We all know how the law of supply and demand works. Dip the supply, prices will go up. The pandemic shook up everything, but the impact on the automotive industry gave everyone a fast lesson in shopping for vehicles not available in the dealer’s inventory. Global shortages emptied out showrooms and used car lots alike, as consumers scrambled and bought used cars often at prices over what those vehicles had cost when new.
The scarcity led to long wait times and a lot of bad-faith dealing (obligatory and important note: not all dealers), including stories of forced financing (finance your vehicle with us or we’ll just sell it to the next person), tied selling (take the rustproofing and the extended warranty or we’ll just sell it to the next person) and some dealers adding extra charges at delivery that were not indicated in the original sales agreement (pay it or we’ll just sell it to the next person). With inventories replenished and shortages in the rearview mirror, vehicles are still expensive but prices are settling, rebates and incentives have returned to the market so consumers should be back in the driver’s seat, right? Not so fast.
Who’s really in control of the Canadian auto market?
Car Help Canada commissioned Decision Point Research to poll 1,500 Canadians who purchased a new vehicle from a dealer between October 2021 and October 2023.
It’s hard to overstate the impact of the pandemic on vehicle prices. From the survey, “In the fourth quarter of 2019…. The average price of a new vehicle in Canada was $40,386 [and] used was $18,900. By the fourth quarter of 2023, the average price of a new vehicle had risen to $67,259…and used vehicle prices had risen to $36,863.” While the stock mostly recovered and prices tempered somewhat, interest rates began to rise and consumers entered into longer and longer loan terms — often more than 84 months — to offset the kick to their monthly payment. Today’s “longer and longer” could be 96 months. Before the pandemic, the interest rate on a new car loan was in the range of 0 to 3%. Today’s rates are around 5% to 7% on a new vehicle loan for a good credit risk. A $50,000 new vehicle financed over 84 months could cost over $71k with taxes and interest.
Shari Prymak, senior consultant with Car Help Canada, says consumers are continuing to face practices that were previously explained away as pandemic-related. “The tied selling and compulsory add-ons continue to be an issue,” he says. Consumers continue to be pushed into things like “so-called protection plans, like anti-theft, wear-and-tear, key fob protection — things with no physical device, insurance scams that can add $800 to $1,500 to a contract.” He also touched on the notorious electronic rustproofing devices (they don’t work), noting his office has seen them sold for as much as $2,000. “If you’re really smitten by them, you can get one online for $150.”
Are you being charged additional fees for your new car?
Prymak says a stubborn problem now is contract software that auto-populates some parts of the sale. “It looks very official and people may not notice them, but they should question each one.” Undefined fees and add-ons that you haven’t requested need to be removed. The law is clear: advertised prices must include everything except licences and taxes.
Oversight comes from provincial consumer protection offices like AMVIC in Alberta, OMVIC in Ontario and the Office of Consumer Protection in Quebec. Charles Tanguay, head of strategic partnerships for the OCP in Quebec confirms that “consumers in Quebec have also experienced similar problems in recent years. In fact, the automotive sector has been the leading complaint-receiver to the Office for several years, with approximately 23% of complaints in 2024.” He goes on to note that problems didn’t begin with the pandemic; it was an excuse that exacerbated some malpractices. “When analyzing nearly 800 contracts in 2018, the Office found that nearly one in two vehicle dealers appeared to have demanded a price higher than the advertised price, which is prohibited.” Quebec has emerged as the most progressive province when it comes to cracking down on illegal transactions. Between 2020 and 2024, 53 criminal prosecutions resulted in the Office issuing over $656,000 in fines. “The amount of fines provided for by the law has been raised substantially since January 2025 and the Office will also be able to take administrative action by suspending or cancelling the permits of merchants who do not correct their practices,” says Tanguay.
In Ontario, sales regulator OMVIC says in a statement they are monitoring the industry for “the practice of vehicles being advertised at a particular price — only for consumers to later find that accessing that price often requires purchasing additional products like extended warranties, rustproofing or specific financing options.” They go on to note that “It has also raised concerns among competing dealers who believe the practice undermines fair competition, disadvantages consumers, and erodes trust in the industry. Dealers and salespersons engaging in this practice risk violating the Code of Ethics under the Motor Vehicle Dealers Act (MVDA), which could lead to enforcement action. Under Ontario’s all-in price advertising rules, any mandatory fees or products must be included in the advertised price and reflected in the bill of sale. Car buyers have the right to walk away from a transaction if they feel pressured, misled or simply do not want to spend additional money on products they do not need.”
This isn’t good enough. “Monitoring” “raised concerns” and “could lead to enforcement action” are hardly going to have dealers who break the law quaking in fear and changing their M.O. You can see investigations and outcomes here; how is fining a dealer a couple of grand — an amount they can pad out on a single sale — going to deter the illegal practices and back consumers? Toothless amounts just become a cost of doing business. Telling car buyers they “have the right to walk away” is frustrating and throws the problem right back at the consumer.
George Iny with the Automobile Protection Association (APA) agrees. “The consumer survey commissioned by Car Help Canada and published as part of its report makes a very important contribution to quantifying the frequency and dollar values of abusive retailing practices by auto dealers. The report confirms that some of the bad habits did not disappear after pandemic-related vehicle shortages eased a little. It’s incumbent on the dealer regulators to do something to address the decline in auto retailing business practices, more specifically to combat fake fees, markups over the advertised price and tied selling.”
As we enter another period of uncertainty in the marketplace, your local retailer should be offering a better experience than during the pandemic. It’s more important than ever that regulators step up and fight those dealers (again: not all dealers) who are taking advantage of consumers.
Sign up for our newsletter Blind-Spot Monitor and follow our social channels on X, Tiktok and LinkedIn to stay up to date on the latest automotive news, reviews, car culture, and vehicle shopping advice.