AMVIC has recently noticed automotive businesses trying to add extra fees to a vehicle sale. It is happening whether a consumer orders a vehicle (often with a long lead time) or when a consumer walks into an automotive business or onto a lot and picks from the current inventory. The automotive industry has taken to calling this extra fee a market adjustment fee.
All-in pricing is the law in Alberta
That means when an AMVIC-licensed seller advertises the price of a vehicle it must include ALL fees and charges the seller intends to charge. The only fee that can be added to the advertised price is GST and any costs associated with financing. A market adjustment fee cannot be added to the all-in advertised price of a vehicle. AMVIC recommends doing research on the vehicle you would like and taking vehicle advertisements with you into the automotive business.
If a vehicle was not advertised at a specific price, businesses can charge the market rate and add extra fees, assuming the consumer is willing to pay them. No consumer should ever be forced to agree to extra fees, additional equipment or services, if they do not want them. If a consumer is unable to negotiate removing those fees, then walking away from the deal is an option.
Remember, advertising includes mediums such as print, direct mail, social media, online, radio, mobile and television.
Deposits and extra fees
Remember that a deposit is not a bill of sale, it is money given to an automotive business usually because a consumer is interested in buying and wants the vehicle to be put on hold for them. AMVIC encourages consumers to use our deposit agreement so they can outline terms and conditions and include identifying information such as the VIN. Generally, if there is no bill of sale and a vehicle is ordered with an in-house deposit agreement, which can vary greatly, the automotive business can ask for more money. AMVIC can investigate deposit-related complaints if there is evidence that the consumer was misled or there was an unfair practice (Section 6 of the Consumer Protection Act). However, AMVIC does not have legislative authority over deposits or deposit disputes. AMVIC recommends that a consumer speak to the general manager of the automotive business to attempt to resolve any issues or contact a lawyer to obtain legal advice.
The bill of sale is the formal agreement to purchase
Consumers should use a fully completed bill of sale that includes all of the mandatory information to best protect themselves from price increases. Remember that other documents that are used as sales tools or are created during the negotiation process such as worksheets, in-house deposit agreements, deposit receipts and other documents are NOT a bill of sale. Consumers should print or screen capture AMVIC’s free, easy to use consumer checklists to ensure your bill of sale is complete.
Federal Competition Act and drip pricing
In June 2022, the Government of Canada amended the Competition Act to recognize the harmful business practice of drip pricing. The federal government defines drip pricing as involving “…offering a product or service at a price that is unattainable, because consumers must also pay additional non-government-imposed charges or fees to buy the product or service.” It is called drip pricing as additional fees are often added at the end of the transaction that were not previously advertised. A dealer found to be non-compliant with the Competition Act could face significant penalties. For more information on drip pricing, please contact the Competition Bureau.
For free advice, including consumer buying guides, visit amvic.org.