ACM checks whether advertised prices now include closing fees
From 1 November, the Netherlands Authority for Consumers and Markets (ACM) will check whether all advertised car prices are transparent, meaning that these prices include ‘closing fees’ (or ‘on-road costs’). If such unavoidable costs are not listed with the advertised prices, car importers may be imposed fines or orders subject to periodic penalty payments. Last summer, ACM urged the car industry to comply with the legal requirement to list unavoidable costs with the advertised prices. Car industry association RAI supports ACM’s call. The car industry has worked hard to adjust all the prices displayed in commercials and brochures.
Henk Don, Member of the Board of ACM, explains: “It is important that consumers know what a car costs before buying one. Clear prices are essential for consumers. Clear prices make it easier to compare products. This will also benefit competition between businesses, which, in turn, will result in competitive prices, better quality, and better service.”
What are closing fees?
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. For that reason, closing fees are unavoidable. These fees can vary from EUR 600 to EUR 1,500 per car. ACM had previously established that these costs were wrongfully excluded from the advertised prices.
Why should these costs be listed with the advertised prices?
Consumers should not be surprised by unavoidable fees before buying a product. This has been mandated by law for quite some time now. It is considered misleading if car dealers display incomplete information about prices. Price transparency is one of the main topics of the ACM Agenda for 2016. ACM enforces these price transparency regulations not only in the car industry, but also in the travel industry and in the market for concert tickets and theater tickets.
Have all adjustments been completed?
The car industry has been granted postponement on one aspect. Many car brands use so-called car configurators. This is a type of computer software that enables consumers to ‘personalize’ the car they wish to buy: they can pick the color of the car, the car upholstery, and add other options. ACM has given the car importers until 1 January 2017 for adjusting these car configurators, because doing so has proven to be technically complex. RAI indicates that almost all car importers have finished making the necessary adjustments.
What about used cars and motorcycles?
The rule that unavoidable costs must be listed with the price applies to all products and services. This means that this rule does not only apply to new cars, but also, for example, to used cars and motorcycles . In this segment of the car industry, too, ACM enforces compliance with the regulations. ACM also asks consumers to stay alert. If they are still confronted with unavoidable additional costs, they can report this to ConsuWijzer.nl, ACM’s consumer information portal.