Class action lawsuit filed against auto manufacturers for misrepresenting taxes on new cars

    TORONTO, Sept. 3 /CNW/ - A class action lawsuit has been filed against
auto manufacturers Ford Motor Company of Canada, Limited, Chrysler Canada
Inc., Honda Canada Inc., Toyota Canada Inc. and Nissan Canada Inc. The lawsuit
alleges that the auto manufacturers have misrepresented extra charges tacked
on to the sale price of new vehicles.
    When a person buys or leases a new vehicle, the dealer adds on several
charges to the purchase or lease price. These additional charges include
delivery, inspection and administration fees. The lawsuit alleges that these
charges exist only to boost and disguise the true sale price of a vehicle.
    The lawsuit objects to one of these fees in particular - the $100 federal
excise tax on air conditioners. Manufacturers and dealers collect a $100
excise tax on every new vehicle sold and leased in Canada with air
conditioning. However, there is no such tax applicable on the sale of new
vehicles by dealers to consumers. The manufacturers have to pay a $100 excise
tax when they produce or import a vehicle, but this tax is not payable by
    The lawsuit alleges that the $100 charge collected from consumers is
really just part of the sale price and is not actually an obligatory tax
payment. The lawsuit claims manufacturers and dealers have misrepresented
these charges and deceived vehicle buyers into believing that this is actually
a tax that they are obliged to pay on their purchase.
    The lawsuit was filed by several people who purchased or leased a new
vehicle directly from a manufacturer authorized dealer. The vehicle buyers are
represented by lawyers Brian Osler, Glyn Hotz and Darrel Hotz.
    "They put down that it's a tax right on the face of the sales contract,"
says Mr. Hotz. "They also call it an applicable tax. However, it's not
something the consumer even has to pay."
    The lawsuit alleges that the defendants have similar advertising,
websites and sales practices that deceive people into believing they have to
pay a $100 tax. The plaintiffs are seeking restitution of the charges they
paid that were represented as an excise tax.
    "The manufacturers and dealers tell you that there is an excise tax,"
says Mr. Osler. "The reality is there is no $100 excise tax on a retail sale
and they know it. They don't hand the money over to the government. It just
ends up in their own pocket."

For further information:

For further information: Brian Osler, Barrister, Solicitor & Notary
Public, tel: (905) 882-7045, email:; or Glyn Hotz, Barrister
& Solicitor, tel: (416) 754-9962, email:

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