On Road Costs in Trade Me Motors and AutoBase listings

We recently sent a note to our dealers as a 'head's up' regarding On Road Costs on Trade Me Motors. On Road Costs should be included in the asking price of your vehicles on AutoBase and Trade Me Motors classifieds. This ensures a fair playing field for dealers to advertise their vehicles, and buyers with a clear price to easily compare vehicles, i.e.'apples with apples'.  The latest Autotalk magazine published the following article re. On Road Costs.

Dealer says no to on-road cost

Wednesday, 27 July 2011|Written by Richard Edwards

"An Auckland dealer has rejected the suggestion that on road costs on newly imported cars should be included in the advertised price online. Cooper Cars director Mike Mapperson objected to a message to AutoBase members advising them they should be listing prices as inclusive of on road costs. Mapperson told AutoTalk and that the nature of vehicle pricing means adding on road costs would come from dealer's margins. "Every dealer aims for $12,995, $14,995 or whatever," Mapperson says. "Start taking that $290 out and it comes out of the margin."He notes dealers already absorbed the GST rise under the same system. He also notes the differential between fresh import and preregistered cars, "Nobody demands that someone includes as a provision what the buyer will be up for to register the car for the next six months. None of that money goes into our pockets," Mapperson says. "It is the cost of using the car for the first six months after purchase. The thing the Commerce Commission needs to be aware of is we are selling a car, " he says. "There is nothing to stop us handing the paperwork to the buyer and telling them to go down the road and register the vehicle."

AutoBase General Manager David Boshier says the position is at this stage just an 'advisory', and is aimed at making pricing fairer overall for advertisers. He says he has received little negative response, "I have had a number of dealers calling telling me it is about time. Our view, and TradeMe's view, is that on road costs should be included in the asking price on TradeMe," Boshier says. "Ideally we would like all the dealers to list this way, if for no other reason than it creates a level playing field."

Boshier notes that while there has not been a warning from the Commerce Commission on the issue, not having the overall cost listed could be an issue."The initial impression of the price should be the drive away price," says Boshier. "And if not it could be termed a breach." Boshier notes the Commerce Commission lists on its website examples of where additional costs are not included in the price or detailed."

 

In the Commerce Commission's view, consumers are entitled to consider that any price quoted for a good or service is the price that they will be asked to pay in order to purchase it. The Commerce Commission considers it best practice for the full price that a consumer has to pay to be clearly specified. It is the initial impression created by an offer that is likely to be important. Any fine print disclosure of additional costs to be paid, or disclosing the true costs of the purchase when a customer is about to make the purchase is unlikely to prevent a breach (breach: To break the law or not comply with an Act or regulations) of the Act.

E.g. A car dealer's nationwide television promotion failed to clearly disclose that the prices of vehicles advertised did not include compulsory on-road costs. In a settlement with the Commission, the company acknowledged that the advertisements were likely to breach the Act and agreed to refund on-road costs to all customers who had bought cars in the promotion.

For more information please see the links below:
Commerce Commission > Fair Trading
Trade Me Terms and Conditions