New vehicles disguised as used cars to inflate prices

New vehicles disguised as used cars to inflate prices
New vehicles disguised as used cars to inflate prices

By Julien McEvoy

Car 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 could 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 GTI listed at $44,995 before taxes. The car has 73 kilometers on the clock.

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 “purchased” 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 two years

This “makeup” of new cars into used cars has been common for two years, observes George Iny, president of the Association for the Protection of Motorists (APA).

With the scarcity in the new market, waiting 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 RAV4 Prime and the Subaru Crosstrek are often subject to this “makeover”, as are almost all electric car models.

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 advertising”.

“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.

The article is in French

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