Taking a look at a dealer price invoice report can help you negotiate better car deals in Canada. Most people don’t make a habit of buying a new car too often, so most people don’t quite understand the fees they’re bound to be charged when they buy a new car. Quotes are filled with fees, and while some are mandatory, some are negotiable, and some are downright questionable.
Mandatory Fees You’re Expected to Pay
Freight, or Destination Fee: This a delivery fee, charged for transporting the vehicle from the factory to the dealership. It should be on the factory invoice, and the price is set by the manufacturer.
Pre-Delivery Inspection (PDI): This fee is for getting the vehicle road-worthy, by filling the gas, checking engine oil, coolant and the performance of windows, lights, A/C and a whole lot more. This inspection is done at the dealership. If you’re uncomfortable with the fee, you can ask to see the checklist and verify its legitimacy. It should be on the factory invoice, like the destination/freight fee.
Air Tax: Air tax is a government tax. When you buy a new vehicle with air conditioning, it will come with an air tax fee. It’s a move toward greener energy, by taxing fuel consuming A/C. This is usually around $100.
Tire Tax: Like the air tax, the tire tax is a government tax. As part of the tire recycling initiative, this tax is imposed to help fund the nationwide program recycle tires. This is usually around $20-$30.
Regulatory Charges (OMVIC or AMVIC): This is another government tax, charged to the OMVIC or AMVIC (Ontario/Alberta Motor Vehicle Industry Council) and it ensures dealerships have all-in pricing, so consumers are informed about fees. The price will vary by province; for example, $5 in Ontario and $6.25 in Alberta.
Non-Mandatory Fees
Administration Fee: This fee covers administration, like licensing, transactions, and financial documentation. Some times it also covers . This fee is usually only applicable for luxury cars and is optional for a non-luxury car. It should appear on the factory invoice (you shouldn’t pay this fee unless it appears on the factory invoice), and it’s worth negotiating.
Extended Warranty: This covers the warranty after the manufacturer’s warranty has expired, and it can be set by the manufacturer or a third-party vendor. It’s not necessary, and even if you are interested in extended warranty, it’s not necessary to purchase it right away. You can decline this service.
Block Heater Installation: This is an installation fee, charged by the dealership, for a block heater, which keeps the engine warm in colder climates. You should pay this fee if you live in a region where sub-zero temperatures are the norm.
Rust Protection/Rust Proofing: Rust protection or rustproofing is applied by the dealership, preventing the body from corroding but it’s not necessary. It is a good idea to consider some form of rust protection to protect your car from the elements. Since this is easily done aftermarket, it’s worth shopping around if you want it, and it can be negotiated.
Nitrogen-Filled Tires: Nitrogen is less affected by temperature, it improves performance, fuel efficiency, safety and keeps a consistent tire pressure at high speeds, but is only necessary for high-end sports cars. The fee is charged by the dealership.
VIN Etching: The effectiveness of etching the VIN on the car window is not guaranteed, and it’s not mandatory. The fee is charged by the dealership, but is negotiable, and not necessary.