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Car dealership ripoff: Hidden-camera investigation

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00:00   |   Sep 23, 2017

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Car dealership ripoff: Hidden-camera investigation
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  • >> David: Fasten your seatbelts.
  • Is your car dealership ripping you off?
  • >> 1,200-dollar service they were recommending.
  • None of which was needed.
  • >> David: We're undercover.
  • >> You guys are missing everything.
  • Tire rotation, brake inspection.
  • >> Again, overselling.
  • >> David: High-pressure tactics.
  • >> I felt like he was trying to scare me.
  • >> David: Plus, insider secrets.
  • >> You have to up-sell them.
  • They come in for an oil change, you're up-selling somebody.
  • >> David: I'm just trying to get to the bottom of why you're
  • recommending service that isn't required on a vehicle.
  • >> David: This is your Marketplace.
  • [ ♪♪ ]
  • >> David: At some point, we all do this.
  • >> Hi, I want to drop my car off.
  • >> David: But when you bring your car
  • to the dealership for service...
  • >> David: How do you know what they recommend...
  • >> David: ..is what's really needed?
  • [ ♪♪ ]
  • >> David: To find out we're recruiting Jessica Celsie.
  • >> You don't really know who to trust when it comes to
  • getting your car fixed.
  • >> David: With her newly purchased 2008 Honda Civic.
  • [ ♪♪ ]
  • >> David: This is our bait car.
  • First, we ask Jessica to bring it to this garage
  • for a pre-inspection by licensed mechanic Mark Whinton.
  • >> Hi nice to meet you. >> Nice to meet you.
  • Have you had any issues with it at all?
  • Is there any lights coming on?
  • >> Nope, nothing.
  • >> Any rattles?
  • >> Nope, no rattles.
  • >> None whatsoever?
  • So it's completely dependable?
  • It's starting? It's running all right?
  • >> Yes.
  • [ ♪♪ ]
  • >> David: After taking it for a test drive, he begins.
  • Once an instructor, Whinton is now a vehicle safety advocate.
  • The verdict?
  • >> Change the wiper blades, rotate the tires.
  • Ummm, that should be it.
  • [ ♪♪ ]
  • >> David: Jessica's ready to check out what this
  • Toronto Honda dealership recommends.
  • >> Well, based on my past experience with dealerships,
  • ummm, you know, i have a feeling
  • they're going to try and up-sell me.
  • >> David: And Jessica's not alone.
  • We're hearing similar concerns about up-selling at dealerships
  • from across the country.
  • [ ♪♪ ]
  • >> David: Including from Cathy Knight...
  • >> This looks like the road our house is on.
  • It would be there but--
  • >> No, that's the way to the park.
  • >> David: Cathy likes to take her grandson, Joe, around Ottawa
  • in her 2011 Ford Fusion.
  • >> There's the park. See, Joe?
  • We just passed it.
  • >> David: When her car needs to be serviced,
  • she and her husband Craig always take it back to the dealership.
  • >> David: Why is it important for you to go to the dealership
  • to do your maintenance?
  • >> They know the car best, and i just have confidence in them.
  • >> You develop a relationship, you depend on them to give you
  • advice, when they give you advice, you take it.
  • >> David: Last fall, Cathy needed her snow tires put on.
  • So Craig makes an appointment online with their dealership.
  • But get this, before even inspecting her car,
  • he gets an email back, telling him it's also due for
  • factory required maintenance.
  • >> And it was changing the spark plugs and the intake manifold
  • gasket and changing the transmission fluid,
  • the PCV valve.
  • And holy cow, $1200 bucks worth of stuff?
  • i was just going to get the snow tires put on and an oil change.
  • >> David: Time to get a second opinion.
  • >> Cars today, absolutely, unequivocally,
  • require less service.
  • >> David: So, how do i know, when i go to the dealership,
  • what maintenance i really need?
  • >> Oh, that's easy.
  • You go to your car. >> David: Yup.
  • Pull out your owner's manual.
  • >> You take out the owner's manual and right here is the
  • required maintenance schedule.
  • In it will be exactly what needs to be changed,
  • what exactly needs to be inspected.
  • These people designed and built the car.
  • They are the source of information when it comes to
  • maintaining the car.
