Franchise dealers in the Chinese city of Shanghai are being accused of charging additional illegal fees by the city’s consumer rights watchdog.
According to the Shanghai Daily, the Shanghai Consumer Rights Protection Commission randomly investigated 70 dealers, known in China as 4S outlets, run by 25 car companies, and found only 14.28% were transparent in their pricing.
Fifty-nine shops charged various fees on top of insurance and sales tax. These included ‘management fees’, ‘comprehensive service fees’, ‘testing service fees’, ‘sundry fees’, pre-delivery inspection (PDI) fees and filing fees.
Charging a ‘PDI’ fee has been banned in China because providing a pre-delivery inspection is a responsibility of carmakers and dealerships, and cannot be passed onto consumers.
A Kia dealer told the commission the price of cars is lowered to attract buyers in the fiercely competitive market and extra fees are introduced later to compensate the dealership.
The commission found that some salespeople tell buyers that if they don’t pay for decorative extras and optional features they will not be entitled to advertised discount prices.
The commission received 675 complaints concerning automobile sales contract disputes between January and May, an increase of 39% over the same period last year.
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