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Old 04-19-2010, 02:45 PM
zox zox started this thread
 
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I'm purchasing a vehicle that the dealer would have to ship from another dealership. They are charging me $800. They are also charging me an additional destination/delivery charge of $850. This is a Cadillac. The last Cadillac I purchased from a different dealership didn't include a destination charge. What is this charge? Second question, when calculating sales tax, do you multiply it times the price of the vehicle (invoice + anything over) or do you multiply times the total price of the vehicle including all of the charges (destination charge, doc fee, invoice + charges over invoice)

Last edited by zox; 04-19-2010 at 02:54 PM..
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Old 04-19-2010, 02:51 PM
 
Location: Planet Eaarth
8,955 posts, read 18,057,390 times
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detination charge trucks the car to the dealer and deilvery is the dealer charge to get it ready to sell.

the factory just builds the car. both charges are legit.
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Old 04-19-2010, 03:30 PM
 
Location: Say-Town! Texas
968 posts, read 2,236,497 times
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Quote:
Originally Posted by Tightwad View Post
detination charge trucks the car to the dealer and deilvery is the dealer charge to get it ready to sell.

the factory just builds the car. both charges are legit.
just tell the dealership you don't want to pay those charges and if the price is still fair they may take them off. just don't let the dealership tack on extra charges to replace them

oh the dealership will calculate the sales tax by multiplying ALL costs. if they tacked on a car wash fee, better believe that will be taxed at the time of purchase.
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Old 04-19-2010, 03:31 PM
 
14,781 posts, read 36,752,160 times
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Quote:
Originally Posted by zox View Post
I'm purchasing a vehicle that the dealer would have to ship from another dealership. They are charging me $800. They are also charging me an additional destination/delivery charge of $850. This is a Cadillac. The last Cadillac I purchased from a different dealership didn't include a destination charge. What is this charge? Second question, when calculating sales tax, do you multiply it times the price of the vehicle (invoice + anything over) or do you multiply times the total price of the vehicle including all of the charges (destination charge, doc fee, invoice + charges over invoice)
First things first, I would find another Cadillac dealer.

Destination charges are set by the manufacturer and are universal across the country by particular model. So, let's say you are buying a Cadillac CTS and the destination charge is $800. You will pay that charge regardless of where in the country you bought the car. Please note that some manufacturers call this a delivery charge and the term is interchangeable.

Delivery charges in this case are billed by some dealers as the cost of prepping the car and "delivering" it to the customer. This is a dealer add-on and is negotiable.

In your case the first $800 fee is what the dealer has to charge you per GM for the vehicle and this will not fluctuate between dealers and is printed on the window sticker. The second fee is what this dealer is charging you to get the vehicle from another dealer and prep it for you. This is a dealer charge and is negotiable. Given the current climate short of you getting a smoking near zero profit deal, there is no reason for the dealer to charge this much, if anything for this service.

When it comes to taxes, you pay taxes on the actual price of the vehicle and this does not include any fees, (except for fees charged by the manufacturer such as the desination charge and occasionally an advertising fee that are baked into the MSRP). So, it should be nothing else except the price of the vehicle including any options + manufacturer fees to calculate the tax.

If you are looking for the best deal, the way to get it is to research the actual invoice price of the vehicle with the options you want. Then deduct any rebates (both to you and back end dealer rebates) then deduct any dealer holdback (money paid by the manufacturer to the dealer for selling the car). This nets you out to the true dealer invoice price. Then add back in 3%-5% for dealer profit and add in the destination charge, sales tax, and DMV fees. You would also add in any dealer installed options if you bought any. That will net you a "fair" deal to both parties.

In that example, let's say the car you want to buy has an invoice price of $40,000 (not counting destination charge). Take that amount and deduct the dealer holdback (3% for GM) which is $1,200. Then deduct any rebates to you and and dealer cash incentive (it takes some research to figure that out) let's say in this case $3,000 to you and another $1,000 to the dealer you aren't supposed to know about. The actual invoice price of our car is now $34,800 ($40,000 invoice - $1,200 dealer hold back - $3,000 customer rebate - $1,000 dealer cash).

