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Old 12-31-2013, 06:24 AM
 
Location: new yawk zoo
8,619 posts, read 10,996,451 times
Reputation: 6289

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doc fee, process fee, etc etc I know are all scams.

When you lease there is a bank fee. When you finance there is a bank fee. I've leased cars but never financed cars. I either pay cash to own or leased for various reason. It is just something I have noticed over the years.

Destination fee seem to be consistent with make....but it can vary from different make of automobile.

I believe the fee is legit. How much the fee is an open ended answer.
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Old 12-31-2013, 09:23 AM
 
245 posts, read 499,589 times
Reputation: 125
Quote:
Originally Posted by iTsLiKeAnEgG View Post
I'm not familiar with this either. When I bought my current car new from the dealer roughly 2 years ago I took the dealer loan knowing full well that I was going to refi with my credit union a few days later (6.5% versus 1.99%!) I don't recall there being any bank fee or I would have gone a different route.
Itslikeanegg, why did you even bother even taking the dealer loan when you were going to use your credit union? Was there an incentive if you got the dealer loan? Like ending today supposedly is a Honda incentive of $500 if you buy a Honda & finance through Honda Finance. I suppose you could do the Honda finance for instance and pay it off before the first payment is due and get the extra $500. Unless things have changed, you can tell the dealer you have your own financing and they will usually give you a week or more to bring in the balance you would be financing...I believe I did that twice in the 80's with no problem -- took the car home that day & gave them a bank check for the balance within a week.

I've never heard of a "bank fee" either for arranging an auto loan. If the dealer arranges financing for you, they either get a fee from the bank, or a cut of the loan. If they get a fee from you too, then they're really double-dipping. As I recall, in the 80's or 90's I had a dealer-arranged loan in California with Sanwa Bank. The dealer had originally told me that the financing would be 8%; after I had taken the car home, they told me that the best they could do on the financing was 11%. Toward the end of the loan, I had to call Sanwa about something & I was told on the phone that the bank loan was at 8%; I was paying 11% and the dealer was getting the additional 3%! Now there's a "bank fee"!

We just purchased a new car over the weekend. Honda Finance is 1.99% if you want over 36 months (0.99 for up to 36 months). I wanted a 48-month loan so it is the 1.99% rate. There was no "bank fee" for this Honda Loan and it IS at 1.99%. When I inquired about the $500 Honda financing incentive, they took $500 off the price of the car.
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Old 12-31-2013, 09:26 AM
 
Location: SF Bay Area
5,994 posts, read 19,921,773 times
Reputation: 4078
Quote:
Originally Posted by GeorgeJ. View Post
Itslikeanegg, why did you even bother even taking the dealer loan when you were going to use your credit union? Was there an incentive if you got the dealer loan? Like ending today supposedly is a Honda incentive of $500 if you buy a Honda & finance through Honda Finance. I suppose you could do the Honda finance for instance and pay it off before the first payment is due and get the extra $500. Unless things have changed, you can tell the dealer you have your own financing and they will usually give you a week or more to bring in the balance you would be financing...I believe I did that twice in the 80's with no problem -- took the car home that day & gave them a bank check for the balance within a week.

I've never heard of a "bank fee" either for arranging an auto loan. If the dealer arranges financing for you, they either get a fee from the bank, or a cut of the loan. If they get a fee from you too, then they're really double-dipping. As I recall, in the 80's or 90's I had a dealer-arranged loan in California with Sanwa Bank. The dealer had originally told me that the financing would be 8%; after I had taken the car home, they told me that the best they could do on the financing was 11%. Toward the end of the loan, I had to call Sanwa about something & I was told on the phone that the bank loan was at 8%; I was paying 11% and the dealer was getting the additional 3%! Now there's a "bank fee"!

We just purchased a new car over the weekend. Honda Finance is 1.99% if you want over 36 months (0.99 for up to 36 months). I wanted a 48-month loan so it is the 1.99% rate. There was no "bank fee" for this Honda Loan and it IS at 1.99%. When I inquired about the $500 Honda financing incentive, they took $500 off the price of the car.
I believe the reasoning was to take advantage of one of the rebates. I stacked a few of them together and after slamming my head on the sales guys desk for a few hours we got to a fairly attractive price point.
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Old 12-31-2013, 09:32 AM
 
245 posts, read 499,589 times
Reputation: 125
Quote:
Originally Posted by sirtiger View Post
doc fee, process fee, etc etc I know are all scams.

When you lease there is a bank fee. When you finance there is a bank fee. I've leased cars but never financed cars. I either pay cash to own or leased for various reason. It is just something I have noticed over the years.

Destination fee seem to be consistent with make....but it can vary from different make of automobile.

