So dealers charge many little fees. I'm sure most of us have been to dealerships before and after the "negotiating" process, were surprised to find that there were some more fees tacked on at the end! Today we'll discuss those little fee's and whether or not their legit and what they are used for.
Doc (documentary fees) - Every dealer charges a documentary fee. The fee is associated with the cost of forms and documents, handling and obtaining motor vehicle, and to pad the dealers profit as well. A typical documentary fee will run anywhere from $99 on the LOW side, all the way up to $500. Maybe more. Most dealers will be in the $149-299 range. Anything more should be justified, and hopefully have a valiant excuse as to why the fee is so high. You may even try to haggle with this fee, but don't expect to get very far.
Window Etching - At 90% of dealers, window etching is a joke. It costs less than $15 per car for the actual etching, and another $50 to register the actual etch number. Most dealers will charge $249 for the window etching, and most of the time don't actually pay the fee to implement the contract.
Extended warranties - Ones that are offered and truly backed by the manufacturer are the best ones to go for. These are good at any dealership in the continental United States. They are worth it if the dealer will discount a little off the MSRP. they are transferable, and most of the time you can extend the bumper to bumper warranty for up to 100,000 and possibly 10 years. Especially on todays new more technologically advanced vehicle, it makes sense. Average navigation systems will cost approximately $1500 or more depending on the manufacturer. They are definitely worth the second glance.
Dealers offer pin-striping, simonize applications, and other packages that will earn more profit for the dealership. For instance, a roll of pinstripe costs about $10. Dealers will charge $195. All these packages do something, but create much profit for the dealership.
Be careful of the games dealers may play. Note that these fees are normal and be prepared for them!
Thursday, March 27, 2008
Wednesday, March 26, 2008
Tips for the BEST deal!
In today's day and age, buying a car can be easier than ever. It can also be harder than ever. Once you settle on a specific vehicle(s), the negotiating begins. The BEST most FOOL PROOF way to get the best deal is as follows:
1) Edmunds.com for invoice vs. TMV pricing. Also do research so that you are informed about any customer AND dealer incentives. Edmund's may not know about these dealer incentives as they had nothing posted for the month of March for "our" dealership. Look at TMV pricing to see what other people are paying.
2) Find the dealerships most recent newspaper ad. Look at the vehicles listed. Where it says dealer discount, KEEP TRACK of this. Make sure there is no "dealership" loyalty incentives. This is a game dealers use and hardly anyone will qualify. It's set up so that only people who have purchased their last 5 vehicles from that dealership qualify, and they must be trading in a vehicle that they purchased in the last 6 months. It's a game.
3) E-mail the dealers in the area. NOTE: over the Internet dealers are not required to include DESTINATION in the price of the vehicle. Invoice pricing reflects destination as being included. ALSO, ask for a specific breakdown of ALL the costs associated with the purchase of the new vehicle. You want an itemized list, and an OTD (Out The Door) price. Tax's, motor vehicle, EVERYTHING included.
4) Now what you need to do is compare dealer to dealer, and possibly visit each dealer. As long as you get a price near invoice, less any incentives, you have done a good job. Keep in mind that dealers will play games and that what may seem like the best deal, could turn out to be a complete phony. Until you actually sign the paperwork in the office and take delivery of the vehicle, your not out of the clear. Some dealers will actually deliver the car and then call you back because there was an "error" on the documentation.
Every dealer is different, and depending on what kind of vehicles they are selling, you may find that they may not be willing to negotiate at all. Just beware for the "highway" dealers. They are notorious for playing games and doing anything to sell you a vehicle.
Note that you should always have insurance, credit approval, and proper documentation for both. Dealers will do "spot" deliveries where they will put you in the car and you will drive away, without any of the formal paperwork completed. Once you drive away in the new car, you'd hate to give it back. If they come back and tell you that you've been approved at a tier 3 rate and your monthly payment goes up $15/month, you may feel obligated to pay the difference. This is just one of the MANY games they may play.
Next time we'll discuss dealer fee's...such as Doc (documentary fees), window etching, that "appearance" package, extended warranties, and other fee's associated with additional revenue earning practices that dealers use.
1) Edmunds.com for invoice vs. TMV pricing. Also do research so that you are informed about any customer AND dealer incentives. Edmund's may not know about these dealer incentives as they had nothing posted for the month of March for "our" dealership. Look at TMV pricing to see what other people are paying.
2) Find the dealerships most recent newspaper ad. Look at the vehicles listed. Where it says dealer discount, KEEP TRACK of this. Make sure there is no "dealership" loyalty incentives. This is a game dealers use and hardly anyone will qualify. It's set up so that only people who have purchased their last 5 vehicles from that dealership qualify, and they must be trading in a vehicle that they purchased in the last 6 months. It's a game.
