W5: Undercover shoppers test Calgary car dealerships

when Alberta's auto industry watchdog was criticized for not doing enough to protect consumers including after several w5 investigations the province overhauled the agency so we have partnered again with the Automobile Protection Association to test whether that's made a difference in how car dealerships in that province conduct their business w5 s John Woodward and accompany the APA to car Lots in Calgary to see whether buyers are now getting fair deals and better treatment so I've got a few ads here that we've pulled together comparing ads it's the kind of thing most people do when they're buying a new car so you can see as air conditioning automatic transmission right now this group is looking at the ads for you to find out which ones you can trust George Eenie is the president of the Automobile Protection Association the consumer watchdog group is on a mission it wants to find out if dealers are delivering on what they promised in their ads this year it brought its annual undercover survey to the new car showrooms of Calgary people want to sell cars I think there's a culture of deceit unfortunately in part of the industry and a lack of will at the level of the manufacturers I think they've gotten away doing this for a while after George sets out the marching orders the APA shoppers hit the streets cameras are connected and hidden along with audio recording devices the APA secret undercover shoppers will visit 20 dealers first up Eastside Kia the secret shopper spotted this deal a 2016 Forte 5 LX for fifteen thousand and five that's eighty five hundred dollars less than the manufacturer's suggested retail price so this part so it's this this exact car which is this is fifteen thousand and five dollars the price seems too good to be true for a brand new Kia but the salesperson confirms the deal and is ready to write it up but there's a problem the car in the ad is sold the salesperson has a compromise a similar model but with a higher price nineteen 590 that's forty five hundred dollars more than the car in the ad as for the first Forte that was sold suddenly it reappears less than a week later the car shows up in the Calgary Sun with the same stock number but the price is now eighteen thousand seven hundred and eighty five dollars almost four thousand dollars more is it possible that this car was sold and returned maybe sure so somebody put in an offer on a $15,000 car the offer didn't go through and it suddenly jumped to eighteen thousand dollars when it reappeared on the market I guess it's possible all that enough to give Eastside Kia a fail the shoppers now turn their attention to a larger vehicle with larger savings varsity Chrysler is up next with what sounds like a bargain a 2016 Dodge Grand Caravan a hot deal at twenty five nine ninety eight a savings of more than sixteen thousand dollars but right off the bat the shoppers are told the van has mileage on it it's not a new van but the salesperson assures the shoppers it was only used by the dealer what's the definition of a new car well a new car should be a vehicle that hasn't been driven very much how much is too much well in transit I could see a vehicle having twenty-five or fifty K theoretically once you're showing it or using it to drive around it's a demo it's not really brand spanking new it had 3,000 kilometers on it is 3,000 kilometers still a new car 3,000 kilometers it's not a new car anymore no in this case with that van did they advertise that it was explicitly new in the case of varsity Chrysler it was a bunch of vehicles featured that appeared to be new 2016 but when we got to the dealership this one was a demonstration [Music] fee of 571 dollars and that's on top of the sale price as far as the API is concerned it's bogus first of all it doesn't cost you five hundred and seventy one dollars to fill out paperwork our extra fee is allowed in Alberta Alberta like several other Canadian provinces has a rule called all-in pricing so the advertised price has to include everything except your taxes and maybe one or two small government charges the prices the price is the price sounds simple doesn't it it's anything but simple turns out the black Caravan the shoppers came in for it was sold so they're shown a red model instead the same price is the original van but this one has been driven even further yes you heard correctly the van they do have has more than 5,000 kilometers on it could I take a Dodge Caravan drive it 5000 kilometers literally across this country and then sell it making it appear as if it was a new car is that okay as a consumer the day you drove off the lot with it you would be fingered so it could have 50 kilometers on it but it would have already been titled to you and that makes it a used vehicle that's the line in the sand the APA believes varsity Chrysler misrepresented a used vehicle as new and added a 571 dollar documentation feat on to the price that got them a failing grade CMP Auto is next on the secret shopping spree the dealership is offering up a 2016 Chevy Cruze for fourteen thousand six hundred twenty eight dollars a savings of three thousand dollars off the suggested retail price according to the ad the Cruze is loaded with options including a backup camera and cruise control that was an excellent deal for a Chevrolet Cruze was that the real deal well as it turned out the question we should be asking is it was it the real car it's good so far so good but there's a hitch it seems there's been a mistake in the newspaper ad this cruise doesn't have cruise control or a backup