W5: Hidden-camera probe into new car sales in B.C.

[Music] CTV's w5 the cars the deals low prices and helpful salesmen we don't charge you any fees whatsoever so why can't you find the car you want at the advertised price they know they can't deliver the car Kevin Newman with the APA s annual hidden-camera investigation you shake your head I can't even imagine what they were thinking the confusion of hidden fees 795 foot poker more fish be misleading ads and unavailable cars gonna be coming here the next three months all leaving buyers asking who can they trust we're trying to get as much money as we can and you're trying to save as much money as you can and a rapidly warming planet changes in the environment up here gonna affect people's ways of life puts our land in peril right before our eyes it's sort of fluffing off and thawing Avery Haynes investigates a looming ecological disaster he didn't say where canary in a coal mine as the slowly melting foundation of the nor it functions like the glue or the cement that holds the landscape together reveals dangers long hidden as that permafrost thawed that anthrax was released and the disappearing land not one year is the same as the next threatens more than distant communities what happens when it bombs here's Kevin Newman hello and thanks for joining us buying a car is the second biggest investment Canadians make right behind a house now when you negotiate a real estate deal there are lawyers agents mortgage brokers to consult but a car you're on your own so for more than two decades w5 has partnered with a consumer advocacy group to conduct undercover tests of how car dealers deal after all that time you'd expect to find fewer questionable practices think again [Music] looking for the absolute lowest price for your car every year about two million new vehicles are purchased by Canadians and there are a dizzying array of options different brands makes models wide-ranging deals ads promotions it's hard not to feel disoriented by it all so it's helpful to have a guide like georgina and the automobile Protection Association yes it is time for the AAP A's annual survey and this year this secret shoppers are in the Vancouver area to shop for new cars what did the APA set out to test so we're like a regular customer we start with an ad and then we want to put the sellers through their paces to see if we can get the advertised vehicle for the advertised price after scanning through the ads online and in newspapers the APA team puts together it's hidden cameras and gears up to start its undercover shopping so first up Columbia Chrysler the APA is shopping for a Jeep Cherokee sport listed at twenty four thousand nine hundred and ninety eight dollars or seventy one dollars a week on jeeps website and in the dealer's ad the secret shopper is introduced to camp for salesperson cameras gonna give you all the details and then hopefully - driving up here with a jeep later turns out cam in this dealership offers something unique we don't charge you any fees whatsoever so most dealerships have charged you any documentation fee of some sort potentially a transfer fee and potentially an employment of people we don't charge any fees whatsoever okay that's gonna save you five hundred to eight hundred dollars on a half already yes right off the hop and again that's just kind of phony money for the dealership to make extra money on top of the deal where we cam is offering some great insight into the car buying experience and he'll have more to add a little later on but he's just provided our first tip in what to watch out for while shopping for a new car lesson 1 additional fees and watch out they can add up this is free money for a dealership so we don't want to you know take that money from customers we'd rather you pay for the car and that's it now in BC additional fees are legal as long as they're disclosed in the ad and the APA found some fees and some surprises while shopping this ad from Kia Richmond it features a 2018 Kia Soul LX priced at eighteen thousand seven hundred and thirty five dollars a huge fifty five hundred dollar discount but then there's those fees for $105 mentation so a documentation fee and to go green fee to wax and polish a brand new car dozen ninety five foot Volker a seven hundred and ninety five dollar brokerage fee not found in the ad that's against the rules in BC all fees must be disclosed good question what's a four hundred and ninety five dollar documentation fee for a damage search and safety inspection on a brand new car facility storage for seven years mmm-hmm what am i storing they'll store your documents for seven years document that we are solving the cartoon you sort of make it official a fee for official paperwork sounds a lot like a receipt it's whimsy they're just inventing any old baffle gap to try and get an extra 1200 or 1500 dollars out of you to top things off the APA found that the MSRP in the ad have been inflated by roughly $2,500 to make the discounts appear deeper all that adds up to a fail for Kia Richmond what was the fail their brokerage charge ridiculous total of extra charges as well you shake your head I can't even imagine what they were thinking when they prepared their cellar with that list of extra charges so w5 wanted to talk to someone from Kia Richmond to discuss the APA spendings Corey Di'Anno he's the director of sales replied to our initial email saying Kia Richmond is a full disclosure transparent dealership with a strong commitment to customer satisfaction but then he stopped emailing so we tried to reach Corey again yeah hi there I'm trying to follow up on an item with Corey Dion oh do you know where he's working out of this office today they tell us Corey is working at the dealership across town so we try there Kevin Newman with ctv's w5 we've been trying to view Corey for a couple of days now are you Corey no I'm Alex okay would he be able to talk to us we've sent a bunch of letters and it's about an EPA report that was done in your dealership and we'd like to get Corey's response to that ever again well his there's no Garrett knowing them well apparently he's not here either which takes us back to Kia Richmond again I'm Kevin Newman with CTV's w5 we're looking for Corey dno is he around today he is no but we were just there and know Corey so without answers from Kia