• AutoShop TV

AutoShop TV Reveals How Car-Buying Issues Have Changed

A compact man armed with a sharp mind and a commerce degree, Bouchama works as a consultant at Car Help Canada, a non-profit advocacy group and car-buying service that provides discounts for members who want to skip the soul-draining process and simply sign on the dotted line.

Mark Toljagic By: Mark Toljagic July 12, 2018
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If CP24’s AutoShop call-in show is any kind of barometer, then host Mohamed Bouchama has witnessed a big shift in how consumers view the auto industry and the products they buy.

“Fifteen years ago most of the viewers were calling about vehicle reliability, rusty cars and used-car problems,” he says.

“Today the calls are mainly about leasing versus financing, negative equity, misrepresentations of vehicles by dealers and private individuals – especially on the Internet – as well as people wanting to know more about the latest technology.”

A compact man armed with a sharp mind and a commerce degree, Bouchama works as a consultant at Car Help Canada, a non-profit advocacy group and car-buying service that provides discounts for members who want to skip the soul-draining process and simply sign on the dotted line.

He started the Automobile Consumer Coalition (now CarHelpCanada.com) in 1999 after leaving the Automobile Protection Association – another advocacy group – after 11 years. As a previous host of the APA’s Lemon-Aid Show on Rogers Cable, Bouchama knew he needed television exposure to reach a sizable audience.

Bouchama approached former TV news reporter Peter Silverman, who helped him prepare a pitch to 24-hour news channel CP24 in early 2000. After two months of deliberation, CP24 gave the green light to AutoShop, a one-hour call-in show that airs on Sunday evenings (seen in southern Ontario on cable and nationally on Bell satellite).

“We got an unbelievable reaction from the public,” Bouchama recalls of the show’s debut. “Some callers told me it took weeks to get on the air to talk about their issues.”

AutoShop TV

Groundswell of dissatisfaction

AutoShop managed to tap into a groundswell of consumer dissatisfaction with their automobiles, and the practices of the dealers who sell them, by giving car owners a forum to air their grievances.

“People didn’t know where to go with their problems and disputes. I always have a certified technician in the studio to answer people’s mechanical questions and give practical advice,” says Bouchama.

“I also brought in experts and industry representatives to talk about automotive trends and broader issues, such as insurance.”

“Today the questions are more about which car should I buy and should I finance or lease? I would say 70 per cent of the questions are of this nature, while the mechanical advice is maybe 25 per cent of the calls these days.”

It’s an indication of just how much automobile quality has improved over the past two decades, Bouchama says.

“No question, the manufacturers are making better products, backed by better warranties. There are more incentives to buy new, with cheaper credit, and dealers are working with thinner profit margins. Believe it or not, new vehicles are cheaper to buy today.”

Shoppers appear to have gotten the memo. Last year Canadians purchased more than 2 million new cars and trucks for the first time, and 2018 is shaping up to be a bumper year, too, though the Trump trade war may prevent the industry from posting a second consecutive sales record.

All that buying activity has kept dealerships busy. Yet Bouchama is the first to admit dealers are being squeezed by the manufacturers and competition to sell new vehicles with as little as a $200 or $300 mark-up – a pittance that has compelled dealers to find other “profit centres” within their organizations.

“I do feel sorry for auto dealers these days. But I’m not happy about the things they do to take money from buyers,” Bouchama says.

He points to the dealership “business office” – that little room buyers are led into after they think they’ve concluded their purchase, only to learn there’s a second process involved to close the deal. The modern-day torture chamber is where sales contracts are padded with extra-cost items designed to enrich the dealer.

“Dealers are charging up to $1,900 for rustproofing – something that costs them $100. They are abusing their customers,” he maintains.

That’s the kind of talk that wins Bouchama friends among consumers, and enemies among the dealer set. When he explained to a caller that he had complete invoicing data on what every model costs dealers, the next caller, who he assumed was a sales rep, told him: “‘We don’t need communists like you!’”