You then take $34,800 and add 5% ($1,740 in this case) for dealer profit. You then add in the destination charge (we'll use your $800). So the actual vehicle cost is $37,340 (price paid+destination). You will pay taxes on $37,340. If your states rate was 6% that would be $2,240.40. You then add in DMV fees (let's say $250) which would bring the total price paid to $39,830.40.

The numbers above were made up but represent the way of getting the "best" deal without beating the dealer over the head and being fair to both sides. Using that example you saved $487.60 ($460 of pure dealer profit + the associated sales tax).

Virtually any other fee outside of what I listed is bogus unless it appears on the actual dealer invoice from the manufacturer and these can occasionally include an advertising fee. Whatever fees are on the dealer invoice from the manufacturer are considered part of the sales price and are taxable. If your invoice has one of those, be sure to deduct them before calculating dealer profit. You may also want to start negotiations at 3% dealer profit during slow times like this and maybe even go so far as 1% or 2% on a poor performing model.
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Old 04-19-2010, 04:46 PM
 
Location: Lehigh Acres
1,777 posts, read 4,236,752 times
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Delivery charge is what you're being charged to get the vehicle from another dealership to the one you are purchasing from. It's a fee to load your car onto a truck and haul it to you. Completely legit, if you aren't willing to buy something they have on the lot, it's easier for them to get a car NOW from another dealer that fits your bill, than wait 6-8 weeks or longer for a factory order.

The destination charge is what GM charges the dealer to haul the cars from the factory to the dealership, either way, you pay it, it's part of MSRP
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Old 04-19-2010, 06:05 PM
 
10,720 posts, read 17,767,252 times
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Quote:
Originally Posted by NJGOAT View Post
First things first, I would find another Cadillac dealer.

Destination charges are set by the manufacturer and are universal across the country by particular model. So, let's say you are buying a Cadillac CTS and the destination charge is $800. You will pay that charge regardless of where in the country you bought the car. Please note that some manufacturers call this a delivery charge and the term is interchangeable.

Delivery charges in this case are billed by some dealers as the cost of prepping the car and "delivering" it to the customer. This is a dealer add-on and is negotiable.

In your case the first $800 fee is what the dealer has to charge you per GM for the vehicle and this will not fluctuate between dealers and is printed on the window sticker. The second fee is what this dealer is charging you to get the vehicle from another dealer and prep it for you. This is a dealer charge and is negotiable. Given the current climate short of you getting a smoking near zero profit deal, there is no reason for the dealer to charge this much, if anything for this service.

When it comes to taxes, you pay taxes on the actual price of the vehicle and this does not include any fees, (except for fees charged by the manufacturer such as the desination charge and occasionally an advertising fee that are baked into the MSRP). So, it should be nothing else except the price of the vehicle including any options + manufacturer fees to calculate the tax.

If you are looking for the best deal, the way to get it is to research the actual invoice price of the vehicle with the options you want. Then deduct any rebates (both to you and back end dealer rebates) then deduct any dealer holdback (money paid by the manufacturer to the dealer for selling the car). This nets you out to the true dealer invoice price. Then add back in 3%-5% for dealer profit and add in the destination charge, sales tax, and DMV fees. You would also add in any dealer installed options if you bought any. That will net you a "fair" deal to both parties.

In that example, let's say the car you want to buy has an invoice price of $40,000 (not counting destination charge). Take that amount and deduct the dealer holdback (3% for GM) which is $1,200. Then deduct any rebates to you and and dealer cash incentive (it takes some research to figure that out) let's say in this case $3,000 to you and another $1,000 to the dealer you aren't supposed to know about. The actual invoice price of our car is now $34,800 ($40,000 invoice - $1,200 dealer hold back - $3,000 customer rebate - $1,000 dealer cash).

You then take $34,800 and add 5% ($1,740 in this case) for dealer profit. You then add in the destination charge (we'll use your $800). So the actual vehicle cost is $37,340 (price paid+destination). You will pay taxes on $37,340. If your states rate was 6% that would be $2,240.40. You then add in DMV fees (let's say $250) which would bring the total price paid to $39,830.40.