  • >> David: What the manufacturer suggests in the owner's manual
  • for maintenance and what the dealer suggests
  • are two different things?
  • >> In most cases, yes that's true.
  • They'll tell you that you need more maintenance
  • than your car actually needs.
  • In some cases, some maintenance procedures
  • your car doesn't require at all.
  • >> David: So, what about that list of what Cathy's dealership
  • says she needs?
  • >> PCV valve, I wouldn't bother changing it.
  • It's a lifetime product now.
  • The spark plugs in this car, according to the owner's manual,
  • is good for 160,000 kilometers.
  • She is nowhere near that.
  • Change the automatic transmission fluid, no.
  • >> David: That's a big list and you just said no to a lot of it.
  • >> Yeah, absolutely.
  • >> David: So what's going on?
  • >> Well what's going on here is the service advisor is trying to
  • sell this woman a lot more work than she needs.
  • >> David: Back in Ottawa, Craig decides they'll stick to
  • what's recommended in the owner's manual.
  • But the dealership pushes back, telling him the manual
  • is describing "normal" driving conditions.
  • Here in Ottawa, we have "special" driving conditions,
  • due to the harsh weather.
  • >> The owner's manual says nothing at all about
  • special conditions about Ottawa or any other particular city
  • or geographic area or country, and doesn't say anything
  • about the cold weather.
  • it doesn't.
  • >> David: But it's too late for Cathy and Craig.
  • Did you do the spark plugs?
  • >> I did, eventually, several months later.
  • >> David: How do you feel about that now?
  • >> That i was dumb, that i got taken in.
  • >> David: 'Cause this says, right here,
  • in the thing that's in your car, 160,000 kilometers.
  • >> Yeah, that's another two or three years of driving.
  • In spite of knowing better, i still did it.
  • >> David: Because?
  • >> Because they recommend it and they sort of
  • plant that little seed of doubt, and you think,
  • well, maybe they DO know what they're talking about.
  • >> David: Dealerships in Canada can make, on average,
  • only about $1000 to $2500 on each new car sale.
  • So their service centres have become important money makers.
  • [ ♪♪ ]
  • >> David: Back on our undercover test,
  • Jessica Celsie checks in at Parkway Honda.
  • >> Okay.
  • >> Okay, thank you.
  • [ ♪♪ ]
  • >> David: A couple hours later, Jessica gets a phone call
  • from an Assistant Service Manager at Parkway Honda.
  • >> Okay.
  • >> Wow.
  • Is that something that I can think about?
  • >> Okay, thank you.
  • >> Bye.
  • >> Wow.
  • >> David: 621 bucks
  • to replace her rear brakes?
  • They also recommend a $112 for a brake fluid flush.
  • >> If she changes them now, she'd be changing them
  • a bit early.
  • She's got 40% left.
  • And that might take another six months.
  • She might get a year out of it, depending on her driving.
  • >> And I didn't notice anything driving the car.
  • >> I didn't either.
  • When I had the drums off, everything looked
  • perfectly normal for that age of break.
  • >> David: But there's something critical the dealer
  • is not mentioning.
  • The largest recall in automotive history.
  • Metal fragments from the exploding ammonium nitrate
  • capsule inside Takata airbags have killed at least 14 people.
  • Hurt more than 180, including a metal shard that went through
  • this woman's face in 2013, while she was driving her Honda Civic.
  • >> I've taken the VIN off your car and run it through
  • the Honda system.
  • Your car has a passenger side airbag that's made by Takata...
  • >>Wow. >>: ..that needs to be changed.
  • >>Wow!
  • So why wouldn't they have mentioned that to me?
  • He basically said he would be doing everything short of
  • a safety on it, which, in my mind, should include an airbag.
  • >> That is the number one safety problem
  • facing your car right now. >> Right.
  • >> It's not rear brakes.
  • it's the airbag recall.
  • >> And so, for him not to mention that,
  • is unbelievable to me.
  • [ ♪♪ ]
  • >> David: Jessica heads back to pick up her car.
  • Maybe the tell her about the recall in person.
  • The same Assistant Service Manager from the phone call
  • hands her the results of their inspection.
  • But, under any outstanding recalls, incredibly,
  • it's checked "no".
  • Jessica gives him another chance to own up.
