What's the deal with "dealers fees"?

[Ausfahrt]

I have encountered these the last decade or so when buying cars from new car dealers. It really irks me that they get away with this. I don't pay a $.10 grocery fee when I buy a loaf of bread. On my most recent purchase it was printed right into the contract. In other words, the column with hand written figures had $599.99 printed in the space and they said it was non-negotiable!
I replied that everything is negotiable and we bickered for a while. In the end I was able to get other concessions from the dealer but that $599.99 was still in there.

Has anyone here been able to get around this bogus fee?

 

[Bill in Utah]

Everytime.

Just say no. If they say it is the way it is, WALK.

Done it a few times and surprise, when you get about 20 feet out of their office, the fee is cut in half at the minimum.

At 100 feet its gone.

Everytime! I've NEVER had them loose the sale over some added on fee.

Remember, YOU are the person in charge. They NEED your business.

Bill

 

[XS650]

Usually, if they won't remove it with no hassle, I leave.

If the dealer can sell more of that model than he can get, then you don't have very strong bargaining position.

If it's a popular car that's in high demand and none of the local dealers are budging on price, sometimes going through a place like Costco or a credit union buying service will help you.

 

[Saturn_Fan]

Originally Posted By: Bill in Utah
Everytime.

Just say no. If they say it is the way it is, WALK.

Done it a few times and surprise, when you get about 20 feet out of their office, the fee is cut in half at the minimum.

At 100 feet its gone.

Everytime! I've NEVER had them loose the sale over some added on fee.

Remember, YOU are the person in charge. They NEED your business.

Bill


Well said Bill.

When it comes to the extended warranty spiel at the end, I tell them, "If you continue to bug me about buying the extended warranty after I told you I am not interested, I will walk out of here".

It seems to work, although they get really [censored] when you don't want the warranty.

 

[ViragoBry]

I remember a very entertaining add-on sticker from years ago on a 1992 Plymouth Laser I was looking at, that said "Added Value - $999". I laughed at them when they attempted to put it on the deal sheet.

While it seems that some dealerships act as if they're the only game in town, you're always empowered to go somewhere else.

There's a Cadillac dealer here that somehow acquired a 2010 Camaro SS with 430 miles on it. Their price was $50K. I don't know what kind of drugs they're snorting up there, but its unfortunate to think that some dummy will pay that for it because the car hasn't reached full availability at the local Chevy dealers yet.

Those boots are made for walkin'. There's always an identical, or better car just around the corner.

 

[Saturn_Fan]

Originally Posted By: ViragoBry
I remember a very entertaining add-on sticker from years ago on a 1992 Plymouth Laser I was looking at, that said "Added Value - $999". I laughed at them when they attempted to put it on the deal sheet.

While it seems that some dealerships act as if they're the only game in town, you're always empowered to go somewhere else.

There's a Cadillac dealer here that somehow acquired a 2010 Camaro SS with 430 miles on it. Their price was $50K. I don't know what kind of drugs they're snorting up there, but its unfortunate to think that some dummy will pay that for it because the car hasn't reached full availability at the local Chevy dealers yet.

Those boots are made for walkin'. There's always an identical, or better car just around the corner.


From my observations as a Japanese car fan (although I like my Saturn too) the Toyota and Nissan dealers were the absolute worst at high pressure sales and service after the sale.

Nissan was absolutely the worst. After I bought the car, they treated me extremely poorly when I had problems. Everything is always your fault. Yeah, like 3 head gaskets in a Sentra GXE with 35,000 miles on it is my fault.


When I bought my Corolla in 08 brand new, the dealer was really uppity, meaning that he had the attitude that "we are Toyota and we don't deal on anything. If you don't like it, go somewhere else". Wonder if that attitude is still working for them in this economy.

 

[Trav]

For sure this is a bogus fee.Some claim its for the office to type out the paperwork,title fee,etc.This is as close to hitting you on the head and taking your wallet as it gets.

Many dealers put a pack on the back end of the car,meaning if invoice is $20K then they add the amount the pack on to the $20K
and that becomes "their" invoice price.
The salesman is excluded from any commission on that added amount.
One dealer i worked for many years ago had a $1K pack,some have more or less and some have none.
Add the service charge you paid to that and there is $1,599 over invoice right from the get go the sales person make nothing on if they had a 1k pack.

Profit is not a dirty word,the dealer needs to stay in business,but there is a world of difference between a good deal and getting robbed.

In general try to get the true invoice price of the car your looking at including the options and transportation fee.
Check for manufacturers incentives and you will have some idea about how much room there is,remember he has to make a living.

Stay away from any dealer that uses a second window sticker that has a higher price than MSRP and nothing tangible to show for it i.e. sunroof,mouldings,padded top etc(pin stripe and tire winter air package for $2,500 is not considered real add on), or has these type of fees and refuses to remove them.Be assured you are dealing with a crook right from the get go.Go elsewhere!

