It is the business owner’s/salesperson’s obligation, and good business practice, to fully disclose all fees. A salesperson and/or business must not mislead a customer into believing a fee is mandatory or required by law if it is not.
Misrepresenting fees or failing to properly disclose additional fees can be in contravention of the Consumer Protection Act which can result in various enforcement actions such as charges, an Undertaking or Administrative Penalties. AMVIC does not encourage or discourage businesses from selling additional features and add-ons, however you must accurately disclose all fees. All fees should be disclosed during the negotiation process and not after the purchase price has been established.
Fees and charges that must be included on a bill of sale:
- All fees and charges including: any delivery/freight/transportation charges, any inspection fees, any licensing fees, charges for warranties and all taxes and levies, including GST; and the timing for payment of each fee and charge.
- A list of all extra equipment or options and the cost of each.
- The total cost of the vehicle including all fees, charges and costs of the extra equipment and options.
- If down payment or deposit amount is paid: the amount of the deposit or down payment and the balance remaining to be paid.
- Trade-in: identifying information on the traded in vehicle and the value of the trade-in allowance incorporated into the cost of purchase of the vehicle being sold to the consumer.
- Trade-in with loan still on it: the remaining loan balance incorporated into the cost of purchase.
- Credit agreement: a disclosure statement regarding the credit agreement must be provided on or attached to the bill of sale.
- Any and all promises, offers or inducements at no extra charge made to the consumer individually listed.
- The advertised price of a vehicle must include all fees. The only exceptions are the GST and costs and charges associated with financing.
- This includes, but is not limited to, all fees and charges such as the cost of accessories, optional equipment physically attached to the vehicle, transportation charges and any applicable taxes or administrations fees.
Mandatory government fees (non-negotiable, must be paid by the customer):
- GST (Goods and Services Tax) 5%
Examples of other fees:
- AMVIC levy ($6.25)– It is mandatory that the business pay the AMVIC levy. AMVIC uses levy revenue to fund the AMVIC Compensation Fund and to provide investigation and education programs. The business can pass along the cost of the levy to the consumer, but it cannot be presented as a mandatory government fee.
- Advance disposal surcharge (tires)– $4/tire for cars and light trucks. $9/tire for rim sizes greater than 19.5” for use on larger vehicles. Under the Environmental Protection and Enhancement Act Tire Designation Regulation and the Tire Recycling Bylaw, environmental fees must be remitted by a supplier when new tires are sold in Alberta or used tires are imported into Alberta from outside of Canada. This includes tires that are on a motor vehicle.
- Administration/dealer fees.
- Third-party warranties.
- Vehicle add-ons such as paint protection, etching or any add-on that is not factory installed.
- Air conditioning levy– The Canada Revenue Agency levies an excise tax of $100 on vehicles imported or manufactured in Canada at time of delivery to the purchaser, in most cases the automotive dealer. If the amount is being passed down to the consumer, they must be aware that it is a recovery of the levy.
- Any and all other fees or charges except the GST.
- Be honest. Don’t put your reputation, or the reputation of the business you represent, at risk by being dishonest about fees and charges.
- Be informed. The only mandatory charges that can be added to the advertised price of a vehicle are the GST and the tire levy. If that specific vehicle was advertised, the only non-optional fees that can be added to the advertised all-in price are the GST and financing charges.
- Be prepared. All additional fees should be identified in writing and initialed by both you and the customer. You should clearly identify if the fee is mandatory, required by the dealership, or optional. Remember, just because a fee is mandatory at your dealership does not mean it’s mandatory by law– don’t misrepresent.