ACM instructs car industry to list unavoidable costs with prices
The Netherlands Authority for Consumers and Markets (ACM) is of the opinion that the Dutch car industry should make the prices of new cars more transparent. In almost all cases, consumers end up paying more than the advertised price. This is caused by the so-called ‘closing fees’ (or ‘on-road costs’) that car dealers add to the suggested retail price. These fees can vary from EUR 600 to EUR 1,500 per car. This is one of the conclusions that ACM draws after assessing advertisements for new cars of all major car brands.
ACM initially targets car importers, since they are almost always responsible for the national advertisements, flyers, and other marketing materials. After November 1, 2016, car importers may be imposed orders subject to periodic penalty payments or heavy fines if the unavoidable costs are still not listed with the advertised price.
Unavoidable costs listed with advertised price
Closing fees include, for example, delivery fees, fees for the removal of coatings or coverings, the cost of license plates, recycling fees, and registration with the Netherlands Vehicle Authority (RDW), which is the Dutch national motor vehicle and driving license registration authority. Consumers have to pay these fees in order to be able to leave the dealership in their new car. Dutch and European law mandate that all unavoidable costs of a product be listed with the advertised price. The fact that this has not been the case so far is considered misleading.
Paying the advertised price should allow you to leave the dealership in that new car of yours. The car industry must be clear about that. Unavoidable costs need to be listed with the advertised price, plain and simple.
Comparing made easier
ACM wants the costs to be transparent for consumers. In this way, comparing services and products will be easier. This will benefit competition between businesses, which will, in turn, result in competitive prices, higher quality, and better service.
Soon, the advertised price for a car will include all unavoidable costs. Car dealers may, obviously, deviate from the total suggested retail price stated in the advertisement. Furthermore, consumers could also negotiate about the final price for which the car will be bought.
The Dutch Consumers’ Association (in Dutch: Consumentenbond) had already previously campaigned trying to have car prices include closing fees. The Dutch automobile association ANWB, too, had previously indicated that there are still many unclear prices in the car industry.