Car
Dealer Fees - Gonna
Getcha
If you've ever purchased a
vehicle from a dealer before,
chances are you've seen some form
of a fee that is usually not
disclosed during negotiations,
and pops up on the contract when
it's time to sign.
There are four car dealer fees
that you must know of before you
buy:
1)
Documentary Fee
If you ask the dealer what
this fee is you'll get different
answers from different people.
Some will tell you it pays for
doing your title work, pays for
the receptionist, pays for the
salaried employees, and a
different mix of fixed expenses
the dealer needs to pay each
month. Well, what I tell people
when they ask is that it's a non
commissionable profit that is
paid to the dealer.
Some dealers will actually use
this money to pay for those fixed
expenses, but the majority that I
know will pay all dealership
expenses from sales, service,
parts and accessory profits, and
that doc fee goes straight to
owner. So if the doc fee is $300
per vehicle and the dealer sells
300 vehicles a month the owner
makes $90,000. Pretty big
money!
The dealerships I've worked
for have charged between $50 and
$395, and I have heard rumors of
Florida dealers charging over
$1000. If you're really looking
to to get the best deal, this is
a figure you'll definitely want
to know prior to purchase.
By the way, this number is not
negotiable! A dealer can reduce
the amount from the sale price,
but will not take this fee out of
a retail deal. If they did they
would risk a class action lawsuit
from customers previously charged
this fee. That could get
expensive.
I have never seen a dealership
not have a doc fee of some sort.
This does not mean that some
dealers won't have them, but
honestly, it's so easy for a
dealer to collect them, it
wouldn't make financial sense to
not charge one.
2)
Destination Fees
You'll also hear about
destination fees and prep fees
for new vehicles, but these
should be fees that are covered
in your total vehicle invoice and
are set from the
manufacturer.
3)
Market Adjustment
Fees
Some dealers will have fees in
addition to MSRP (not set by the
manufacturer, but by the dealer)
and will call these Addendums,
Market Value Adjustments, etc.
These fees are typically fluff
and are the first things to go
when negotiating.
Don't get me wrong, if you say
nothing about these fees the
dealer will certainly collect
them from you, but it's pretty
easy to get them to drop these.
If I were you, I'd tell them to
throw these fees out the window
and would focus more on the MSRP
and working that down near
invoice.
These Market Adjustments for
high end and limited supply
vehicles are, at some
dealerships, not negotiable, so
be prepared. For instance, I know
a lot of Chevy dealers that will
post a $5000 addendum on
Corvettes and they might cut that
in half, but usually don't
budge.
4)
Dealer Prep Fees
These are not the dealer prep
fees that may be included on the
invoice, but a dealership trying
to stuff additional fees, on top
of the doc fee, into customers
contracts. I know of dealerships
that would include fees for paint
treatments and window etching and
they would call it a dealer prep
fee. You might be surprised at
how many customers would just
sign away without questioning.
You really need to review the
contract carefully and make sure
you're not having products you
don't want stuffed into your
financing.
If you've agreed to $10,000
plus fees, then your Out The Door
amount should be $10,000 plus
Tax, Title, License (if
applicable), Doc Fee, and that's
it.
Your best bet, to protect
yourself, is to request an
itemized break down of all the
fees you will be signing for
prior to going into the finance
office. By doing this, you'll
have plenty of unpressured time
to review exactly what you're
paying for and how much it is
costing you.
Justin is the creator of
http://www.InsiderCarBuyingTips.com
He is a Car Buying, Bad Credit
Repair and Auto Loan Finance
authority. In addition to
offering the most informative car
buying tips on the Internet, he
offers, direct to consumers, the
least expensive A-(excellent) AM
Best rated
[http://InsiderCarBuyingTips.com/auto_warranty]Extended
Auto Warranties online and has
partnered with the #1 auto loan
refinance source.
|