 

[saberz]

They shouldn't be charging you a dealer fee period. They are trying to incorporate a middle man fee to increase their profit margins even after a supposed "good sale" where you think you haggled em down.

On a new vehicle you should only be paying:
Cost of Car(MSRP or +1k over). If the MSRP and Cost is a difference of 3-5k OVER(depending on car/make), walk out. They artificially inflated the price.

Dealers tend to add 2+k on all transactions, this is from several friends who have worked at a variety of dealerships over the years. Every sale has 2k dollars to play with. Thats why 1k over MSRP with a 2k+ cost benefit added in.

If MSRP= 21k + 1k = 22k + 2k(play money for bargaining). So now the car is MSRP 21k and retailing for 24k.


A good example is a Chevy Camaro, some dealers are actually charging 5-10k OVER MSRP. Stay away from that. The Scion tC is 17.6k, some dealers are retailing it for 18.4k. Buyer Beware.


Do your homework, if you see a car and it retails for $x dollars, work out the details with ZERO down first to make it easier to spot dealer sheistiness.

example:
20,000 car
-0.00 dollars
--------
20,000 + tax/title(no inception fees/dealer fees)


Say after everything its 22,000.

22,000 / 60(months) with Zero down = $366.66 / PM x 5 years

Negotiate your price point, say you offer him 20k or want a $333/ PM x 5 Year payment. You took 2k off the car, they are still making money on the car with the overage on the MSRP + %interest. Don't fuss over the interest as you won't know what it is until the end of the bargain(always shop around for loans).

ok so now you bartered him down with ZERO down. Now say you have a trade, do it in baby steps so its easier for you to read the numbers and gives him less numbers to throw around you and less opportunities for him to run up the numbers. After you follow the steps as above with the trade, then do the same for the amount down.

Lastly, when you work on finalizing the deal. You are NOT, I repeat NOT obligated to buy into their GAP insurance, or extra [censored] like Tire Insurance/Wheel Insurance(this is good if you live in NJ/NYC with pot holes, but not for they want to charge you).

You sign what you work out, no more than whats written. The finance manager at Toyota was trying desperately for me to get GAP and Wheel insurance(i got both anyway but only after re-negotiating my deal and it came out less than what I originally negotiated, he was actually very very [censored] because I went and re-reviewed my numbers).

Take your time and make them work at your pace, not the other way around. Dealer fees are [censored] and are fluff. Itemize the numbers and take it home, don't work it out while you are there as they are taught to pressure you.

 

[tomcat27]

I buy a new car every year. I consider it dishonest and wont pay - and since I am not shopping for a Honda currently, they always remove the fee, although you have to strongarm them. In our state they passed a law that limits the fee to $150 (it goes up a little each year) I have had some dealers tell me that the law forces them to charge the "doc" fee. I gently give them a reminder that the law caps the optional fee. Then I lay it out, no fee or I walk. Dealers dont HAVE to do this to survive. I've been in sales: selling boats and campers - we never did this to our customers - we were always straight up with customers and have a VERY loyal customer base. Once I find a good dealer, I stick with them and dont shop around. period. unfortunately, I moved and have not found a dealer worthy of my repeat business. all they see now is: "today"

 

[ViragoBry]

Most, if not all dealerships will try to bend you over for a $500 "paint and fabric protection' package.

I started out detailing cars at the Pontiac/Olds/GMC dealership I worked at...it consists of a bottle of GM wax (really poor stuff, by the way) applied to the car and some GM Scotchgard-like product sprayed all over the interior. We actually had people who paid for it. I woulda liked a small commission on that 'deal'.

 

[flanso]

Dealer fees might indicate a dealership that should be avoided.

 

[saberz]

Almost every dealership will attempt the fee, its the ones that "hide" the fee between a trade, money down and finalized sale price.

Know before hand what the car you are buying is worth, upsale your car(go high with the expectation of reaching your ideal trade in price) and money down. The first 1k down usually covers Tax/Title/Registration.

Also I will add, do not buy a factory upgraded radio, if you do your research you will/can see if the car is easily upgradable in terms of a radio/GPS system. It's cheaper to buy it and have it installed by Best Buy rather than the dealer and it will NOT void warranty.

Wheels/Rims
Radios
In Dash GPS
Alarm Systems

Are much cheaper aftermarket than they are dealer installed, and typically you get a better option than the dealer installed one.

 

[IndyIan]

Its just a way of confusing the buyer abit. Its the bottom line that's important, what value they assign the car or the "prep" doesn't matter to me...

 

[Eddie]

+1 Bill. Advertising, dealer fees and a new one for me was a " marketing adjustment fee" I don't accept any of these fees.

 

[saaber1]

Buying a new car is simple:

1) Obtain the actual dealer invoice amount from an objective 3rd-party source and then subtract any factory rebates etc.

2) Show that invoice printout to the dealer and ask what is the minimum profit they will accept above that amount. Tell them you are going to multiple dealers and will go for the lowest price.

3) Any hassle, "multiple salesman attacks", or waiting games then immediately walk out as stated above.

