Auto dealers in Quebec are taking advantage of the strong demand for certain models to sell them $5,000 to $10,000 more than the suggested price, which might be a violation. They circumvent the law by “disguising” new cars as used cars.
At Volkswagen Centre-Ville, in Montreal, for example, there is a used 2022 Golf GTI listed at $44,995 before taxes. The car has 73 kilometers on the clock.
Photo taken from the Volkswagen Centre-Ville Montreal website
The Manufacturer’s Suggested Retail Price (MSRP) is $37,745 for this popular model that is impossible to find new.
“It’s new, but we’re selling it as second-hand,” admits one of his salespeople on the phone without embarrassment.
He explains that the dealer “bought” it from another dealer, and that it was already registered, i.e. the warranty started in July 2022.
“It’s the market price. The car is brand new and that’s what counts,” he says of the $8,000 over MSRP.
In Quebec, the Consumer Protection Act prohibits “requiring a higher price for a good or service than that which is advertised”.
“We can hypothetically consider a violation situation where a merchant would conceal the fact that the vehicle is new to avoid the obligation to sell at the advertised price. [PDSF ou autre] and demand a higher price,” explains the spokesperson for the Consumer Protection Office.
Frequent for 2 years
This “makeover” of new cars into used cars has been frequent for 2 years, observes George Iny, president of the Association for the protection of motorists (APA).
With the scarcity in the new market, wait times have increased and customers are willing to pay more to get a car quickly.
“It’s often a regional practice, the merchants get together to do it,” notes Mr. Iny.
Typically, these cars all 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, the Toyota RAV 4 Prime and the 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 AutoHebdothe reference in Quebec.
The 2023 models are rare for the moment, since they have just arrived on the market. But there are already some, for example a 2023 Crosstrek with 100 kilometers on the odometer displayed by the Location Prime Leasing dealer at $5,000 more than the MSRP.
A suggested price
Is the MSRP an advertised price? Not in the sense of the law. But George Iny believes so. “A new car disguised as a used car should be bound by the manufacturer’s representations,” he says.
When Toyota, Subaru or Volkswagen advertise new cars at a certain price, they should sell them at that price, “otherwise it is false ”.
“Builders are aware of make-up. But they’re thrilled when the dealer sells his quota and they turn a blind eye. They will move if they are forced or if their reputation is at stake,” says the president of the APA.
