True cost of vehicle from a dealer (F150, alarm, camper)
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So I think I am close to purchasing a car from a dealer and was curious about what fees or add ons are just a way for a dealer to make more money? So for those of you that work in the business some insight would be appreciated.
So here is an example of some of the "used" cars I am interested in.
Sticker price on the vehicle lets say $35,000.
Trade in would be $5000.
What fees or taxes may the dealer try to add and claim that they are part of the deal?
Other than Tax and registration on the vehicle, what other fees should I look out for before signing the contract?
Would the $5000 trade in amount come off the $35000 number before taxes and fees OR does the $5000 come off the end number (taxes and fees)?
They will try to charge you everything they think they can get away with.
Except for fees required by law like taxes or fees to register the vehicle, everything else is a BS fee and you shouldn't pay it. many car dealers have jumped onto the fee wagon to make sales prices seem low, but create built in profits via fees and charges. Now, some of these fees may actually be state imposed but routed through the dealers. In that case, it's legit but only to the level the government agency mandates it.
You will have to do a bit of research, or just try the generic negotiating these fees lower. For me, if they can't show me some regulatory basis for the fee, remove it or I walk.
I depends on your state whether the trade-in allowance comes off the new car price or off the total. In my state of Wyoming, dealers (DEALERS ONLY, NOT INDIVIDUAL SELLERS) deduct the trade-in allowance off the car price, so sales taxes would only be paid on $30,000 in your case. You could probably give your local county treasurer's office a call or stop in and ask your question. Any dealership there would also know.
The only extra "fees" that I can think of would be an office fee that many now charge for handling the paperwork. That's BS in my book -- like a restaurant adding a cooking fee when you get your ticket. I don't argue about it, as I just concentrate on the total. If they add it after we've reached a price, I might. Before my wife and I were married (but living together), she made a $10K offer on a camper. They turned the offer down so we walked. And then were called daily with offers until they finally called and said they'd accept her $10K offer if she still wanted it. She said fine, but when we went to pick it up they added a $50 fee for the paperwork. She said no. They cried, said she'd be shorting the gal who did the paperwork, etc., and she (wife) told them they should be ashamed of themselves if they're not paying her as an employee. (Of course they were!) They finally knocked off the $50 and she got her camper for her $10K offer, which was probably worth $8-$9K.
I did have one dealer who tried to sneak in a sealant charge for spraying oil under the car. I'd called the dealership the afternoon before and made the deal over the phone for a certain (generous) price. In fact, it was a sticker-price offer on a new model that had just come in that day. The dealership was 100+ miles from me, so I specifically stated that I'd pay the sticker price but not a penny more for any extras. So we got there about 9 a.m. and they'd just gotten it out of the shop after spraying ~$300 of of gunk under it. I told them that as far as I was concerned, they'd just applied nasty gunk to the bottom of my car, and that I didn't want it there. They agreed not to charge me for it.
And now that I think about it, I've seen some kind of "dealership prep fee" on window stickers. Dealerships claim it's to clean the car up after its arrival, and I've seen it from a a couple hundred to $1,000 or more. IMHO, there should be no prep fee. That's part of the dealer's cost of doing business, just like typing up the paperwork is. In reality, it's simply another way to jack up the price of their car so they can offer a big discount.
I'm sure there are more, but living in a small town we don't (or didn't used to) see that kind of crap. Now that our dealers are all part of big chains of dealerships, they operate much like the big city dealerships -- kind of like scum grows on a stagnant pond. I bought a new diesel pickup from a salesman friend of mine in 2000. His dealership had just been purchased by a chain, and he was literally in tears before we got the deal made. We're sitting at his desk and he's whispering to me that he "can't stand the new owners". He quit not long after that. I discovered what he was talking about a few years later when that same dealership tried to sell me new brakes. I took it to another dealer for a second opinion and was told they had more than half their life remaining.
dude, don't make mistake by buying a car from car dealer. Majority of the car dealer wanted to make huge profit by trading car. They will charge you high and give less money to the owner. Moreover they won't hesitate to change car parts like tyre, engine, piston and more. I would say, better buy directly from owner.
Other that Tax, Title and license, most dealers charge a "doc" fee around $250.
Dealers make extra profit by selling warranties, add-ons and financing. You might save money by obtaining your own financing, or not.
Be very skeptical of add-on "packages'.
In some states the trade-in value comes off the price, so no sales tax on that amount.
Research the price on KBB or Autotrader.
Negotiate the best price possible on the vehicle by doing a thorough inspection that includes a test drive, tires, brakes, exhaust and check under hood and underneath for leaks. Test every switch and feature! Get a Carfax report if possible. If possible, run the VIN through an online window sticker tool. Ford and others have them, some manufacturers do not. That will give you original options and MSRP.
Personally I prefer to negotiate the best price first, then get a trade-in offer. That helps me better track the deal. You might decide to sell your trade-in yourself. But don't forget, the tax savings from trading-in and the cost of advertising.