Richmond we took the AP A's footage and our questions straight to the provincial regulator the vehicle sales authority of British Columbia and we sat down with Doug Longhurst the director of learning and communications we 95 for 795 foot poker location B well that's a very creative list that's a that's probably will surprise the agency not only enforces provincial legislation it also certifies and trains sales staff through courses offered in this very room would he have passed your course if that was the way he was proceeding sadly yes so I mean if he was if he's an accredited salesman what do you do with that well what we would do is we would open an investigation because we would want to start with finding out if we could the advertising that went with that so how stronger your enforcement powers they are significant and if they prove it to be enough of a disincentive to stop people from trying it again some things go in in waves we think we're making progress and then oh you know it things rear their ugly head again alright so let's head back to check in with cam at Columbia Chrysler he's already shared one tip with the secret shopper and he's about to share more of his helpful insider knowledge along with another lesson because usually what they call it as he build it on a nerd and a nerd vehicle I know it's gay it's like it's industry it's industry lingo but basically it means a vehicle that is bare-bones so it's like it's the skinniest of all the vehicles kind of thing and generally speaking they don't even build them that wages for the sake that most people they just that's why they have this starting at prices and stuff like that lesson to watch out for nerd cars and ads promoting those rare stripped-down vehicles at very low prices just to lure you into the dealership well the APA found an example of that too during an undercover visit to Carter Honda in Vancouver where an online ad lissa Honda Fit DX at sixteen thousand eight hundred and forty five dollars but then here's what they told the secret shopper about it or see the DX's the last person that actually about six months great a six-month wait Carter Honda advertises a vehicle it does not have in stock and that's a fail according to the APA so the search moves to Vancouver Honda this time shopping an ad from the National Honda Canada website offering the same model 50 X at a price of 15,000 190 plus Freight in PDI manufacturers it's gonna build for you it's gonna be coming here in the next three months a three-month wait hoping for a car a little sooner than that they check for an in stock 2018 fit LX the next model up in terms of price [Music] but no luck with that model either so the secret shopper suggests they check other dealerships in the area for the LX but as bad news there as well apparently we checked everywhere all the stores the eighteen they don't make it off it's not as popular but you don't have the 2018 now everybody has it in open-ocean no DX from the ad and no LX available either so they claim that there are no L X's around the Lower Mainland so then they go off and they try to sell them what well we're looking at more expensive models or leftover 2017 and that's what happens with no comparably priced 20 18s available the salesperson points the shopper towards their own more expensive in stock models the next vehicle offered is a $24,000 compact SUV that's roughly $8,000 more than the car the AP a shopper came in for and an entirely different model an S II model in 2017 for $21,000 plus tax and then they tried to unload some of the 2017 s they still have left in stock Vancouver Honda earns a failing grade from the APA where did it fail manufacturer advertising bait-and-switch we saw this year a big problem with bait-and-switch advertising so vehicles that are advertised that you have no hope of finding at the dealership and also extra fees so dealers are padding on fake charges or for services that you never ask for that are not in the advertised price the long wait for that good deal and you have to wait about six months these buyers in a bind do you buy that it's preposterous when w5 continues [Music] w5 is riding along with the Automobile Protection Association undercover shoppers in Vancouver the APA and it's hidden cameras are shopping for new cars on the lookout for dealerships who aren't playing by the rules like what the APA found at kia richmond levin 95-foot volker HP an additional fee not disclosed in the ad or what the APA couldn't find at any of the Honda dealerships they visited a 20-18 50x priced around $16,000 so the salespeople offered their more expensive makes and models I mean I can't spend $25,000 I don't want to but here's the bind the dealer is in some of the online ads originated from Honda Canada's national headquarters the dealerships don't have control over vehicles and pricing promoted by head office so a customer comes in with his national ad that says hey look what I can get my new Honda for what are you hearing from salespeople about what kind of position that puts them in privately salespeople are uncomfortable they say the first five minutes is you know trying to first of all not totally lose the customers trust and kind of move them off that their reason for coming in because they know they can't deliver that car they know they can't deliver the car that's right well to test that out w5 went online to do a little car shopping on the Honda Canada website using a Vancouver area postal code we created a customized brochure complete with pricing for the exact Honda Fit DX the APA shopped and we were told we could meet it at Vancouver Honda even though that dealership has none in stock and built for you it's gonna be coming here yeah so they say congratulations Kevin Newman here's your Honda DX and then they said say hello to it right there that's the dealer we went to right well you'll never say hello to it right there they don't have that car so w5 requested an on-camera interview with the dealership to discuss the APS findings and Vancouver Honda wrote us back admitting that they didn't have that particular Honda Fit in stock when the shopper arrived but that we didn't form the mystery shopper that we could order in that unit they also noted that that online ad was placed by the head office of Honda Canada and that in accordance to BC advertising guidelines