3) E-mail the dealers in the area. NOTE: over the Internet dealers are not required to include DESTINATION in the price of the vehicle. Invoice pricing reflects destination as being included. ALSO, ask for a specific breakdown of ALL the costs associated with the purchase of the new vehicle. You want an itemized list, and an OTD (Out The Door) price. Tax's, motor vehicle, EVERYTHING included.
4) Now what you need to do is compare dealer to dealer, and possibly visit each dealer. As long as you get a price near invoice, less any incentives, you have done a good job. Keep in mind that dealers will play games and that what may seem like the best deal, could turn out to be a complete phony. Until you actually sign the paperwork in the office and take delivery of the vehicle, your not out of the clear. Some dealers will actually deliver the car and then call you back because there was an "error" on the documentation.
Every dealer is different, and depending on what kind of vehicles they are selling, you may find that they may not be willing to negotiate at all. Just beware for the "highway" dealers. They are notorious for playing games and doing anything to sell you a vehicle.
Note that you should always have insurance, credit approval, and proper documentation for both. Dealers will do "spot" deliveries where they will put you in the car and you will drive away, without any of the formal paperwork completed. Once you drive away in the new car, you'd hate to give it back. If they come back and tell you that you've been approved at a tier 3 rate and your monthly payment goes up $15/month, you may feel obligated to pay the difference. This is just one of the MANY games they may play.
Next time we'll discuss dealer fee's...such as Doc (documentary fees), window etching, that "appearance" package, extended warranties, and other fee's associated with additional revenue earning practices that dealers use.
Tuesday, March 25, 2008
Invoice pricing?
What is invoice pricing? In a sentence, invoice pricing is a posted amount that the dealership purchases the vehicle from the manufacturer for. As many of you may or may not know, the dealer does receive back incentives from the manufacturer, in the form of holdback. Now most dealers don't mention anything about holdback, and if you mention it to them they look at you with a starry eyed, deer in the headlights, face. In reality dealers will get back approximately 2% of MSRP. Do the math, 2% of $20,000(MSRP), is $400. So theoretically if that dealer sells the vehicle for the invoice price, they will make a $400 profit. Some manufacturers may give back approximately 4%. (Subaru).
The one issue with holdback is that dealers will not see this money for a time period after the sale of the vehicle. It depends on the manufacturer. In general I would say it may take up to 3 months to get this money back. So any money below invoice, won't be seen for as long as 3 months after the vehicle is sold.
In reality, Invoice for most FOREIGN car manufacturers, is approximately $1,000 less than MSRP. Edmunds.com is rather close when giving out the invoice pricing on vehicles. Although in the 4 years I have been working that people bring me Edmunds, there have always been some price discrepencies. Any deal at about invoice is an exceptional deal. Minus the available rebates of course. On some newer more exclusive vehicles, dealers may be more reluctant to discount off of MSRP. It's all a balance between suply and demand.
For any questions, feel free to post!
The one issue with holdback is that dealers will not see this money for a time period after the sale of the vehicle. It depends on the manufacturer. In general I would say it may take up to 3 months to get this money back. So any money below invoice, won't be seen for as long as 3 months after the vehicle is sold.
In reality, Invoice for most FOREIGN car manufacturers, is approximately $1,000 less than MSRP. Edmunds.com is rather close when giving out the invoice pricing on vehicles. Although in the 4 years I have been working that people bring me Edmunds, there have always been some price discrepencies. Any deal at about invoice is an exceptional deal. Minus the available rebates of course. On some newer more exclusive vehicles, dealers may be more reluctant to discount off of MSRP. It's all a balance between suply and demand.
For any questions, feel free to post!
Dealership experiences
Who has had a rough time at a car dealer? Car dealers in general have a pretty bad reputation. Some dealers are friendly and courteous, while others have bad names for themselves and are known for their games, high pressure, and unpleasant atmosphere.
I've been working for a family dealership for almost 4 years now. We pride ourselves on our low pressure, hassle-free buying experience. We aim to make everyone happy, and our main focus is on customer satisfaction. But what about other dealers who are focused on the bottom line and delivering as many cars as possible, and making as much money as possible?
This blog will discuss some common buying experience horrors, and if YOU, the consumer, feels as though they obtained a fantastic deal, or feel like you've been had.
Stay tuned for a behind the scenes look into the Auto dealership workings!
I've been working for a family dealership for almost 4 years now. We pride ourselves on our low pressure, hassle-free buying experience. We aim to make everyone happy, and our main focus is on customer satisfaction. But what about other dealers who are focused on the bottom line and delivering as many cars as possible, and making as much money as possible?
This blog will discuss some common buying experience horrors, and if YOU, the consumer, feels as though they obtained a fantastic deal, or feel like you've been had.
Stay tuned for a behind the scenes look into the Auto dealership workings!
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