And the aggravation of dealing with tire kickers and low-ballers.
If I am buying a car in the $35,000 price range, you bet I am wanting a vehicle with substantial factory warranty still in effect.
You refer to the "sticker price", which is generally a term used in connection with a new car. If you pay the sticker price on a new car or the initial asking price on a used car you are likely paying too much.
Nevertheless, once you decide you want a particular car you do what you can to negotiate the best price. You see it referred to here as the OTD price, because it's all the money you have to pay to get the car out the door.
Then, once you have negotiated a price you are willing to pay for the car you can start talking about what they are willing to pay you for your trade-in. Again, that is negotiable and if they are not willing to pay you what it's worth you don't have to make the deal. (Keep in mind that many people have an unrealistic idea of what their trade-in is worth.)
Then, when the deal is all done and they bring out the contract for you to sign, examine it closely for any added charges. Prep fee, documentation fee, transportation fee, ADM (additional dealer markup), they go by many names. Since you have already negotiated your total price, your answer to all those other fees is simple: No, I'm not paying that.
As you embark on this process, remember two things:
First, do your research so you know what it is realistic to pay for the car you want. Is your idea of what you should pay reasonably close to what you could actually get the car for from this or another dealer? Remember that the true value of the vehicle can be determined only in the context of what someone who wants to sell the car is willing to sell it for to someone who wants to buy it. Similarly, you should have a realistic idea of what your trade-in is worth, keeping in mind that the dealer will need to invest something in it on top of their acquisition cost and still sell it at a profit.
Second, in almost every case, cars and dealers are fungible. You can find a car you like, but they make millions of them. You don't have to buy the first car you like or buy it from the first dealer you find it at. If you can't find the price you want you can always keep looking.
Location: East of Seattle since 1992, 615' Elevation, Zone 8b - originally from SF Bay Area
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I have always been able to manage at least $4,000 off the sticker, my most recent was in September, a 2017 F150 that was at $46,800 and I got it for $35,000. It's a matter of negotiation, and being willing to walk out and try again elsewhere if they won't meet your deal. I was initially told $8,000 for my 2007 Ranger trade, but was amazed to get $8,400 after they evaluated it. This was our 3rd purchase from this dealer. Once you find a good one, stick with them. I always found the challenge of the car purchase to be great fun, especially when you walk away after the sales person has wasted 2 hours
on you. This place makes it too easy.
dude, don't make mistake by buying a car from car dealer. Majority of the car dealer wanted to make huge profit by trading car. They will charge you high and give less money to the owner. Moreover they won't hesitate to change car parts like tyre, engine, piston and more. I would say, better buy directly from owner.
Not always true. Sometimes dealers give a car away at a loss to move volume. You just have to be a saavy buyer.
The 30 day warranty alone is worth it. I once bought a car from a private owner, test drove it, tried the AC and radio, brakes, popped the hood, tested the suspension...bought it, took it home and low and behold it doesn’t go into reverse.
First: remember that "Sticker" is a fictitious number. Whatever the factory chooses to print on the piece of paper.
Ignore it.
The wholesale (dealer cost) is usually a good place to start, and to it
+ factory fees you must or choose to pay; like delivery charges, and package extra fees, (like sports package, tire upgrades, and such),
+ Dealer fees you must or choose to pay, like dealer-installed packages (like car alarms, sat radios) and such,
+ Tag & Title fees if you decide their cost is worth them doing the hassle of paperwork and daytime trips to the DMV.
+ a 'reasonable' profit to the dealer.
That last number is the ONLY one that should be variable. It's based on the make, model, and options set of a specific car, in your specific location.
Go to forums that are specific to the manufacturer you're considering and do the research on the wholesale costs of the options, existence of factory rebates (sometimes called trunk money), so you can do that math yourself. There, and local and national car selling websites such as KBB, consumer reports, Costco, and such can get you actual local selling prices. Subtract the fees and base wholesale for them to get those car's actual profits so you can get a feel of what your's should be.
It sounds like a lot of work, and it is. I spent about 6 days, 8-12 hours per day on the Internet, but ended up with the car and choices I wanted, for about $1,200 less than some were paying. That's a pretty nice $/hr fee for my time.
Buying 101. Start from the true cost price,not sticker ,not some blue book rate.
Dealer will show you (invoice inflated..(Destination charge,dealer prep) .
Example (fictitious for example purpose) true cost of dealer on a total Camry (minimum bells/whistles). 17299.00 but sticker will say 25785. There is a 8000 gap. So they work from the 25785 and knock off numbers while you should be working as close to the dealer true cost #. To all those profit driven dealer loyal customers,sure a 12% markup from the 17k is a fair business margin.
Car dealers are banking on you working down from sticker and not working from true cost.
Our state deducts trade in cost before subtotalling for taxes.
Read every line item .
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