If you or someone you know is looking to buy a brand-new car from a dealership in Ontario, this personal story should serve as a good starting point on how to wheel and deal your way to a great deal on a brand-new car.
My educational background and experience may be diverse, but I am no lawyer, and yet on some occasions I might get labelled a “Philadelphia Lawyer” because of my knowledge about the most minute aspects of the law. One of those occasions includes my knowledge on the Consumer Protection Act, 2002 as it relates to purchases of goods and services and Ontario Motor Vehicle Industry Council’s (OMVIC) rules and regulations around car sales.
What you need to know
The Consumer Protection Act, 2002 represents legislation that was passed in Ontario because there were province-wide issues with sellers attempting to charge buyers for unsolicited goods or unsolicited services. The Act ensured that the recipient of any unsolicited goods and services would be under no legal obligation to pay any invoice or to return the goods.
OMVIC is a licensing body that was set up in 1997 to administer the Motor Vehicle Dealers Act, 2002 on behalf of the Ontario government. The specific OMVIC rule that we will refer back to is, “13.2 No supplier shall demand payment or make any representation that suggests that a consumer is required to make payment in respect of any unsolicited goods or services despite their use, receipt, misuse, loss, damage or theft.” Additionally, a while back OMVIC had also issued a bulletin stating, “Under the new Motor Vehicle Dealers Act, when a dealer chooses to include a price in the vehicle advertisement, that price must include all charges a customer is required to pay. Such charges would include, but are not limited to, freight, pre-delivery costs, window etching, nitrogen, locking wheel nuts and so on. If a dealer is going to include these items as mandatory, then the cost must be bundled into the advertised price. To be clear, the advertised price must be the sum total of all non-optional charges.” This is important because for the majority of consumers that go to buy new cars, they are often pressured into accepting costs associated with “Additional Equipments” like Nitro Etching and wheel locks, since they are presented as a mandatory cost even though they should not be. However, one of the limitations of OMVIC is that you have to explain violations using legal jargon, otherwise your complaint is likely to get screened out even if the dealer was out of line.
GLOBALi Vehicle Registration and Recovery Network (VRRN) is an online registration that connect automotive dealers, law enforcement, and vehicle owners to help prevent auto theft and assist with recovering stolen vehicles and parts. Upon purchasing a new vehicle, consumers can choose to register online, but it is not a mandatory step, despite what some sales agents may say.
Where is the loophole to avoid “Additional Equipments” fees when buying brand-new cars?
A dealer has the right to bill you for any work that they do on a car including “Additional Equipments” like etching, and they should be. However, the loophole here that allows you to avoid “Additional Equipments” fees is that the vehicle is being factory ordered and you can customize everything about it to your preferences, which also means you technically have the right to pick if you want any “Additional Equipments”.
The difference between buying a brand-new vehicle that is already on the lot compared to one that is coming out of the factory is that the brand-new vehicles on the lot are likely to have already been worked on, which gives the dealer grounds to charge you for the “Additional Equipments” fees. While these fees used to get waived all the time pre-Covid, dealers in Ottawa are demanding that consumers agree to the fees, or they will refuse to sell them the brand-new car. What makes the Ottawa car market even more challenging is that most of the car dealerships are owned by a few large automotive groups, and that makes it difficult to always get a good deal.
The Nissan Dealership saga
My parents have been looking to buy a new car for quite some time now, since their vehicle is on its last legs. Eventually they decided to go with a brand-new Nissan Kicks SV, but when they started visiting Nissan dealerships, the prices that they ended up receiving from the car salespeople were much higher. So, they asked me for help.
Before we get into the Nissan dealership saga, I need to state that I like to dress comfy, even if comfy sometimes looks “bumy”. This matters because on the day that we visited that Nissan dealership, I wore a navy-blue cashmere hoodie, a pair of stone washed black slim fit jeans, and a pair of turquoise New Balance shoes. I may have even had a little bit of a scruff too. But I had no idea that the sales agent on that day would not be able to see past my ‘outfit’, to the point that I felt like the master of disguise.