camera the salesperson does offer to pay for installation of both options to make up for the mistake in the end we can still put a vision camera rear vision camera a camera but then the salesman drops the f-bomb F for added fees he add the GST on on the price plus 936 you don't get GST on on the piece 976 nine hundred and seventy six dollars in fees that weren't advertised that's on top of the price that's earned the dealer a failing grade from the APA so far the APA shoppers are off to a bad start bringing in the big guns the dealership has invited in a special team of commandos to make buyers feel special I've done over 8,000 contracts when w5 continues the APA undercover secret shoppers have been busy visiting 20 dealerships in the Calgary area as part of the watchdog's annual survey the focus this year is on advertising and so far the dealers are not making the grade we saw some very creative people writing the ads the real surprise is how lacks the oversight is because these are this is all very obvious stuff for us to find we don't shop for very long before we turn up really bad advertising CMP Auto admitted an error in its ad for a loaded 2016 Chevy Cruze then it tried to charge nine hundred and seventy six dollars on top of the price of the car w5 requested an on-camera interview we were denied but the general manager Kyle ro Morrell claimed they knew they were being secret shopped by the APA and in an email rights quote we do train our salespeople with all in pricing and review this with them regularly he added if a salesperson misrepresented the price then our sales managers would correct this upon the approval of the sale to the customer but the fact is the salesperson did add extra fees which are forbidden in alberta w5 dropped in on CMP okay we're here from CTV's w5 but finding mr. Roemer rule wasn't going to be easy when we finally found a manager he wasn't talking this dealership failed the APA annual service survey so you're not willing to answer any questions about how your dealership failed the APA survey we're not doing interviews we're not authorized yes we had questions about the fees the administration fees your dealership charge the APA and I'll serve it you don't have anything to say to us or the other customers about fees that you charge we left CMP with no answers at Eastside Kia it was a case of the missing car one min it was there the next it was sold but then the same car with the same stock number was advertised less than a week later at a higher price we were anxious to talk to Eastside Kia about how an advertised car could be sold and then advertised again our interview requests were denied and the company told us to stay off its property in a written statement dealer principal Kelly temple informed us that an internal review was conducted to look into the details of the situation and that Eastside Kia takes its responsibility for automotive advertising guidelines very seriously he says due to Alberta privacy law he can't comment on the specifics but says the company has ended its relationship with an employee in question remember varsity Chrysler it's hot deal on a grand caravan turned lukewarm after the APA discovered the van had five thousand kilometers on it adding insult to injury the dealership was adding an extra documentation fee of five hundred and seventy one dollars varsity Chrysler didn't respond to w5 s request for an interview but we decided to pay a visit looking for answers on why a documentation fee is being charged whether we're from CTV's w5 and just sent over here to try and talk to a manager about some questions we had okay about ty the APA annual survey and what happened here is when they were coming in to search for a Dodge Caravan and instead of getting a new one they were given one that had three thousand kilometers on it okay another option was another Dodge Caravan with five thousand kilometers on it so even more and then on top of that they were they were asked for five hundred seventy one dollars in fees so it's that okay if if we're telling we're told by a ambach and the APA that that is an unacceptable fee to charge a consumer that it's against Alberta long lambic says a documentation fee is okay if it's at this town it has to be disclosed in the ad is what we're told oh it might be standard policy at this dealership but the rules in Alberta are clear all fees must be included in the price of a car that answer shows you the contempt dealership management have for the regulator the fact that they have absolutely no concern they don't think they're gonna get punished they don't even think there's a problem anymore buying a car can be a confusing and intimidating experience for consumers even the APA secret shoppers had their hands full when they dropped in on courtesy Chrysler what started as a routine shopping trip for a grand caravan at 30% off the manufacturer's suggested retail price became a marathon over the course of their visit the shoppers had to negotiate with three salespeople including what appeared to be a rep from Chrysler's head office so I'm truly here to help like I said a non-commissioned we don't work the store my goal is to get as many dogness Chrysler's and jeeps out on the road so that you're endorsing me the friends and family of co-workers and so forth okay it turns out courtesy Chrysler was hosting a marketing event known in the industry as a private sale at two of the theö ships the APA visited a private sale event was going on and in those situations the dealership has invited in a special team of commandos to run a more pressured sales event and