I believe the fee is legit. How much the fee is an open ended answer.
I'm not understanding what the advantage to the dealer is to charge doc fees and process fees? Just to try and hide the true cost of the vehicle? If the actual price is, say, $19,000, but they offer it to you for $18,000 plus $1000 in "fees" tacked on, it's still $19,000. Just the idea that some people will be dumb enough to buy from them because they think it's $1000 less than the dealer across town who wants $19,000 but no fees? I'd prefer to buy it from the $19,000 dealer....

As I mentioned in an earlier post, I've never paid or asked to pay, a "bank fee" on any financed vehicle. I've never leased a car, so maybe that's where you'd usually find it?
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Old 12-31-2013, 09:34 AM
 
245 posts, read 499,589 times
Reputation: 125
Quote:
Originally Posted by iTsLiKeAnEgG View Post
I believe the reasoning was to take advantage of one of the rebates. I stacked a few of them together and after slamming my head on the sales guys desk for a few hours we got to a fairly attractive price point.
Then I'm assuming that there was no penalty for paying off the dealer loan early?

I hope they were pissed when they found out you stuck it to them...
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Old 12-31-2013, 09:57 AM
 
Location: SF Bay Area
5,994 posts, read 19,921,773 times
Reputation: 4078
Quote:
Originally Posted by GeorgeJ. View Post
Then I'm assuming that there was no penalty for paying off the dealer loan early?

I hope they were pissed when they found out you stuck it to them...
No penalty! I'm not sure how the reporting takes place on the dealer level (how they track loans sourced from their location) but the sales guy flat out lied to me when he said that I'm not able to refi with another lender. When I pushed for details, he gave me a kind of brushed off "Take your chances if you'd like" response. I just verified that there is no penalty for paying a loan off early which is essentially what happens with a refi.
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Old 12-31-2013, 10:17 AM
 
Location: new yawk zoo
8,619 posts, read 10,996,451 times
Reputation: 6289
Quote:
Originally Posted by GeorgeJ. View Post
I'm not understanding what the advantage to the dealer is to charge doc fees and process fees?
as noted, its just a BS fee that makes appear legit.

I've helped people close to me deal with auto purchases in the past. If there is a newspaper ad, there is a fine print of all the make believe fees. At the end, no matter what they call it, I focus on the bottom line...with or without the fees.

Of course some are 100% legit...state sales tax, dmv fees, tire fees (for nys), etc.
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Old 12-31-2013, 01:00 PM
 
Location: Sugarmill Woods , FL
6,234 posts, read 8,387,089 times
Reputation: 13809
Just another way to get your trade in for FREE!
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Old 12-31-2013, 01:48 PM
 
4,709 posts, read 12,629,654 times
Reputation: 3813
Quote:
Originally Posted by edwardvanderbosch View Post
Just another way to get your trade in for FREE!
EXACTLY!

I never muddy the waters with a trade-in.
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Old 01-02-2014, 07:05 AM
 
Location: Morrisville, NC
9,128 posts, read 14,683,015 times
Reputation: 9032
Never seen a bank fee either. That's really crappy, because if you use the dealers preferred finance company, they usually get a commission from the bank for the loan. Talk about double dipping!

This is one of the reasons why it is best to do research ahead of time, know the details and separate the transaction into three parts. Trade is one, sale of car is two, financing is three.

Especially with places like CARMAX and the many local competitors, you can go get your car appraised and know what the floor will be. You can still try to sell privately as well, which will usually give you the most money, but there are plenty of places that will buy your car. Use services like Edmunds, KBB, etc to check prices and compare. If the dealer gives you something you are comfortable with, knowing this info, all the good. Otherwise go elsewhere to get rid of the current car.

Use the internet again for pricing. Find out as much info as you can. Check a car forum for that model and ask around. Often, dealers will have an internet department that sells separately. Send an email (used to be by fax) with the specs on the car you want to several dealers nearby. Tell them you are trying to by next week, month, whatever and get you the best price on the car. They will respond and usually 95% of your negotiation can be done via email.

Get financing ahead of time. Local bank or better yet credit union is a good place to start. If you are not a member, maybe your employer has a deal so you can join. Capital one has a good financing program with very competitive rates. USAA if you are a member or can qualify is usually good. Pentagon Federal Credit union has really good rates and you can join some military support organizations that allow you to become a member for under $50. Once you have your preapproval, now you know your worst case. If the dealer can beat them, hey, more power to them. You win with lower rates and they get a commission.

Put all the numbers into a spreadsheet and see how it works out.

The last three cars I have bought, on two, I did all the negotiation over email on price, financing, etc and just picked up the car at the dealer and signed the check over. The last one, I did most of it via email and did a little finalization in the dealer showroom. I just took in my iPad with Quickoffice HD in and was able to re-do some things on the fly. So, when he had to go back to the sales manager, I could compare numbers and know the deal, so they could not confuse things.
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