Upon entering the dealership, we were greeted by a middle-aged sales agent who proceeded to ask us about the nature of our visit, so we got to talking. During our conversation with the sales agent, I was switching languages to throw them off their sales pitch and to keep them guessing about the nature of what we were discussing amongst ourselves. Eventually the sales agent started making incorrect claims about what was involved in purchasing a brand-new vehicle, so I interjected and corrected their mistakes.
The sales agent eventually decided to go into the “managers office” to generate a price for us and much to our surprise, they added winter tires in addition to “Additional Equipments” fees. However, the quote that they printed off for us was created with an Excel template and stamped on the page in red ink was “office use only”, and we were told that we could not get a copy of it. It was around this time that the sales agent started giving off Neal Caffery vibes. So, I let them know that I actually had a copy of an official quote provided to me by another Nissan, that all Nissan’s are required to provide upon request.
Since I was able to identify each of the sales agent’s incorrect claims, I turned to my father, and we discussed a final price we would close on. I thought the sales agent was going to accept that I got the better of them in our negotiations, but I was wrong. Immediately after I told the sales agent that we wanted to talk price, he started repeating, “Why are we still talking about this? It’s over.” Just based off of the way that they were saying it, I knew I had broken them. However, I wish I would have responded with the infamous line from the 2002 movie Paid in Full, “C’mon, I’m broke baby, I ain’t got no money” instead of politely letting him know he was straying off course.
It was around this time that the interaction was starting to get out of hand, the sales agent would not let go of the fact that I had called them out on all their false claims. Now they wanted to know what I did for work. I informed the sales agent that it did not matter and that we were looking to buy a brand-new car, but that resulted in them giving us a weird sort of lecture. Talk about being a man-child.
Seeing as this interaction was becoming more and more unproductive, I decided to end the negotiation as I had decided that I would write to the general manager about our experience with this sales agent. Just as we are about to exit the dealership, the sales agent stops me to say, “You are a good son.” What a weird thing to say.
The next day I sent an email to the general manager of the dealership, this Nissan dealership was owned by an automotive group, but the general manager decided to repeat the same misleading information. They told me that I had the freedom to choose which dealership I bought a car from and that it did not have to be with them. I respond to this by asking for the contact information for their automotive group, and in that email, I inquired if what the general manager meant was that if my father did not agree to the “Additional Equipments” then they would refuse to sell him a Nissan car? I made it clear, we wanted to buy a Nissan Kicks from their specific dealership, but that they were refusing our business because we did not want to agree to their “Additional Equipments” costs, that were unsolicited goods and services. Their excuse was that they could not accept the “terms” that we were putting on their dealership in order to sell us a brand-new car. Funny, right?
A few days pass and I eventually get in touch with the VP of this automotive group. It was a pleasant conversation, but it became pretty clear that they were going to repeat the same talking points. The VP went on to say that the “Additional Equipments” fees were the result of a contract between the automotive group and Globali, and that a third-party was responsible for the etching, an unsolicited service for which they were charging us $999. The VP then explained that even if he tried to stop the car from being etched, Nissan would ship the cars to a separate lot where a third-party company who the automotive group had a contracted to carry out the etching would do so. I was then told that if they removed the “Additional Equipments” fee for me, then everyone deserved to have it waived. I disagreed, and I reminded the VP that in the car sales industry no two transactions were the same, and a sales agent would not have done their job right if they failed to account for their clients’ unique needs. Based on the VP’s response, I could tell that they knew that I had got the better of them too, and I ended the conversation restating our conflicting positions, and by asking them if they could let me know if there were any changes to the “Additional Equipments” fee. The VP agreed and said that they would let me know by the end of the week. However, I ended up having to reach out to the VP after they failed to get back to me, but it was the general manager who emailed me back saying that there would be no deal. Well, Yippee-ki-yay!
Challenge accepted. The next step was writing to OMVIC. What I wrote and the results? That’s for next week.