Have been reading about the high fees dealer’s sneak into your cost. Such as advertising fees, administrative fees, registration fees, and documentation fees.
Some state’s vendors charge none and other states can charge $500 to $1,000. even on a used car. What can be done about this? Can we go to our legislator’s? I do not see how it costs %500. to process a used car without a loan. Why can’t we go to the state registry ourselves like in the good old days? Thanks!!
In many states (like Kansas), admin & doc fees don’t include state registration. Admin/doc fees are purely dealer fiction, because without the proper paperwork, the sale cannot be consummated and the vehicle properly registered, anyway… No need to charge for that.
Advertsing fees can be considered to be “required” because dealers are required to pitch in and do special regional advertising. Your choice as to whether it is legitimate. My solution is to add them all up, and reduce my offering price for the car by the amount of the fees. That way my bottom line offer doesn’t change. If the dealer doesn’t like it, I walk. The other approach is to try and negotiate away them in your offer, and zero them out. Dealers don’t like to do that, so my first recommended approach appears more palatable to them. It also allows the dealer to tell someone that no one person gets out of paying the fees at that dealership.
When the sales manager called me at home at 9PM to make his final offer, the price he and I agreed to is the price I expected to pay when I stopped in to complete the purchase. I assumed I would have to pay sales tax and registration fees in addition to that price. When I sat down with them I said up front the price I had agreed to and that I was not going to pay any document handling fees or the like - fees which I then saw they had typed into the document.
The important thing is to be ready and able to walk out if the deal is not going down as you had agreed to. Since I had walked twice previously, for good reason, I was unafraid to do it again. Guess what? They did have their conversation among themselves and did retype the documents, taking out the extra charges. I drove away with the car I wanted at the price I had agreed to.
http://www.edmunds.com/help/about/press/118152/article.html
Go to the link above. It explains what fees are legal and are not in which state.
Tester
Good for you! My goal is to get in and out of a dealership with least pain and least time. That is why I suggest the second approach, a path of less resistance that ends up me writing the same check amount. Frankly, as long as I acheive my bottom line price, I literally care less what the bill of sales says or what mathematical manipulations they try to do to get there. Sometimes the salesman needs to be urged to a compatible solution and I don’t hestitate to do that. He knows my next move is to walk and not come back. I do think it is unprofessional to try and “slip” in fees previously negotiated away in previous conversations.
My Approach: Offer the dealer an “out the door, doc, prep, tax title and license price” and make sure they know the amount you’re offering is the amount you’re writing the check for. Doesn’t work so well if you’re doing dealer financing, because they’ll just increase your %rate to make their standard profit. This works very well at 8:45 p.m. on the last sales day of the month.
I always insist on negotiating on final price, not including sales tax. How they want to break that down is of no concern to me, but I always negotiate on a position of “I will walk, see me march out the door” if things are not in agreement.
I did this once. I got the sales guy down on price, was a little higher than I wanted, though so I said “throw in the accessory chrome tailpipes and the mudguards in the trunk and the sale is yours”. $150 retail in accessories. He said he had to ask his manager, and the manager came back and said no. So, we walked out. They lost an entire sale because of what was likely about $80 to them. The sales guy was absolutely crestfallen- he knew he had the sale, we’d negotiated for an hour, and he got nothing for his work, because they stood to make $80 less.
This was something I saw a lot with VW. For some reason, they would rather lose an entire sale over a small amount than make the sale. When I bought my VW, I did the research, I knew what the average price was, what the invoice and holdback was, and was offering them a price that would be profitable to them (They’re running a business, not a charity) and fair to me (using the average sale price found on Edmunds).
If you don’t want to pay BS fees, try a dealership far from a metropolitan area. Buy within a city, and they’ll try to tack on more BS fees because the cost of doing business is higher.