Responses from dealerships and automakers to W5-APA investigation

W5: Car Troubles, part one W5 teams up with the Automobile Protection Association to see if car dealerships in Vancouver can back up the deals they advertise.

Below are responses W5 received from Columbia Chrysler, Kia Richmond, Vancouver Honda and Carter Honda dealerships, as well as from the head office of Honda Canada. (Some names and phone numbers have been redacted.)

Response from COLUMBIA CHRYSLER:

Hi name,

My name is Bob Hewitt and I am the Dealer Principle at Columbia Chrysler Dodge Jeep Ram in Richmond, BC.

I was forwarded a copy of your email you sent today regarding your W5/APA investigation. I am more than happy to help on this and you mentioned to reach out if I needed further clarification on this. There was not a copy of the ad or the printout from the business office you were referencing in your email. I would be more than happy to get you the info you require if you would kindly send me the relevant items you are investigating.

Thank you,

Bob Hewitt

Columbia Chrysler

Hi name,

I appreciate the info and thank you for sending the Chrysler Canada advertised screen shot. I didn’t see the business office documents you referenced in your first email regarding a printout that didn’t reflect the agreed upon price. We log every single customer and deal that visits the business office and I can’t seem to find anything in the log for a Jeep Cherokee from the 31st, 1st or 2nd, I have looked through everything. The business office is where final documents are printed and credit documents are reviewed and submitted for bank approval so as you could imagine we take that very seriously. As I mentioned, more than happy to assist in any investigation you are conducting I just can’t seem to find the information you are referencing in order to help you.

Also, you mentioned in your first email that we failed to have a unit that matched the $24,998 Cherokee you were seeking. I have attached a Bill of Lading from McGill Carriers that confirms a 2018 Cherokee Sport ending in 595024 being dropped at our location on January 19th, 2018 and it resides in our showroom, still unsold. But in the nature of full disclosure, we have 700 vehicles in stock and only room for 200 on our lot and showroom so we have a few storage compounds where we shuffle cars back and forth on an as needed basis. Not our favourite part of our location I can tell you that but it is what we are dealt. I hope I got the type of unit correct name, just going off of the Chrysler Web shots you sent.

Hopefully you can supply me with some more information regarding the quote, customer or paperwork that was provided to you so Columbia Chrysler can assist the best we can with your ongoing investigation. Happy to Help!

Bob Hewitt

Hi name,

Thank you for the deal number, I was able to pull our pitch/worksheet that was done by the sales person name and sales manager name for name, your investigator. The only possible discrepancy I can find is that you were not accounting for gov’t tax in your analysis (12% in BC on Vehicle purchases), not qualifying for the sub-vented rate, possibly and the difference between weekly and bi-weekly payments.

The Chrysler ad is as follows, $24,998 with $0 Down Payment at 4.39% for a weekly payment of $71. The pricing that was quoted at the store was also $24,998 for 96 months however our payments were bi-weekly not weekly, $174 to be exact as per the quote. If I change those in to weekly payments it would be $85/week versus the $71/week. However, the $71/week advertised, as stated, does not include fees and taxes, our $85/week does include taxes and Bank PPSA fees. If I were to go a step further and remove the tax, the new payment would be $75/weekly as a base payment. The remaining discrepancy, $71 vs. $75 is based on the interest rate and someone’s approved credit. 4.39% is OAC and given to those that qualify for that rate, not everyone qualifies for that rate, the payment name was quoted was based on a 5.99% rate because during our sales process she declined a pre-approval therefore the default quoted rate of 5.99% would have been used for the payment at that time, thus a $75 weekly vs. $71 weekly payment difference. The $4/week is based solely on the rate spread of 4.39 and 5.99. As mentioned previously, the investigator did not visit the business office. This is significant because that is where the credit application process would have began and a submission to the bank would occur. At that stage, the bank would have reported back what rate she would qualify for and on this vehicle at 96 months could be from 4.39% to 8.5% or a straight decline which is also a possibility.

It is in everyone’s best interest that accurate payments are quoted and accurate rates are used, therefore we encourage our customers to do a pre-approval something name declined as per the attached guest sheet and per name the sales person who dealt with her. Conversely, and this happens often throughout any lending business, someone is given and quoted a low rate they do not qualify for only to have someone in the finance department take it away from them because the bank won’t approve it.

All in all, I can’t seem to find anything that indicates our payment was extremely higher than others other than the reasoning above that I feel is explained and accurate.

Please, if I am missing anything in this overall analysis and investigation please let me know.

Bob

Hi name,

Thank you for the information. I won’t be back until Wednesday of next week so the earliest I could make something work would be Friday but I would have to confirm that upon my return. I just need to confirm that there aren’t other commitments set up for me during my absence.

If you need to reach me via telephone my direct number is name.

Bob

Response from KIA RICHMOND:

Dear name,

Kia Richmond is a full disclosure transparent dealership with a strong commitment to customer satisfaction.

To help clarify some of your requests:

· Which salesperson did the Mystery Shopper communicate with?

· What is the specific breakdown to total $1,685 which you reference?

· Does the APA Mystery Shopper confirm the nine items which you have outlined in relation to the $495 amount are optional? And that the unit was available for sale for $18,735 as advertised?

· Please forward me the video and audio so I can provide you with full clarification on all items.

Regards,

Cory Dieno

Director of Sales

Kia Richmond

Response from HONDA CANADA:

Good morning name,

Thank you for your message.