we will never ourselves advertise it unless we have one in stock Carter Honda that's the other dealership which didn't stop the DX also references potential confusion with the manufacturer advertising in a statement to w5 when you search by model you'll see that we are not showing any fit DX models in stock and that the screenshot that you sent is more of a representation of Honda's full lineup that is pulled from a different area of the website although we were not specifically promoting this model you have brought to light a need to relook at this one area so is it a reasonable defense for a local dealership to say you know the ad that that customer came in wasn't our ad it was a head office add cumin that's not a defense that just means the manufacturer is rolling the boat but it's still a leaky boat and could anybody honor that $16,000 price point that you found nobody don't advertise it then put that in your ad this is a stripped-down model nobody wants we don't have it it's a $19,000 car cross out $16,000 you came in on that price point so we tried asking Honda head office near Markham Ontario why they would be advertising a vehicle dealerships rarely stock but once again no one was willing to speak to w5 on camera Honda did offer up this explanation Honda CA is not a regional advertising tool rather it's an online resource do you buy that it's preposterous it's a advertising tool online with a representation on the model and on the price so let's check in again with cam at Columbia Chrysler remember him with the helpful lessons and what to watch out for while shopping for cars well cam claims he's lucky to have in stock the vehicle featured in the G pad I have no incentive to a upsell you be tried to you know squeeze every penny out of you it's actually my best in just to a frenzy the best vehicle perfect vehicle for you and then be help you get the best deal possible this visit seems to be going well it looks like cam and the secret shopper may be able to get a deal done cam has even sweetened is offering the shopper a higher end Jeep for the same price as the one in the end and I would get it for $24.99 you will possibly even less if I can do my job right ya know I would build it on what we call prime credit here I can give you a copy of this to take if you watch an impressive deal and the shopper is handed a sales brochure with the details and then while out for a test-drive the conversation turns to warranty and a buck for rust protection it is an aftermarket purchase though and it's called undercoating and this is where the visit with cam takes a turn chrysler does offer five years of rust warranty standard on the jeep he appears to be upselling the shopper and as the test-drive continues the APA crunches the numbers given to the secret shopper the ad the APA shopped featured a $71 a week payment so a Columbia Chrysler has the right language around transparency but what we found is the advertised payment which was a weekly payment of $71 got bumped here's how in the conversion from a $71 no tax weekly payment to a 174 tax inclusive bi-weekly payment is an increase of $14.90 bi-weekly now that seems a small increase but over the course of the loan the APA calculates the change adds over three thousand dollars to the deal she thought she negotiated so in spite of all the promises of transparency and all of cams tips and lessons about what to watch out for Columbia Chrysler receives a failing grade from the AP a Columbia Chrysler failed because they boosted the payments without telling the shopper and a misrepresentation they were deceptive about the rust warranty so w5 paid that dealership a visit and we spoke with Justin Kabara the general manager we do this presentation full disclosure no extra fees at all like just the price of the vehicle plus taxes which was well that's all admirable and that's all things that people want but but what about that same transparency and the financing cost and but that's what's gonna happen so here's the thing so so we charge $24,995 plus taxes and then she goes into the business office at the average rate okay a rate that were positive about and then if and when she does qualify for the better rate she gets the better payment right automatically automatically absolutely he claims a higher interest rate than advertised was charged because the secret shopper hadn't yet qualified for the lower rate so did you make that clear to her I didn't I can tell you that um the salesperson and and the sales manager are very very reputable like they they do really well they get good Google reviews and stuff like that they're good people so the other issue that came up was when there was a discussion of warranty for us proofing what was the warranty that was asked was the question asked and the answer given was well we have aftermarket protection that you can add on to it so it wasn't really an answer to the question of what is the warranty protection that's built into the vehicle was that the proper way for your salesperson to proceed I'm absolutely not I can tell you I I saw that in original correspondence that we had I've addressed it with my team so bottom line 13 of the 16 Vancouver area dealerships fail this year's APA survey it found issues with hidden fees warranty misrepresentations bait-and-switch advertising and unacceptably high extra charges in this market an honest dealer a straight deal is actually at a disadvantage compared to the competition because they are losing five or six or seven hundred dollars of phony charges or unadvertised additional charges that their competitors are adding to the sale and that's a problem too because actually what you're doing is incentivizing deceptive behavior so the big lesson turns out to be a familiar one even when it seems like everything is on the up and up right we're trying to get as much money as we can and you're trying to save as much money as you can always sure the deal you've been promised is the one that's delivered well if you'd like to check out the paperwork for yourself there's a link to the EPA's 2018 report on our website and some tips from Georgina on what to watch out for here's what straight ahead a looming threat as the climate warms of course the permafrost will change puts a homeland at risk we're much lation above 500 Peter grown on the ocean tight when w5 continues

