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Archive for December, 2009

HST a good thing for auto industry, says dealers association

Monday, December 21st, 2009

By Grace Macaluso, Windsor StarDecember 19, 2009

Business savings from the harmonized sales tax will lead to job creation and lower vehicle prices, the Canadian Automobile Dealers Association said Friday.

“We’re absolutely in favour of it,” said Michael Hatch, the association’s chief economist.

Opponents “characterize it as a huge tax increase, but nothing could be further from the truth,” said Hatch.

Blending the Ontario sales tax with the federal Goods and Services Tax will end the “antiquated system of two sales taxes” and reduce the administrative burden for businesses, he said.

“When businesses save money within the context of a competitive economy, certainly our sector is one of the most competitive around in terms of price, that means consumers also save money,” Hatch explained. “On an average car, the savings would probably be in the hundreds of dollars.”

Because capital-intensive manufacturers spend “a lot of GST and PST on their input,” he said, the HST, which goes into effect in July, “will lessen the manufacturers’ administrative tax burden, which will lead to lower prices for consumers.”

Hatch also pointed to a study by taxation expert Jack Mintz, who concluded the HST would create as many as 600,000 jobs in Ontario alone over the next decade.

“That’s a huge number that represents more than 10 per cent of Ontario’s labour force,” he said. “When businesses save money, they invest money and that means hiring more people.”

Another recent study, published by the Canadian Centre for Policy Alternatives, concluded that the HST and associated tax measures would result in most people being better off, he said.

“In these difficult economic times, we must do all we can to enhance the productivity and competitiveness of Canadian businesses, the engine of economic growth. Harmonizing provincial and federal sales taxes is a significant step in the right direction,” said Hatch.

Windsor Star

© Copyright (c) The Windsor Star

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The 10 top developments in a year of startling changes

Monday, December 21st, 2009

Despite all the doom and gloom, 2009 still had its share of positive news for the industry.

Ron Loveys
tada president

Dec 18, 2009

Last December, the mood of the car-buying public and new-car dealerships was grim. The Canadian economy was in a tailspin and nobody knew when we’d hit bottom.

A year later, the auto industry is still recovering from a 20 per cent decline in new-vehicle sales, year over year.

To say that it’s been a year of change and evolution for the auto industry would be a serious understatement.

Here is a list of the 10 most important developments in the retail automobile industry, from a dealer’s perspective.

1. Consumers who wanted to buy vehicles this year likely discovered that it was more difficult to get auto loans approved. In years past, consumer credit was relatively easy to obtain, but in 2009, banks and lending institutions were far more scrupulous about extending credit.

This lack of available credit became a critical issue among car dealerships across Canada, as well. I was part of a delegation that travelled to Ottawa to try to persuade the federal government to free up some much-needed working capital for dealers.

2. Many new car dealers found it challenging to buy vehicles from the manufacturers, because they didn’t have access to capital. When dealers can’t borrow money to purchase vehicles, they don’t have product to sell and their businesses ultimately suffer.

3. In January, the federal government announced the Retire Your Ride program, aimed at getting older, high-emission vehicles off the road. Motorists are offered $300 (or a bike, or discounts on transit passes) for their old clunkers.

Consumer advocates, industry analysts and new car dealers quickly dismissed the Retire Your Ride program as meaningless. Some manufacturers sweetened this government incentive with their own Cash for Clunkers programs.

4. In February, the Canadian International Auto Show drew more than 250,000 spectators in the midst of a sluggish market. This was a great vote of confidence for dealers and manufacturers, as car lovers demonstrated their passion for automobiles.

5. In May, General Motors of Canada decided to close 240 dealerships across Canada, in a restructuring effort aimed at making the automaker more competitive. This adjustment was extremely stressful for GM dealers and staff affected by these changes (total employment at dealerships fell by three per cent this year, according to DesRosiers Automotive Consultants).

6. Alternative fuel technologies continued to make headlines. Although these technologies are still years away from mass acceptance (only two per cent of all new vehicles sold in Canada are hybrid), automakers continued to devote significant resources to research and development of greener vehicles.

7. In July, Ontario Premier Dalton McGuinty announced a government rebate program for buyers of plug-in and electric vehicles. The rebate will be worth between $4,000 and $10,000 for motorists, and it kicks in next July. Most industry watchers have labelled the program a dud.

8. Throughout the year, registered new-car dealers have been preparing for the implementation of the new Motor Vehicle Dealer Act 2002 regulations, which come into law on Jan. 1.

These changes are meant to ensure that dealerships operate with greater compliance and accountability, and that consumers who buy vehicles from registered dealers are better protected.

9. In September, auto manufacturers agreed to provide independent auto repair businesses with access to vehicle diagnostic and repair technology, training and documentation. This agreement, known as the Right to Repair issue, effectively forestalls Bill C-273.

10. Last week, Toyota Canada announced plans to add a second shift – and 800 jobs – to its assembly plant in Woodstock. This is a great news story to end the year, and I think it bodes well for an overall improvement of the auto industry in 2010.

Happy holidays and best wishes to all in 2010!

This column represents the views of TADA. Email president@tada.ca or visit tada.ca.

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Vehicle history reports prove to be good resource

Monday, December 14th, 2009

ERIC LAI

SPECIAL TO THE STAR

Q: Are vehicle history reports really as good as they’re touted as being? I’ve heard media reports that these often have gaps in the information they provide.

A: Private companies providing vehicle history reports say that they receive reporting information from a multitude of sources, including government motor vehicle departments, police, the insurance industry, and financial institutions (regarding liens).