  • >> In the first three or four times I asked him if there was
  • anything wrong with the car or if it had any other
  • safety concerns other than the brakes, he said no.
  • >> David: But then, without having to look it up...
  • >> He finally said at the end,
  • "Oh, yeah, I think there's a recall,"
  • and then he made mention that he didn't have the part
  • and he'd have to book a later date for me.
  • That just makes me sick. because I'm now driving a car
  • that's unsafe to both me and my passengers.
  • >> David: We contact this Assistant Service Manager for
  • an explanation, but get no reply.
  • Why would a dealership not tell a customer about this?
  • >> The dealership has this business relationship
  • that's special, under contract, with the manufacturing facility.
  • In that agreement, they have to do work at a much-reduced rate.
  • >> David: Do you think that ever influences dealerships
  • telling people about recalls?
  • >> Absolutely.
  • >> David: So did it influence Parkway Honda?
  • For weeks, we've been asking Parkway Honda to come on camera
  • to explain why they've been recommending Jessica get service
  • she doesn't need but not telling her about the service
  • that she DOES need.
  • Well, they've told us they're gonna do an
  • internal investigation but they will not
  • talk to us on camera.
  • That's what they've said.
  • Let's go chat with them.
  • [ ♪♪ ]
  • >> David: Service Manager Ara Pashayan
  • stops me at the door.
  • >> You're not allowed in with a cameras.
  • This is private property.
  • We'd ask that you leave.
  • >> David: Okay, but you have an answer about why she's
  • not being told about the recall?
  • >> Please, leave.
  • You were not allowed here but you guys are showing up.
  • >> David: But it's still... it's, you know,
  • that's not an answer to the question about why she is
  • not being told about a recall.
  • >> Thank you.
  • >> David: It's still not an answer.
  • >> We please ask that you leave.
  • >> David: The up-sell continues.
  • >> That's just funny.
  • That's, like, totally made-up.
  • >> David: This is your Marketplace.
  • [ ♪♪ ]
  • >> David: The real deal
  • on dealerships.
  • [ ♪♪ ]
  • >> David: We're heading undercover again,
  • testing the advice you get at dealership service centres.
  • Bait car number two, a 2013 Jeep Wrangler.
  • The owner, Eric, works for us.
  • And for months, he's been getting e-mails, telling him to
  • bring the Jeep in for service.
  • So we ask him to make an appointment here at
  • Toronto Chrysler Dodge Jeep Ram.
  • >> Hello. >> Good morning.
  • >> David: What will this service advisor recommend?
  • >> David: But check it Eric's owner's manual.
  • It says it can be up to 16,000 kilometres or 12 months before
  • the change oil message appears.
  • There is no message,
  • and it's only been eight months and just over 2,000 kilometres
  • since Eric's last oil change.
  • >> David: Her assessment isn't over yet.
  • It'll take a couple hours for their technician
  • to do an inspection.
  • In the meantime, we want to get some inside knowledge
  • so we track down a former Service Advisor,
  • willing to share trade secrets.
  • >> When you're a Service Advisor,
  • you are a salesperson.
  • This is how you make your living, right?
  • So you have to up-sell them.
  • They come in for an oil change, you're up-selling somebody.
  • >> David: Lucas Leung worked at six different dealerships.
  • >> We present it, in a way, and let them know that
  • this is what you should do.
  • If you don't do it, what's gonna happen.
  • >> David: I'm a customer coming in.
  • What you say to me, right out of the gate?
  • >> Hey, so, I see that you're here for an oil change today.
  • You're at 150,000 kilometres, actually,
  • and you're due for a timing belt as well as a coolant flush.
  • You can do it, it's up to you.
  • But if you don't do it, what happens is the belt might
  • wear out and, when it wears out, you know,
  • like, this could cause overheating of the engine
  • or cause even more problems down the road.
  • >> David: So, was there ever something in the dealership that
  • looked different from what the owner's manual said
  • in terms of a schedule?
  • >> They would have a little board that shows you
  • what needs to be done what kilometres but then, there are
  • things on the side that they do recommend...
  • that's suggested.
  • You know, recommended but not necessary.
  • For example, power steering flush, throttle body service,
  • transmission flush.
  • You accumulate an X-amount of numbers each month and you
  • get paid based on that.
