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Pure profit markup. New cars have the the words "dealer markup" on the window sticker.
Destination fees and dealer markup are discount #1 in my eyes. I have always told them to scratch them at the onset. Any fees a dealer wants to add is BS. Are they selling a car or trying to sell you perceived great service?
I only buy used from private parties now. Cash works great.
What you've really got to be careful of is the dealer "slipping" the prep fee in the paperwork at the last second, making it seem like a mandatory fee or tax, like sales tax and transfer fees.
Some dealers will add all this crap in and then subtract it back out to get to your agreed upon "bottom line". Watch carefully....they really are cleaver with getting you lost in the figures.
It kind of a "slight of hand" thing.
You've really got to SLOW the whole process down-particularly with the finance guy- and make sure you understand every charge, before signing anything.
Either they want to sell the car or they don't. If you can't buy a car at the price you want to pay, walk away. There are plenty of cars in the world to buy.
What you've really got to be careful of is the dealer "slipping" the prep fee in the paperwork at the last second, making it seem like a mandatory fee or tax, like sales tax and transfer fees.
Excellent point.
Many get "extra" fees at the back end of the deal/purchase.
In other words they agree to a price/fees. And that is what they think that they are paying.
But slipped in are one or MORE fees.
Mostly done when financing through dealership or a lease.
Cash sales or paid in full is a little more difficult to add in extra fees/costs.
How many actually READ all of the documents presented to them?
In my last new car purchase all was ready to sign and all of a sudden a $300.00 Processing Fee showed up. It took a few more go arounds to get it removed.
I was at a car dealership today test driving a used car. I really liked the car, so anyway we go inside to talk numbers and they wouldn't budge on the price. So, the price they wanted wasn't too bad and was in my budget, but then they started tacking on all these other fees, so it ended up being about $3,000 more than I wanted to spend ($300 Motor Vehicle Fee, $900 dealer Prep Fee, plus tax on the purchase price which is expected). I asked the salesman what the prep fee was for, and he said it was for the 100 point inspection (or whatever they call it) but I remembered when I was first looking at the car he said it went through their 100 point inspection, so I called him out on it, and said so you are charging for something that was already done on the car in the past? and he said yes. I told him I would buy the car right now if he waived the prep fee and he said he couldnt and that we were "miles apart". I declined to buy the car and walked because he wasn't willing to waive or come down $900 on a $17,000 vehicle. So, was I right in doing so? I mean the way I see it, 300 for motor vehicle fees is a bit high, plus a 900 dollar bull---t fee....most mechanics will visually inspect a car and not even charge for it.........
I don't know too many mechanics who like to work for free. At my shop a buyer's check is about $120 and that's lower than some. Of course, agreed the fees this dealer wants to charge you are a little silly.
Man, I love it when dealers do that. Seriously, it allows me to weed out the ones I won't do business in the future.
Most try to steamroll me on fees. I work in the financial services industry. You're not going to sell me on arbitrary fees. I have no problem paying for bona fide services, and am willing to pay a bit more for quality and service.
You try to pull a fast one on me, and I simply just walk away.
Don't think prep fees are prevalent where I am cause I don't remember ever being charged for it. Only fee is 'doc fee' which I don't have a problem paying since it's capped at $80.... I've heard upwards of $2000 in other areas that aren't regulated.
Update: The dealer called me this morning. I missed the call (inadvertently). The salesman asked me on voicemail if I was still interested in the car and if I wanted to talk more about the numbers. I am not calling back. The way I see it, he had his chance to lower the price. He refused to budge. The last thing I said to him before I left the dealer yesterday was "so you aren't even going to try and negotiate?" and he replied "no, we are miles apart."
So, now he wants to talk? Give me a break. What a waste of time, or a bad salesman.
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