Dealership Coercive Tied Selling: Legalities? - Ford Powerstroke Diesel Forum
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  #1  
Old 02-05-2014, 07:34 AM
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Dealership Coercive Tied Selling: Legalities?

Mods, please move this thread to the appropriate forum category if I got the location wrong: I took my best guess.

So I recently bought my 2014 F350 Platinum here in Alberta, and I felt I did so-so with my negotiating of the sales agreement. I got a good price on the truck, but when I went through finance, I am certain the dealership recovered much of their "lost" money through all the extras. I know they are sales people and that is their job, but some of it operates at the edges of ethical behavior.

One item was that they offered me a 1% lower interest rate IF I bought additional protection package (rustproofing, etc) with them. Initially, I had declined all of this. I caved and went for the 3M, (the 3M was something I was planning on buying away from the overpriced service offered by the dealer) in order to get the better rate. I justified it in "it might save me money over the financing period", but later regretted it, as they did a crap job of the 3M anyway and are presently re-doing portions of it.

Second item was "nitro" charge. Initially I was told I had to be charged this $400 amount as "it had already been applied to the vehicle", but when I asked more questions, it became clear to me that this was in fact a road hazard warranty on the tires and wheels, as well as the (cheap) nitrogen to fill the tires. I refused to pay this fee and they removed it from the sales agreement.

They also tried to get me to buy the $400 "etching" package, which was also declined.

I tried like crazy to get the $400 "documentation fee" waived, but the finance guy wouldn't budge, saying all dealers charged something and they (the dealership) were forced to charge this to their customers. So I paid it, because even though I know that the GST and tire levy are the only true legally binding charges over the price of the vehicle, every other dealer is playing the same game.

So while depositing proceeds from sale of my Toyota truck at the bank, I saw an info pamphlet about "Coercive Tied Selling" and picked it up. Interesting, but I could not find information specific about the interest rate offering on my vehicle purchase.

After the usual government shufflling around to different departments and such, I ended up talking to someone at (Alberta Motor Vehicle Industry Council) AMVIC, who told me that as long as the dealer was upfront about the terms of the interest rates and packages offered, what the dealer did (although ethically not so nice) was not in violation of any industry practices. She did tell me that although the doc fee is not legally binding, the dealer can say "take it or leave it" to the consumer and the consumer has the right to walk away from the deal.

But she did say that I had a legitimate beef over the "nitro" charge since the dealer sales guy had initially told me that it was something that could not be removed from the deal, and that was not upfront and accurate. Even though this was a verbal statement from the sales guy, and the charge was dropped from the paperwork, a complaint could still be filed through AMVIC for this and investigated.

The sales guy happens to be a friend of my wife's family and actually seems to be trying to do the right thing most of the time. Yes he is a greasy salesman, but he made a few other small mistakes here and there on vehicle details and such, which were corrected / clarified. I honestly don't know if his mistake about the "nitro" fee was intentional or not; he seemed confused at times.

So I hate to get the guy in trouble as he still seems to be trying to take care of me with my 3M issues, but at the same time, the financing and paperwork left me feeling rather disappointed and feeling like I didn't get such a great deal in the end with all the extra fees, extended warranty, maintenance package, etc that I bought.

I would consider talking to sales manager to see if I could get the $400 dealership "doc" fee reversed (using the legitimate "nitro" complaint as my leverage) but I am not sure I would be successful. I don't know if it is worth potentially upsetting everyone over it.

I don't worry about retaliation so much, as I plan on servicing my vehicle at this dealership, as they aren't known for good service, but the sales dept is supposed to be mostly OK.

Anyone have any advice on what my next course of action should be?

I wouldn't mind the $400 if I could apply the pressure of the AMVIC complaint to get it out of them. Not sure if it is worth potentially burning a bridge over.
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Old 02-05-2014, 07:46 AM
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I've only heard of Tied selling in regards to banks selling third party services.

Your example here seems more like a dealership "up selling" you yet still allowing you to walk away... IMO there is a clear difference as this "up selling" happens in every function of the dealership from service, to warranty, and most definitely in the sales. .

As for the $400 causing buyers remorse, which seems more like what you have going on, you have to determine how important it is to waste your time and effort.

