn't been looked at on a very broad scale across the province, so I think this could be a trigger," he said.
He said there is the notion of buyer beware but there may also be questions of false advertising.
"Should these things be more open? Should they be available for consumers to know up front all of these fees will be included so when you're buying something you're buying the whole package?" MacLellan said.
As for Carl Myers, he prefers to shop local but said he does not do business with companies that charge fees above the purchase price.
He said he subsequently bought a used RAV4 in Ontario for less than what he could find in Nova Scotia.