Depending on the reporting agency, there may be a considerable time lag between when the initial vehicle report is made and when the agency makes the information available to vehicle history report companies. That is, many agencies make periodic “batch dumps” of information, which may occur semi-annually, annually, or less often, so any incident may not appear on a current history even though it has been officially reported.

If an incident isn’t reported at all, such as a collision that both drivers agree not to report, then this obviously won’t appear either.

That said, I’ve personally found vehicle history reports to be an invaluable resource when used vehicle shopping. This past year, Carfax searches I’ve made have revealed odometer discrepancies, undisclosed past owners, and curbsiders posing as private sellers (i.e. vehicle purchased just days/weeks ago rather than being “owned for a long time and gently driven” as the seller claimed). Also, a vehicle that changes hands repeatedly every few months leads me to suspect it’s a “lemon.”

Before buying a used auto, get the vehicle identification number (VIN) and run a free emissions test history at www.driveclean.com. This precaution has saved me many times. In the last incident, the searched auto failed three out of five e-tests over the past three years.

Always have the auto inspected by your mechanic before finalizing the deal. Trying to save a few dollars by skipping this step is a gamble that could cost you dearly.

Q: Is the Used Vehicle Information Package (UVIP) offered by the provincial transportation ministry required on all used vehicle sales?
If the seller doesn’t provide it, would the buyer have to pay for one before they can register the auto?

A: Bob Nichols, senior media liaison for the Ontario Ministry of Transportation, replies:
Private sellers of cars, light trucks and vans with an empty weight of 2,000 kg or less, as well as motorcycles and motorized mobile homes are legally required under S. 11(5) HTA to buy a Used Vehicle Information Package before offering it for sale.

A UVIP is mandatory in order to process a transfer of ownership on a used vehicle. If the seller doesn’t provide it, as they’re supposed to, then the licence office would require that the buyer purchase one before they can register the auto. The current fee for a UVIP is $20.

Eric Lai adds:
A UVIP provides potential buyers of a used auto with background information on the current and previous owners, last reported mileage, and if any liens are registered against the vehicle.

Basically, the UVIP is intended to protect the buyer from possible misrepresentation of the vehicle by the seller. If a seller doesn’t provide a UVIP, the buyer is proceeding at their own risk.

At the very least, the buyer should request a rebate of the UVIP fee off the purchase price as the law requires the seller to
provide it.

Originaly found in the TORONTO STAR

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Beware of gouging at the end of lease

Monday, December 7th, 2009

Even if you do everything right when returning a leased vehicle, you may not be protected.
Here’s why: The “grounding dealer” (where you turn in your leased vehicle) can assess the returned vehicle as being pristine in all respects, but your legal contract is actually with the finance company, and it will always have the last word.
In 2008, I returned an end-of-lease Dodge Magnum to the dealer from whom I was leasing a new Dodge Journey.
My wife and I spent a full day cleaning the returning vehicle the day before the return: washing, waxing, steam-cleaning the interior carpets and polishing/detailing everything inside and out including air vent vanes, etc. It was beautiful.
As a small joke, when we arrived and parked the vehicle at the dealership, I even stuck the detailed vehicle information sheet (the one all new vehicles have on the window listing all options, the price and so on) on the inside of the driver’s window (yes, I had kept it from when the car was new).
In addition to their technician’s inspection in the shop, the dealership’s sales manager inspected the vehicle and both he and the general manager signed the “vehicle return receipt,” which includes a “VRR condition report” page to note any damage, excess wear or missing items.

 Everything was perfect and they joked about how it looked exactly like all the new cars on their lot.
Imagine my surprise when, two weeks later, I received an “invoice and lease settlement” in the mail from Chrysler Financial claiming I owed them $637.33 for “excess wear and tear,” with no details as to the reason.
I called the dealership and they said I had to deal directly with Chrysler Financial.
When I called Chrysler Financial, they said that the floor mats were missing (not true, but they charged me $70) and that both key fobs were inoperable and had to be replaced at a cost of $440 (I think the battery may have been low in one of them, but at least one of them worked when I returned the car because they used it to unlock and lock the car).
They also charged me $54 to remove the aftermarket trailer hitch. (I had bought the “trailer towing option” but couldn’t buy the trailer hitch itself because they weren’t going to be available from Dodge for another six months, so I had a reputable aftermarket hitch installed.)
After lengthy negotiations, they agreed to a reduced settlement of $350, which I paid. I asked them to return my $300 trailer hitch but they said it had already been disposed of.
Now here’s the ugly part: on the vehicle return receipt, filled out and signed by the grounding dealer, the sales manager entered “yes” to the question, “Will customer be purchasing a new vehicle?” and he entered the VIN of the new vehicle being purchased in the space provided on the form.
Below this question is prominently printed: “If lessee is purchasing a new vehicle, the grounding dealer is responsible for payment of all outstanding obligations on the account terminated by the return of this vehicle.”
In other words, Chrysler Financial should have been chasing the dealership, not me, to pay these fees.
Neither the dealer nor Chrysler Financial agreed with me, and after Chrysler Financial threatened to send the invoice to a collection agency I eventually paid them.
My legal lease contract is with Chrysler Financial and I was not about to enter an expensive legal battle with a billion-dollar corporation over $350, and also harm my credit rating as a result.
So, by all means, do as Lorraine Sommerfeld says and get the grounding dealer to appraise and inspect the returning vehicle a month before the lease is up and fix anything they note. But understand that you may still get a nasty surprise after the dealer ships the vehicle back to the manufacturer, whose inspectors have the final word.

Tony van Kessel, Queensville, TORONTO STAR, Wheels Section, Dec. 5, 2009

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