The numbers above were made up but represent the way of getting the "best" deal without beating the dealer over the head and being fair to both sides. Using that example you saved $487.60 ($460 of pure dealer profit + the associated sales tax).

Virtually any other fee outside of what I listed is bogus unless it appears on the actual dealer invoice from the manufacturer and these can occasionally include an advertising fee. Whatever fees are on the dealer invoice from the manufacturer are considered part of the sales price and are taxable. If your invoice has one of those, be sure to deduct them before calculating dealer profit. You may also want to start negotiations at 3% dealer profit during slow times like this and maybe even go so far as 1% or 2% on a poor performing model.
You have to be realistic. I'm not a dealer and I've read advice about getting the best deals on websites like carbuyingtips.com. Their advice is helpful not practical. It's obviously going to depend on the demand of the car that you are buying. Most dealers base their sales tax on the total price of the vehicle including all fees. That is standard. You can try to ask them to base that on the vehicle, options and destination fee only but fat chance of that happening. And a dealer is not going to allow you to negotiate the true invoice price by subtracting holdback and manufacturer rebates for a Cadillac or a luxury car that is in demand especially if its an Escalade. Everything you said is accurate. I just don't think it's practical advice. You can try telling. The only time I got away with doing this was when I bought my Hyundai because they were trying to make a name for themselves and were just trying to sell cars. Try pulling this at Benz or BMW dealership, it just won't happen
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Old 04-20-2010, 07:53 AM
 
14,781 posts, read 36,752,160 times
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I've gotten away with it at BMW and Audi dealers in the past. You usually stand the best chance at larger dealerships where they are trying to move models. In the case of German brands the dealers get additional bonus money from the manufacturer for meeting sales targets on certain vehicles and overall sales. In this case going in at the end of the month can actually work to your advantage.

It just really comes down to being an informed shopper. Pick the car you want and then research the hell out of it. See what it's sales are like, troll the internet and see what other people have paid, look up all the info you can on discounts and incentives to you and the dealer, etc. Car dealers prey on uninformed shoppers.

You may not be able to get them to dip into their holdback or dealer cash, but you are much better off knowing about them before heading in. If you want/need the car now you will pay more for it then if you have the luxury of time to negotiate and shop around. One of the important points is knowing that the dealer has to make money, just how much is determined by how popular the car is and how quickly you want to get your hands on it.
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Old 04-20-2010, 08:30 AM
 
Location: Purgatory (A.K.A. Dallas, Texas)
5,010 posts, read 13,361,001 times
Reputation: 2444
Both charges are legit. The $850 covers taking whatever vehicle they are trading to the other dealer and picking up yours and trucking it back. They contract that out to a delivery company, so it's a charge they have to pay.
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Old 04-20-2010, 08:32 AM
 
Location: Purgatory (A.K.A. Dallas, Texas)
5,010 posts, read 13,361,001 times
Reputation: 2444
Quote:
Originally Posted by NJGOAT View Post
First things first, I would find another Cadillac dealer.

Why?
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Old 04-20-2010, 09:10 AM
 
14,781 posts, read 36,752,160 times
Reputation: 14410
Quote:
Originally Posted by getmeoutofhere View Post
Why?
Well, I guess we really need more info on where the OP is, what car they are buying and where the dealer is located that has the car.

If the dealers are remotely close to each other the OP could just buy the car from the other dealer. Additionally, the charge is rather excessive and leads me to believe they are charging for more than just going and picking up the other car.

If the other dealer is really far away, then it would beg the question as to why the OP wouldn't just order the car he wants and pick it up in 6-8 weeks, assuming that the model he wants is still currently in production.

Also, just because the charge is high doesn't mean it isn't legit, but then the rest of the deal comes into question. In this case, my gut is that the dealer doesn't want to buy it from the other dealers inventory or do a swap and would much prefer to have the OP buy the car on his lot that may be missing an option or have a different color than what the OP wants, so he is milking the deal a bit.
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