  • >> David: Meanwhile, Toronto Chrysler's inspection
  • is complete.
  • >> Not acceptable?
  • >> David: We show the footage to Mark Whinton.
  • >> The truth of the matter is, you're gonna void your warranty
  • if you don't follow Chrysler's scheduled maintenance advice,
  • not hers.
  • >> This person saying, you know, you need to change your oil
  • every three months.
  • No, this goes against what Chrysler says to do
  • with its own product.
  • >> David: The Service Advisor lists their
  • other recommendations.
  • >> David: Really?
  • She doesn't know we're also getting Mark Whinton
  • to do his own inspection of the Wrangler.
  • [ ♪♪ ]
  • >> David: So, does he need brakes?
  • >> I wouldn't do that.
  • I would wait another year or two.
  • Given how much this car is being driven,
  • it makes no noise, the brakes have full power.
  • Are they worn down?
  • Yeah, they're about half worn down.
  • But the owner's gonna get another, you know,
  • year or two out of this.
  • No problem.
  • >> David: The service advisor's not finished.
  • >> I just inspected this car.
  • It does not need an alignment.
  • The air filter doesn't need to be replaced once a year,
  • according to the maintenance schedule.
  • Again, overselling.
  • There's a conflict of interest in this business,
  • and it's kind of hidden.
  • People do not know they work on commission, but they do.
  • >> I would say 90% of these dealerships
  • do work by commission.
  • >> David: How much of your salary could end up
  • being on commission?
  • >> More than 50%.
  • >> David: More than 50%? >> More than 50%.
  • >> David: Really?
  • >> At one of the dealerships I worked for, I was at
  • a 100% on commission.
  • >> David: Was that an incentive to sell something that either
  • wasn't necessary or wasn't necessary at that moment?
  • >> Yes, I would definitely say so.
  • Being on 100% commission, I was very nervous, like,
  • every day because you don't know
  • how much you're gonna be making.
  • Some customers may not necessarily need it right away
  • but they're obligated to do it because of how I advise it,
  • how I put it on the table.
  • [ ♪♪ ]
  • >> David: Back at the dealership...
  • >> David: Well, we checked the spark plugs in the
  • owner's manual and it says Eric's don't need to be changed
  • for another 107,000 kilometres or six more years!
  • >> You do not recommend flushing it.
  • And, as far as this other stuff, it might get tighter,
  • the steering?
  • That's a great one.
  • I mean, that's just funny.
  • That's, like, totally made-up.
  • >> Okay.
  • >> David: We do have questions.
  • We call and e-mail but this Service Advisor does not reply.
  • We also contact the dealership.
  • But getting answers from Toronto Chrysler Jeep Dodge Ram?
  • That's been the tricky part.
  • So we're gonna pay them a visit, ask in person.
  • General Manager Dave Dodds.
  • Hey, how are you? >> Good, how are you?
  • >> David: Good, I'm David with CBC Marketplace.
  • >> David, I'm sorry, but this is private property
  • and I'm afraid I'm gonna have to ask you to go.
  • >> David: I can go but I'm trying to get to the bottom of
  • why you're recommending service that isn't required
  • on a vehicle. >> Please, please, please.
  • >> David: Or why you're recommending service
  • more frequently than the manufacturer?
  • Do you have a sense on that?
  • Why you're recommending that service that often?
  • Do your Service Advisors work on commission?
  • [ ♪♪ ]
  • >> David: The dealership is owned by Auto Canada,
  • based here in Edmonton.
  • With 65 franchises across the country, it's one of the
  • largest auto dealer groups in Canada.
  • We do some digging and find out, so far this year, they have
  • made more on service than they have on selling
  • new and used cars combined!
  • Well, we ask for some more information, they won't come
  • on camera, but the president of Auto Canada
  • writes to us and says he
  • "applauds the manufacturer's maintenance schedule,"
  • without explaining why his dealership isn't using it.
  • >> David: Will the government crack down?
  • >> If someone is found guilty, the penalty can range from
  • a fine to jail time, potentially.
  • >> David: This is your Marketplace.
  • Get more Marketplace.
  • Sign up for our
  • weekly newsletter
  • at CBC.ca/marketplace.
  • [ ♪♪ ]
  • >> David: This is your Marketplace.
  • Caught on camera.
