Understanding the fees that are added to the price of your vehicle

If you have ever bought a new vehicle, you know that the $19,999 advertised price is not really the actual price you will pay when leaving the dealership with your new car. Taxes will significantly add to that amount, but so will a range of other fees that make enough of a difference for them to need to be included in your budget.

To make things a little easier, the Ontario Motor Vehicle Industry Council, or OMVIC, introduced back in 2010 a new law that forced dealerships to include these additional fees in their advertisements. That means that it is now required for the advertised price of a given vehicle to include:

Freight and transportation

Usually the most significant fee, it is the cost of shipping the vehicle to the dealer.

PDI or pre-delivery expense

This is the cost of preparing the vehicle for sale. When vehicles arrive at the dealership, they have been in transport for a while and are usually wrapped in protective materials.

Administration fees

These are fees pertaining to preparing documents such as contracts, as well as processing fees.

Government levies (air tax, etc.)

Various taxes charged by the government, most usual of which is the air tax.

OMVIC fee

A fee of 10 $ charged by the Ontario Motor Vehicle Industry Council.

Pre-installed products

Tire warranty, fuel, nitrogen and any other product that was added to the vehicle before it was sold.

Put together, these fees can easily add a few thousand dollars. So, when calculating your budget, you need to take them into account.

Thank you to Palladino Honda for their help with this article.