A Honda Canada representative is not available for interview, however I hope the following information helps with your story.

Unlike some automakers, Honda Canada does not sell vehicles directly to the public. Customers are instead served by a national network of dealers who operate independently of Honda Canada.

Honda.ca is not a regional advertising tool. Rather, it is an online resource where all Canadians can find information on our entire line-up of vehicles including features, trims, options and pricing details. Information listed on Honda.ca is not a guarantee that a promoted vehicle or trim-level is available at every Honda dealer at all times. Factors such as price and vehicle popularity can impact supply, which is why customers are encouraged to work with their local dealer to help them find the vehicle of their choice. In circumstances where the customer's chosen model, trim and colour is not in stock, dealers have the ability to either place a custom order or search a national inventory to attempt to locate a similarly priced and equipped model.

Thank you,

Laura

Laura Heasman

Supervisor, Public Relations - Auto

Honda Canada Inc.

Response from VANCOUVER HONDA:

Dear name,

I would like to take this opportunity to respond to your email from last week and our recent phone conversation as to the APA survey conducted here at our Dealership on January 30, 2018.

Firstly, we respectfully decline your request of an on camera interview name and will not grant access to our dealership by any of your members or camera crew. This is private property and ask that you respect that, this is our place of business and do not wish to have our customers disturbed by the arrival of your crew.

Vancouver Honda has a very good reputation and we continuously strive to deliver a wonderful customer experience. As to the results you stated in your email that the Vehicle Advertised was not available in stock. The Vehicle in question was found on Honda Canada’s website as you noted and is the entry level 2018 Honda Fit DX. We did not have that particular vehicle in stock at the time and had you visited our Dealership’s Website you would have noted that we are currently out of stock in the particular model. We did inform the “mystery shopper” that we could order in that unit.

Although Honda Canada has one of the most streamlined vehicle ordering system, when compared to other brands, there are 86 different models available with a total of 340 variations for model year 2018. Some are obviously much better sellers.

Monthly we will request from Honda in order of priority, the vehicles that we have pre-sold and could not supply from stock, next using historical data, we try to order vehicles that are most likely to be able to meet customer request.

The base Fit DX is indeed a rarely requested models as it is a manual transmission without air conditioning. As a result this unit is seldomly ordered in our store but it is available to order. Certainly a sign of the time, customer are so well educated as to the content of the vehicles from the manufacturer’s website that they will themselves select a higher option level to meet their personal requirements. As a results we might only see a handful of requests a year for the base model. Having said that it I also personally believe that it is a model that should continue to exist in Honda’s lineup. In accordance to BC advertising guidelines will never ourselves advertise it unless we have one in stock.

However, Honda Canada’s Advertising clearly states that factory order or dealer locate may be required for some models. It would be almost impossible to carry all models and colors as well as trim levels in stock and any given time.

Referring to this as “Bait and Switch”, is in my opinion, insulting to dealers as the generally understood meaning of the term insinuates that the vendor dramatically increases his profit by selling a vehicle other than the selected one when this is such a fallacy! All manufacturers have MSRPs that offer a fixed small percentage as margin, selling a car that might be $2000 more than the base model might only offer an added opportunity of $100 in increased margin. We would much prefer having the car that perfectly match the consumer’s request. But certainly could not responsibly order too many vehicles that might not meet our customer’s needs.

To address your second point as to our sales consultant name offering your shopper name options of in stock units currently available for immediate delivery, this was simply in trying to satisfy name request that her car broke down and she needed a car today or tomorrow. The Fit’s we had in stock at that time were of a higher trim and option level and listed at a higher retail price. You must agree that from a consultant’s point that this the very least she should do, advising customers as to what is available to perhaps meet her time constraint.

Lastly your other noted area regarding safety features and the newly released Honda Sensing option. This feature is new for 2018 and not currently available on the DX model/manual transmissions and was not available in 2017 model year Fit either. In discussing this matter with my staff a past model currently in stock was offered to name but as noted it would not have the Honda Sensing feature. If there we inaccuracies as to this newly introduced feature on the Fit in the conversation, we do regret that and will take this as a training and learning experience for our sales staff.

Respectfully,

Jeff Corrigan

General Manager

Vancouver Honda

Response from CARTER HONDA:

Hi name, thanks for reaching out to us.

name can I get the name of the sales person that the APA person was dealing with and also the name that they were using when they were in the store please. I would like to talk to our sales person and see what notes they have or what they recall of their conversation. It is true that the Fit DX manual transmission is not a model that we get a lot of requests for but when I did a dealer search this morning there was one showing in the local market. I do not know if this was the case on Jan 30th and that is why I would like to know who our sales rep was so that I can look in to further.

I do understand that everything we show on our website is somewhat classified as advertising although when you search by model you will 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 line up 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.

Thanks,

Geoff Jessup

General Manager / Partner

Carter Honda / Carter Motorsports

Hi name,

I had a discussion with name today regarding this issue and to the best of his recollection he thought that after explaining that there were not any available locally at the time he did offer to order one and did say it could be 3 to 6 months based on future production from Honda. The reference to the LX model was apparently in response to the APA shopper saying that they would like air conditioning and as this feature is not offered on the DX model name let them know that they would have to go up to a LX model to get A/C amongst other added features. name assured me that he was just trying to provide the information that the APA shopper was requesting and was not trying to sell them anything they were not interested in buying.

Thanks,

Geoff Jessup

General Manager / Partner

Carter Honda / Carter Motorsports