Any fees, etc. never even come into the discussion. The only relevant thing is what is the minimum profit they are willing to accept.

Also, never discuss any trade in or financing. Only a cash deal. This is the only way to know what you are truly paying for the car. Once you have their cash price then you can discuss trades or financing. Dealers are trying to get you on the "front side" (profit on the car) and the "back side" (financing, warranties, etc) and they want you to feel like you are getting a good deal even if you are getting a horrible deal. I know, I used to own a car lot.

It is also helpful to know precisely what you are willing to pay beforehand. For example, if $300 above invoice is the "standard" profit for that particular car, If you like the dealer and they are at or below that amount, you don't have to shop around (be mindful of rebates, etc. however).

Your greatest weapon is your willingness to leave. Basically they will do anything they can to keep you form walking off the lot because they know if you leave their chances are miniscule that you will come back and buy the car.

 

[Bill in Utah]

My rule of thumb (and in over 30+ years of buying new/used for family/friends and myself) is if the vehicle stickers for $20k, pay NO MORE OUT THE DOOR than $20k incl ALL "fees".

NEVER pay more than the sticker out the door.

That is the MAX I've EVER had to pay and most of the time, I've paid WAY LESS.

My Sister just bought a 2007 loaded Caravan with 33k miles. Price asking was $14,995. Price out the door from the dealer? $12,300.

They should have updated their photos of the Van. On the web site, they bought 12 of these vans. Took photos of them with SNOW that they just cleared off the van for the photos.

Excellent bargaining tool!

Bottom line is YOU are the Customer. CASH talks and dealer [censored] makes me walk...

Bill

 

[Jim 5]

Originally Posted By: Saturn_Fan
Originally Posted By: Bill in Utah
Everytime.

Just say no. If they say it is the way it is, WALK.

Done it a few times and surprise, when you get about 20 feet out of their office, the fee is cut in half at the minimum.

At 100 feet its gone.

Everytime! I've NEVER had them loose the sale over some added on fee.

Remember, YOU are the person in charge. They NEED your business.

Bill


Well said Bill.

When it comes to the extended warranty spiel at the end, I tell them, "If you continue to bug me about buying the extended warranty after I told you I am not interested, I will walk out of here".

It seems to work, although they get really [censored] when you don't want the warranty.


I use that one at the front end - especially when buying electronics from a box store where they work on commission.. I usually say something like, "I'm buying today, but only if I don't hear a word about extended warranty. If I hear a word about it, I'm going to walk across the floor to one of your other salesmen and start again".

That pretty much does it.

As far as dealer fees, it's just a "grab" at the end after you've negotiated what you think is the price you're paying for the car. Often they'll add a fee for a "financing statement" which is bogus because I pay cash for my cars. The way I deal with this one is I make it clear with the salesman right off the bat that when we are talking prices, we are talking my final drive-away price, all taxes, fees, charges of any kind included in the price. The price we are talking is the amount of the bank draft that I hand them in exchange for the keys. They can back out their overhead charges in their own mind as they are going along. That seems to work quite well.

 

[SrDriver]

Last 4 vehicles we bought used the info from the following web site and saved a pile of money in the process!

Link to web site.

 

[Familyguy]

Originally Posted By: Bill in Utah
Everytime.

Just say no. If they say it is the way it is, WALK.

Done it a few times and surprise, when you get about 20 feet out of their office, the fee is cut in half at the minimum.

At 100 feet its gone.

Everytime! I've NEVER had them loose the sale over some added on fee.

Remember, YOU are the person in charge. They NEED your business.

Bill


Exactly. At the end of the day, it's YOUR money. The last two dealer purchases for me went like this:

me: I want to buy this car and this is what I'm willing to pay.
them: OK, let's put together some financing paperwork.
me: I don't want financing.
them: OK, then here's the contract (with the usual add-on [censored]).
me: The price I gave you is the final price (less tax + title).
them: I can't do that.
me: OK, I'll just buy it from another dealer. (walking....)
them: Let me go talk to my manager.
me: You do that.
them: (after making me wait a few minutes) Can't do it, but we'll give you free oil changes (or something else equally worthless).
me: No thanks. I'm going to another dealer. (walking....)
them: Oh, alright (after a few minutes of sniveling).

Don't take any guff from those clowns. At the end of the day, if they don't make the sale, the salesman doesn't get any commission, the dealership is one unit away from making it's numbers, etc.

Best,

 

[benjamming]

Originally Posted By: saaber1
Buying a new car is simple:

1) Obtain the actual dealer invoice amount from an objective 3rd-party source and then subtract any factory rebates etc.

2) Show that invoice printout to the dealer and ask what is the minimum profit they will accept above that amount. Tell them you are going to multiple dealers and will go for the lowest price.

3) Any hassle, "multiple salesman attacks", or waiting games then immediately walk out as stated above.


What do folks typically use as profit you deem acceptable? I tend to start at 2%. I won't pay more than 4%.