Channel: Official W5

Views: 189,323

Rating: 4.486166 out of 5

Keywords: W5, car sales, hidden camera, Automobile Protection Association, undercover, auto sales, car dealerships, car ads, new car, sales tactics

Id: RFIuO8mn55o

Length: 24min 1sec (1441 seconds)

Published: Sat Apr 14 2018

Reddit Comments

[u/SpartanFlight]

poor cam, he actually owns a pretty sweet abarth, and actually a pretty nice guy (didn't sell me my vehicle)

I got my car from columbia chrysler, when they presented my payments i was ok with it, then when we got to the finance, "1500 in extended insurance"

demanded to get it removed, was such a pain pissed me off to no extent.

i was pretty annoyed, but they did give me a new abarth for 24k, so I wasn't too upset.

also know of another vietnamese girl with big fake knockers who did finance at a honda dealership in the GVRD. Noticed she had a really nice apartment, and was taking lots of trips... then I realized they get a massive bonus for selling extended warranties.

[u/ibluestone3]

I was shopping for a new HRV last year and had the exact same experience at Vancouver Honda. According to them the spec I wanted (2WD, mid-level trim) was not available on their lot or anywhere in the lower mainland. The salesperson told us that 2WD cars are "extremely unpopular in Canada" and Honda barely manufactures them.

Since I have no dreams of taking what is essentially a Civic (same platform/engine) offroading I drove across the Lions Gate and got a great deal on the trim I was looking for at Pacific Honda.

[u/walrus0]

If you are ever buying a new car from a dealer and they pull out the "four square" paper and put it in front of you, just walk away.

Get your own financing and negotiate on the out the door price alone.

The four square: https://www.google.com/search?client=ubuntu&channel=fs&q=car+dealership+four+square&ie=utf-8&oe=utf-8

[u/pfcthrow2017]

I found nothing wrong with Honda and Chrysler.

Maybe there is an issue with Jeep sales who didn't answer "rust warranty" (probably he didn't know?), but knew about their extra "undercoating". I would only consider that as an under-educated sales.

[u/thefakejimpatterson]

Wait, hold on a minute...

Shady car salesman?