A NEW VEHICLE DEALER IS TRANSPARENT ON A SALE
Auto sector among the most regulated, says industry expert
I read with dismay the Oct. 15 “Opinion” piece entitled ‘There’s got to be a better way to buy a car, right?’ by Liisa Atva.
As a highly regulated industry in a region of the country with an extremely strong consumer advocacy network, the article detailing a buyer’s experience purchasing a new vehicle in B.C. (the dealership and buyer names were not included in the article) seemed implausible on many levels. Further, to have a situation where our sector — which contributes more than 36,000 jobs across B.C. communities, generating close to $11 billion in economic activity — is not to be given the opportunity to provide context or comment to these unsubstantiated claims was unsettling.
The level of transparency the writer is advocating for does not apply to any other business I can think of. Consumers do not walk into Subway and ask what the company’s profit is on a chicken sandwich. No, the market sets the price, and the highly competitive auto industry is no different. Interestingly, unlike many other types of business, the auto sector is one of the most regulated and transparent.
Let’s discuss the fees, which are itemized outside of the purchase price for the very transparency the writer implied was missing.
Our industry’s regulatory body, the Vehicle Sales Authority of British Columbia ( VSA) requires all licensed dealers to sell vehicles in a clear and transparent manner and dealers must not withhold or provide information that would cause you to make an error in judgment about whether or not to buy the vehicle. These strict standards set out by the VSA means that any price set out on a window sticker or other type of advertisement must be the total price for which the vehicle can be purchased, not including taxes.
Because of the diligent efforts of our regulator, the VSA, it’s hard to imagine how the price outlined in the Oct. 15 article ballooned to the extent that the writer claims. Additionally, beyond regulatory oversight, dealers are held to extremely high standards of conduct by their respective manufacturer brands.
One non-negotiable cost is an inspection and pre-delivery fee from the automakers themselves. This fee goes toward a special inspection for mechanical or cosmetic issues before a vehicle is shipped off.
Another fee, straight from auto manufacturers, is the freight charge, also called the delivery or destination charge, which covers getting the vehicle from the factory to the dealership. Freight fees are also non-negotiable, and are sometimes combined with pre-delivery fees under the same charge.
Then there are dealer fees, also known as documentation or administration fees — these fees can be negotiated.
These charges are up to the discretion of individual dealerships, and represent the time and resources that go into making your new vehicle road-ready. Dealer fees also cover registration fees for extended warranties and other programs, technology activation, vehicle lien searches and history reports, licensing, insurance documents, and more.
In B.C., a purchasers’ bill of sale must lay out all additional fees clearly and transparently. Our industry worked with the VSA to develop a standardized bill of sale that protects both the consumer and the dealership. Look for the New Car Dealers Association logo on that bill of sale at the dealership to know they are using the VSA-approved version.
Added fees are an accepted part of new vehicle sales, but they shouldn’t make the car-buying process uncomfortable. If you’re unsure about a fee on your bill of sale, don’t hesitate to ask your salesperson or speak to a sales manager. It’s your right (and frankly, your responsibility) to question the fees and be provided detailed explanations. It is our industry’s responsibility to make sure your vehicle purchase has no surprises.
On behalf of B.C.’s licensed new car dealers, we are committed to providing excellent customer service and a professional experience for your new or used vehicle purchase.