those people represent themselves as working for Chrysler Canada for the manufacturer but in fact we discovered later that they don't who do they work for they work for marketing companies they may come in with the blessing of the manufacturer to move the metal the prices are not better necessarily than what you could get on a date when a private sale isn't going on in fact w5 has learned that although the rep is registered to sell cars in Alberta he actually works for a sales training company called absolute results if I can't make it work again what we can tell you is there is a certain amount of deception and misrepresentation going on inside the event they are basically a hired guns from a marketing company a consumer would have no chance against against those practices yeah and I've also got some extra money for you from the manufacturer open above would ever do that okay but I've already chatted with Eddie yeah Jake gave me the ride act and told them to carry okay Eddie the sales manager takes his best shot now that price will have to it's plus tax on fees and Plus appraisal all original yes rate is 1795 now guys this incentive plus the the fees will go for 686 okay that is dark that they should be and they advocate and I am Vic fee and Vic is the provincial regulator it has a fee but it has to be included in the advertised price but there's more and then we offer we apply a tire and rim protection in the four years or 80,000 farmers that's eat any night suddenly the Dodge Grand Caravan for twenty thousand nine ninety eight doesn't sound like that much of a deal six hundred and eighty six dollars for the Anne pick and documentation fee and eight hundred and ninety nine dollars for tire and rim protection a total of fifteen hundred and eighty five dollars in extra fees that's a fail ambach does charge a fee for every car sold in Alberta but it's not six hundred dollars the ambach fee is six dollars and twenty five cents but dealers will bundle that with their own personal charges and in one case actually saying it was like ambach and is six hundred dollars so the M Vick portion of that fee is one percent correct the ninety nine percent of that fee goes to the dealer gravy for me courtesy Chrysler was apparently willing to discuss the APA visit but our repeated attempts to schedule an on-camera interview failed we had questions about the extra fees so we dropped in and visited the showroom and you knew Samantha said oven time we've already tried that sir well this isn't gonna be there out to go completely years we all we had with a couple questions about these pcs no answers add it all up the final score this year leaves a lot to be desired of the 20 dealers visited by the APA 17 fails when you have those high failure rates 17 out of 20 it points to a systemic problems in the industry it's not the actions of a few rotten apples an Vic the Alberta motor vehicle industry council is the provinces regulator of new and used car sales the council has been under intense pressure from the provincial government for its handling of investigations related to infractions in the car industry a scathing report released last year resulted in the dismissal of its president the man in charge now is interim CEO Doug lecour good to meet you yes we do come on and have a seat w5 wants to know and explains moving forward when it comes to dealers seemingly breaking the rules at will we've seen a lot of fees the undercover operators found a lot of fees being charged where there was Freight fees or dealership fees or paperwork fees is any of that if it's not advertises any of that okay no it's not all in pricing is all in pricing so when they advertise a price that should include everything except GST and financing charges do you respect that the the numbers that APA is found do you accept that that's a sign of a problem in the industry well I think that there is probably always going to be dealers that are in fracturing the advertising regulations and that's why we have one person dedicated to that and that's why we'll continue to monitor the industry and we will deal with complaints that we receive would you watch the undercover video either from the APA or in the w5 story and would that be enough for you to do something oh no it would not why not I would want to get the full facts before I would take action on that would you investigate it I doubt it we might would have to look at the circumstances so you would have a offense being conducted on video using an Vic's name to collect money for a dealer apparently but that wouldn't be enough for an investigation as the video unedited what was the day that it was shot on those are questions you might ask in an investigation yes we asked the CEO if when he saw the hidden-camera footage that your shoppers amassed if he saw that hidden-camera footage on w5 would that be enough for him to consider starting an investigation and his answer was no a regulator that will not look at the findings in a w5 report has their head in the sand they should be very interested in having an independent review or audit of what's happening in their market our regulator that relies on the Sheep to catch the wolves is not doing its job the reason why they're called deceptions and misrepresentations is because the public actually doesn't know that they're being fleeced it's such a mess out there what advice would you give to the consumer to make sure that they don't get hosed we ask ourselves that question if we were shopping along without a w5 camera without a car dealer helping us in the background we think we could be had you