If his tireless consumer advocacy makes him a communist and a disruptor, Bouchama seems comfortable wearing the mantle.

“Consumers don’t go to the dealership to buy extended warranties; they are there to purchase a vehicle,” he says.

Myth of the cooling-off period

Bouchama often reminds his viewers it’s a myth that car buyers have 24 hours to cancel their purchase contract. A recent survey of 800 Ontarians revealed only 13 per cent of respondents correctly knew that they’re on the hook the moment they sign the sales agreement. Some 43 per cent believed there’s a cooling-off period, and the rest weren’t sure.

“Consumer protection laws in Canada are very weak, to the point of being dreadful. Governments just don’t pay much attention to consumer issues,” says Bouchama.

If you need to get out of the deal, he advises buyers to be up front with their reasons, especially if they’ve left a big deposit.

“Sometimes a husband returns with his spouse, who explains the new car was an impulsive purchase that she was not consulted on,” he explains. Some dealers may show goodwill and cancel the sale, while others won’t because the law doesn’t require them to do so.

Bouchama is surprised by how little car shoppers know about the costs they’re incurring when they buy a new or used vehicle. His committee made a formal submission to the Ontario government to implore educators to teach financial literacy in the classroom.

To Lease or to Buy your Vehicle; That is the Question

“What is negative equity? Most consumers don’t have a clue,” Bouchama notes. “It’s very sad.”

One caller told him that he wanted to trade in a Nissan Rogue, a vehicle for which he owed $20,000. That negative equity (when the value of the vehicle falls below the amount owed on the car loan), added to the loan for the next vehicle meant the buyer had to carry almost $60,000 in debt just for the privilege of driving a new model.

“Some consumers are set up for failure. Dealers prey on the most vulnerable people with subprime lending that charges 15 or 20 per cent of interest, then they install a GPS monitor to track the vehicle and shut off the engine when the buyer misses his monthly payment.”

Bouchama advises shoppers on a budget to consider a three-year-old lease return vehicle that has the benefit of a certified inspection, added warranty and a low interest rate offered by the manufacturer. These reselling programs largely emulate the new-car buying experience, but at roughly half the cost.

“More new-car dealers are keeping big used-vehicle inventories for this reason,” he points out. The used-vehicle market, which is also enjoying record sales, has become a major source of profits for dealers thanks to the popularity of leasing – but to the detriment of independent lots that can’t get access to good-quality lease returns.

The payoff

AutoShop TV

People watching AutoShop often wonder what is Bouchama’s motivation for sacrificing his Sunday evenings to shine a light on the industry. Viewers assume he’s paid handsomely to be on television. In fact, nothing could be further from the truth.

“The station pays me nothing. I was making $15-20,000 a year when I started at ACC. Fortunately I had my wife, an accountant, who supported me.”

Bouchama readily admits he could pack it in and join a dealership as a manager raking in $150,000 or more annually. But it’s a career move that holds little appeal for him.

“It’s not for me. I cannot lie to people,” he says bluntly.

Yet his advocacy work has exacted a toll, too. Bouchama has survived a heart attack, and he regularly wrestles with bouts of depression. There are days when he feels like throwing in the towel, but he recognizes his advocacy work fulfills a societal need.

“If the media don’t pay attention, then issues don’t get fixed,” he says, pointing to Ontario’s auto insurance reforms that failed to deliver the promised 15 per cent rate reduction.

What keeps him going are the small triumphs he garners for his callers. Like the 82-year-old man from Newfoundland who had purchased a new GMC pickup truck that was riddled with mechanical problems the dealer did little to resolve.

“He was almost crying on the phone,” Bouchama recalls. “It took some time, but I called General Motors and sorted the matter out with them. They gave the gentleman a new truck.”

It’s a happy outcome that’s exceedingly rare because, as Bouchama claims, “manufacturers don’t want to set a precedent.”

For Bouchama and his legion of fans, the show must go on.

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