I would like to know if you get it resolved as an eduction for me on the selling laws.
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Old 02-05-2014, 08:07 AM
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Yeah I will be honest, there's some amount of buyers remorse here that I wasn't more prepared running through finance. I stand by my decision on extended warranty, but I seriously question whether the maintenance package was a good idea or fair value. I asked for specific information about diesel repair and service costs and was told that information was not available in finance dept, that I would have to sit down with service some other time and find that out. I should have pushed back and done that at that moment in time, but I let myself get pressured into making an uninformed decision. I honestly had no clue what to expect with so many more choices presented to me (compared to my last purchase) and they were trying to hurry me along. As it was, I made them stop, slow down and re-explain several things and ask for more information, but I should have done a better job and been prepared to walk away at that point still.

I guess my post is more intended to communicate that the upselling they did on the interest rate did not meet the definition of "coercive tied selling" and I wanted to share this information with others, so that they know.

There are so many different ways for them to "get" you as a consumer, and as someone who has only bought one other new car (nearly 13 years ago), I was still not as prepared as I should have been, even though I educated myself a bit.

I had watched a local news story about some shady practices by a local Toyota dealer, along with AMVIC guidelines, then the CBC's "Marketplace" feature on vehicle buying. Still I don't know if it was enough.

I probably won't pursue any further action with the dealer as I feel there is little to gain in my case. I just post it as an education tool to share what I learned.

Here in Alberta, businesses are hell-bent on trying to take you for as much as they can, and deliver the least in return. Many of them will screw you over and then expect you as a consumer to thank them afterwards. Knowing your rights as a consumer and aggressively defending them is a good first step.

I guess I am a little frustrated that the "family friend" deal wasn't as good as I hoped it would be.
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Old 02-05-2014, 08:27 AM
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You always have the right to say no...

I've made a ton of poor decisions hastily, especially some on this truck as well. You just have to chalk it up as a lesson learned.

Walking away is always an option.

If you are really bothered by it, go on yellowpages or other review sites and leave negative feedback about their sales tactics you don't find professional. I use website reviews a lot (like yelp) and it helps me make decisions about places I do business with.
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Old 02-05-2014, 08:33 AM
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I hear ya, and I think your points are all valid for someone shopping.

Remember, those guys/girls are trained to play on emotion and close the sale. In most cases ALL of their actions (especially the "looking out for you") are intentional.

My advice for anyone shopping is to always, always, ALWAYS, walk away... And what you will notice is that they dont want you to, why, well because they lose the emotion!!

As for the numbers, I can 100% without a doubt, assure you that they will come out on top. Whether its kick back from the manufacturer or a deal they have with a preferred bank for financing... they always have meat on the bone.

I wish you all the best on this, and it sucks you have remorse.
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Old 02-08-2014, 02:41 PM
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Sounds like the typical Go Auto experience to me.
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Old 02-08-2014, 03:05 PM
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I cancelled my Ford Maintenance Plan and I am very pleased with my decision. I would find a friendly diesel shop to do your engine maintenance and just pay as you go instead of giving them $3,000 upfront for who knows what? They'll say, oh you'll save money in the end, but how will you even know what their cost to "maintain" your truck really is and now you're locked in to their system while they don't even care about your truck. They want you to trade it in for a new model in a couple years. My views towards my dealership went downhill fast after my initial purchase. They treat you like royalty when you're purchasing, but then you're a hassle when you need something afterwards, not to mention the mass incompetence that overflows from every department at the dealership...
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Old 02-08-2014, 04:34 PM
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I've tried numerous times to get dealer doc fees dropped off the invoice of all vehicles I've bought and I've yet to find a dealership in Alberta (Calgary and surrounding area) that would agree to this. Seems like none of them are interested in dropping this fee.

Extended warranty was up to you. You didn't have to buy that. So is the maintenance plan. I know on my next truck, I'll be getting the maintenance plan as the upfront cost seems to justify the long term cost of maintenance. I've talked to the truck shop foreman at my dealership and he swears by the maintenance plan. After seeing the cost of the maintenance plan and what I currently pay for maintenance on my 6.4, it seems well worth it.
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Old 02-09-2014, 06:32 PM
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Quote:
Originally Posted by jasonmt View Post
Sounds like the typical Go Auto experience to me.

No, but I did look into them. Seemed even greasier salesmen there, so I stuck with the other option. Funny thing is that both dealerships have some similar characteristics, yet they both trash talk about each other a bit.

Well my 3M was at least fixed up to my satisfaction.

I think I will just leave it well enough alone, post my honest google review of the dealer (not scathing, just an honest overview of both the good and bad, including my own mistakes), and call it done.

I don't plan on having much further to do with my sales dealership unless I am forced to. The more local dealer will likely have better service.
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