Channel: Official W5

Views: 2,556,019

Rating: 4.3286529 out of 5

Keywords: W5, investigation, ctv news, hidden camera, car dealers, automobile, APA, undercover

Id: z9YKti86v58

Length: 21min 9sec (1269 seconds)

Published: Tue Mar 28 2017

Reddit Comments

[u/ekpg]

I love when they try to drop some giant ass fee.

"Oh yea we gotta add in the detailing fee for $970 and the Turboencabulator reinstatement fee for $700"

[u/jldude84]

This seems like something to post in r/askcarsales.

[u/muchvape2000]

As a Calgarian I very much want to know which three passed

[u/misterE_STL]

Test drove a Miata RF this weekend with my brother. When we pulled back in some sales douche said "That's the RF model, you know...those are really rare!"

My response: "You have three of them. The other dealer has four"

[u/cooterman69]

They think they slick lol

[u/SweetWaterSurprise]

Are you telling me that car dealers aren't being 100% honest? How Dare You!

[u/Axxion89]

To play devils advocate, towards the end of the video when they try & get the regulator to say "hey we have this all on video, will you launch an investigation" & he asks "is the video unedited, does it show all the pertinent facts" they conveniently don't answer the question....

No I'm now saying this ad deception doesn't happen, it still does. Open any Sunday paper and there are still dealers here in the US that pull these games "$8K MSRP on a Yaris" "$99 lease on a Camry" "Guaranteed $5K for your trade". If you read the fine print it will say things like "Only on stock #LOL" or "With $10K down" or "Trade in plus paying full price for a loaded Denali Yukon".

But the thing is, back in the 90's and 00's I can see how a lot of people were taken for a ride & these tactics work. But today everything is available online. You can see the prices people pay for cars on avg with truecar, use Costco to get a no haggle price, hell there are even 1 price dealers now that have no gimmicks for new & used (Carmax). I bought 3 cars in the last 12 months (for myself & inlaws) and I was in & out of each dealer in 2 hours. I researched the price to find the best price I should pay, looked up the dealer reviews & picked only the best reviewed dealers, looked up their dealer fees (which are in the fine print on their site), emailed the car & price I wanted, then showed up & bought the car.

People on this sub & plenty of others decry stealerships and tactics etc. but if you take the few hours to do research & educate yourself, you won't fall for these games. Its gotten much better in recent years. Fact is if you support the good dealers & leave the bad dealers to rot, they will go out of business. If you continue to fall for these ads that are too good to be true, then you will allow this to happen. This advice goes for many industries like furniture & home services.

[u/barney420]

Sadly people don't care for shady marketing anymore.

[u/blue_bomber697]

I was very thankful to have a solid dealer considering this was filmed in my province. My dealership did have a documentation fee, and it was $10. I was perfectly fine paying that very reasonable price. Some dealers when I was shopping around did have a $595+ documentation fee which was just ridiculous. Not something I'd ever pay. Now knowing that this is illegal, I'll be sure to make a fuss and point that out to the manager should I ever have a dealer try and push that on me again.