Buying a new car may prove to be a tricky affair, especially if you are a novice to this industry. You may not be aware of and understand the various fees printed on the price quote. Some of these fees are mandatory while others are negotiable. When you don’t know what fees you must pay for, and what you need to question, the process can become pretty expensive.
However, you do not have to worry, as we will help you learn about these dealer fees associated with buying new cars.
All-in Price Advertising as per OMVIC (Ontario Motor Vehicle Industry Council)
As per the Motor Vehicle Dealers Act, every dealer registered with OMVIC must follow all-in advertising – which means the price (for both new and old car) must include all charges and fees that the dealer wants to collect from the customer. There cannot be any hidden fees at all.
Must to include fees in advertised price:
- Freight: Freight fee is charged for transporting the car from the factory to dealership. The amount of this fee is determined by the manufacturer.
- Pre-delivery inspection/expense: This fee is also set by the manufacturer and charged for getting the car ready for driving by filling the gas, checking coolant, engine oil, lights, windows, air conditioning and lot more.
- Government taxes: You need to pay for government taxes such as air tax, tire tax and regulatory fees. OMVIC is responsible for keeping dealer fees transparent, and ensuring that dealerships are committed to keeping their customers well-informed about the fees incurred when buying new cars.
The dealerships are obligated to incorporate the cost of products/services that are pre-installed on the car, in the advertised price, such as warranties, nitrogen or tire protection package, theft deterrent or security products and fuel. Keep a note that while dealerships are required to list all the fees in the price, these fees must also be mentioned separately and given on the final bill of sale.
What’s not incorporated?
Licensing and HST may not be included in the advertised price. When this is the case, the dealer will mention it in the advertisement prominently and clearly. Licensing fee indicates the cost of car plates and registration, and doesn’t include any additional fees or charges added by dealer.
Type of fees where you can negotiate
Administration fees: These fees include transaction, financial documentation and licensing, and sometimes may also cover in-car features such as satellite radio and bluetooth. You have ample scope of negotiation here with the dealership.
Extended Warranty: It is mostly set by the manufacturer and in certain cases, by third party vendors. It is solely your discretion if you would like to extend the warranty or not.
All the legitimate dealer fees on new cars are usually given on the invoice, and if you are unsure about any taxes or fees, don’t hesitate to ask for clarification. In case you want extra features to be included in your car, such as VIN etching, rust protection, and block heater installation, it is better if you shop around because dealerships tend to charge hefty amounts for these.
Are you interested in buying a new car, but don’t understand the complexity of the fees associated. Contact Car Cost Canada, and get a comprehensive dealer invoice report for absolutely free. This report entails everything that you’ll need to buy a car that entails all the required features and is within your budget.