Warning to B.C. car buyers
The suggested manufacturer's sales price sometimes bears no relationship to reality
I don’t usually have issues as a consumer because I don’t buy many things. But after 17 years of driving the same subcompact car, I stepped into a dealership last night.
For the first time since 2005, I asked a salesperson to tell me the price of a vehicle. In this case, it was a Kia Rio. It’s supposedly one of the least expensive vehicles on the market. It also comes with exceptionally good gas mileage.
I sometimes need to do interviews on short notice, so this seemed like the best choice. Because I work from home, I don’t spend a lot of time on the road anyway.
Much to my surprise, there were a bunch of unexpected charges beyond the price listed on the window. They included a $3,995 market-adjustment fee and a $2,800 VIP package.
This “package” included a free tank of gas and unlimited opportunities to put nitrogen in the tires rather than air. By forking over this fee, I could also park it on the lot at no charge if I ever wanted free rides back and forth from the airport. There were a few other goodies, such as free battery testing whenever I wanted it.
However, in my eyes, it simply looked like the most expensive fill-up I would ever pay in my life.
The salesperson claimed to have no latitude to do anything about these fees. He couldn’t waive any of them on his own. Any modification needed to be approved by his manager.
I can’t remember all the other fees, but one was for $895. There was another one for around $700, plus some smaller ones.
This pushed what I thought was a $21,000 or $22,000 car—including taxes and pre-delivery inspection—to about $33,000.
Had Kia told me at the outset that its subcompact car cost so much, I never would have visited this dealership and wasted my time and the salesperson’s time.
I felt misled by what the company says about its pricing compared to the reality in the showroom.
Once I returned home, I searched the Internet and noticed a Vancouver Sun article about how another consumer also suffered “post-sticker shock” from additional fees. The victim in this story was journalist and author Lisa Smedman.
Meanwhile, CBC News journalist Erica Johnson reported earlier this week that a Kia dealership had ordered a buyer in Edmonton to pay a $2,400 market-adjustment fee. This came after he had ordered a Telluride.
When he refused, the dealership cancelled the sale and sold the vehicle to someone else. The company claimed that market prices couldn’t be guaranteed over an extended period.
The dealerships justify their behaviour on the basis of a supply shortage of cars. Kia Canada denies responsibility because dealerships are independent businesses that are free to set their own prices.
The Korean carmaker markets its products with “suggested manufacturer’s retail prices”, which is how it weasels out of being held accountable for its advertised prices. And governments let them all get away with this.
I don’t expect this to change any time soon. Below, you can read why.
Consumer protection contracted to a corporation
Keep in mind that the first B.C. NDP government under Dave Barrett created a ministry devoted to consumer affairs. This landmark event was followed with the strongest consumer-protection laws in Canada, according to The Art of the Impossible: Dave Barrett and the NDP in Power 1972-75.
Nowadays, this responsibility is in the hands of a stand-alone corporation called Consumer Protection B.C. It has a 30-year-contract with the Ministry of Public Safety and Solicitor General to deliver consumer-protection services.
The minister only appoints one director. That’s actually legislated in the Business Practices and Consumer Authority Act. The directors appoint all the other directors, up to a total of nine, depending on criteria that a board nominating committee approves. It’s like a consumer-protection club of like-minded folks, most of whom come from the business community.
This effectively removes political accountability from consumer protection in B.C.
Last May, Consumer Protection B.C. conducted an online survey on various consumer issues, including motor-vehicle sales. But this discussion period expired a month later, well before these market-adjustment fees became newsworthy.
Since then, of course, buyers of new cars in B.C are being told that they have to pay whopping surcharges on top of a manufacturer’s suggested retail price. In my case, it would have added more than $8,000 to the sticker price, not counting additional taxes.
All of this is legal in B.C.
I am a privileged person who’s been dealt a good hand in life. I have the ability to simply choose not to buy a car at this time.
In addition, I can publicize my concerns. Maybe, just maybe, a car salesperson will contact me with an offer of a vehicle at the actual listed price, though that seems highly unlikely at this point in history.
In reality, after last night’s experience, I’m not in the mood to ever buy another car again if this can be avoided.
But I worry about those who need a car based on where they live or work, their childcare issues, or their need to look after elderly relatives.
Moreover, new Canadians who don’t have my level of English skills may also be at an extreme disadvantage when it comes to buying a car.
Addressing this inherent linguistic racism, however, probably involves bringing in legislation overhauling how consumer protection is administered in B.C.
That’s not likely to happen for years, if not decades, given the length of the Consumer Protection B.C. contract.
The new car dealers will always have the edge, no matter how much the government or the opposition parties bleat about being on the side of consumers. Especially when the B.C. government continues to believe that contracting out consumer protection to a corporation is in the public interest.
Update
Just after Christmas, I ended up buying a used Kia from North Shore Kia. The salesperson, Alvin Kuya, told me at the outset that he would not charge a market-adjustment fee. There were no demands for a VIP package. I like Alvin, who recently celebrated his 20th anniversary working there. I felt no pressure whatsoever from him. If you’re looking for a Kia, I highly recommend him. I have not been paid for this endorsement. In fact, Alvin may never even know of its existence because I highly doubt that he reads my Substack account.