  • >> My understanding was I was supposed to bring it in
  • for regular maintenance.
  • >> David: Aggressive up-selling.
  • >> David: Misleading inspections.
  • >> Had I not pressed him several times, he wouldn't have even
  • mentioned the recall.
  • >> David: If this happens, is there anybody protecting you?
  • To find out, I head to Ontario's watchdog.
  • The Ministry Of Government And Consumer Services.
  • Hey, Harry, I'm David with CBC.
  • >> Nice to meet you.
  • >> David: Yeah, get to meet you.
  • Spokesperson Harry Malhi.
  • What is the law say about a repair shop telling you you
  • need to do something before you need to do it
  • or you don't even need to do it at all?
  • >> Repair shops cannot offer services that aren't needed.
  • >> David: Does that mean it's against the law?
  • >> It could be in violation of the Consumer Protection Act.
  • They can't mislead you if it's a service that's not needed.
  • They can't be like, "This is needed to fix your car."
  • >> David: What is the range of your power to penalize?
  • >> If someone is found guilty,
  • the penalty can range from a fine to jail time, potentially.
  • >> David: It can go all that way?
  • >> Yes.
  • >> David: A dealership would say,
  • "This is a work that you need to do,"
  • and then we would go to experts and they would say,
  • "No, it doesn't need to be done.
  • "Your brakes can last for months or maybe another year
  • "before they need to be changed."
  • >> So in those cases, we want those consumers
  • to reach out to us.
  • If there was a violation, we want to know
  • so we can do something about it.
  • And we can find any bad actors that may be out there.
  • So we need the help of consumers to make us aware.
  • >> David: You know, I think, when I go and buy a car,
  • I am aware that the salesperson makes a commission.
  • That's how they make their money.
  • I think a lot of people would be surprised to learn that
  • many service advisors, people you come and meet,
  • they, too, are on commission and that they are essentially
  • incentivized to sell you more.
  • >> We want to make consumers aware that
  • they have those rights.
  • They need to know that when they go to these technicians,
  • whether they get a commission or not,
  • they can't offer you services you don't need.
  • And we can look into that.
  • If they feel like some-- their rights were violated.
  • >> I have worked for brands that focuses on customer service,
  • like 100% customer service.
  • No, you don't need to really sell, sell, sell, sell, sell.
  • I mean, like, it's good.
  • >> David: So there is good guys out there?
  • >> Yes. Oh, absolutely.
  • I have worked with amazing companies out there.
  • >> David: So what can you do to prepare if
  • you're going into the dealership?
  • >> Before you go, look at the mileage on your car,
  • see how many kilometres are on it, then have a look
  • at the owners manual, go to the maintenance
  • section and see what's required at that mileage,
  • or slightly before.
  • Somewhere near that mileage or months,
  • and once you know what that is, go right to that service advisor
  • and say, "I want these things done."
  • >> David: And what if they push back?
  • >> Well, if they push back, you walk out the door.
  • [ ♪♪ ]
  • >> David: Advice Jessica Celsie could use.
  • Since our first bait car test, she's been getting notices in
  • the mail from Parkway Honda.
  • >> That I needed spark plugs, shocks,
  • struts, things like that.
  • Even though my car was just there and
  • they just inspected it.
  • >> David: But nothing about the Takata airbag.
  • >> If it wasn't for Marketplace, I would not have known
  • there was a recall on my car.
  • >> David: Today, she's bringing it to a totally different
  • Honda dealership, to finally get that airbag replaced.
  • [ ♪♪ ]
  • >> It's done.
  • Finally, what a relief!
  • I've been so stressed out about having people in my car,
  • having passengers, like, I didn't realize how much
  • it was bothering me driving in traffic until now
  • that it is finally done.
  • My car is safe.
  • Yay!
  • [ ♪♪ ]
  • >> We're inside farmers markets.
  • >> People at the markets don't know what they're
  • buying that food and they're being lied to.
  • >> Are you really buying direct from the farm?
  • We follow the trail.
  • Consumers are paying a premium for your product
  • because they think that you grew it.
  • Are you ripping people off?
  • [ ♪♪ ]

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Car dealership hidden-camera investigation reveals how service centres upsell you on unnecessary work.
To read more: http://cbc.ca/1.4300557

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