Auto dealers in Quebec take advantage of the strong requirement to sell certain models $5,000 to $10,000 more than the suggested retail price, which can be a violation. They break the law by “disguising” new cars as used cars.
For example, at Volkswagen Center-Ville in Montreal, a used 2022 Golf GTI lists for $44,995 before tax. The car has 73 kilometers on the clock.
With a manufacturer’s suggested retail price (MSRP) of $37,745 for this popular model, it’s nearly impossible to find new.
“It’s new, but we sell it second-hand,” admits one of his salesmen over the phone unabashedly.
He explains that the dealer “bought” it from another dealer and that it was already registered, meaning the warranty started in July 2022.
“It’s market price. The car is brand new, and that’s what matters,” he says of the $8,000 above MSRP.
In Quebec, the Consumer Protection Act prohibits “requiring a higher price for a product or service than is advertised.”
“We can hypothesize an infringement situation where a dealer conceals the fact that the vehicle is new in order to avoid being forced to sell at the advertised price. [PDSF ou autre] And demand a higher price,” explains a spokesperson for the Office of Consumer Protection.
2 years often
This “makeover” of new cars on used cars has been common for 2 years, notes George Ini, president of the Motorists’ Protection Association (APA).
With shortages in the new market, waiting times have increased and customers are willing to pay more to get a car faster.
“It’s mostly a regional practice where business people get together to do it,” Mr. Indicated further.
Typically, all of these cars have less than 3,000 km on the odometer and sell for $5,000 to $10,000 above MSRP.
In addition to the Golf GTI, Toyota RAV 4 Prime and Subaru Crosstrek are often subject to this “makeover”, as are almost all electric car models.
The trend is easily confirmed by looking at the offer on the site Auto TraderReference in Quebec.
The 2023 models are rare for now because they are just now on the market. But there are already some, such as a 2023 Crosstrek with 100 kilometers on the odometer posted by a location prime leasing dealer for $5,000 more than MSRP.
Is MSRP the advertised price? Not in the sense of law. But George no longer believes so. “A new car disguised as a used car should be controlled by the manufacturer’s representation,” he says.
When Toyota, Subaru or Volkswagen advertise new cars at a certain price, they must sell them at that price, otherwise it is false advertising.
“Builders know about makeup. But they are happy because the dealer sold his quota and closed their eyes. They will move if they are forced to or if their reputation is at stake,” says the APA’s president.
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