What's the deal with "dealers fees"?

[eljefino]

Why is everyone concerned about the dealer making a "fair profit"? I guarantee they aren't concerned about your paying a fair amount!! I feel no guilt about buying day old bread at 40% off...

Sometimes they really will sell cars at a loss-- A coworker got a plymouth sundance for $7K when the Neon was coming out-- the dealer wanted a better allocation of Neons so Chysler "dared" them to dump sundances to make room.

I bet chevy dealers looking at 10-15k profit on an early production camaro would sell a half dozen aveos, or whatever is slow going, at a loss if properly motivated.

Referenced around page 2, nailing down the sale price, then the trade in, down payment and financing is the way to go... dealers have a 4 box square where they get you on the last box.

 

[Audi Junkie]

For my Accord deal, I researched the price and trade value, went in and put it in the table. Sales Mgr said the numbers were "very agressive", but I went home a hour later with a done deal.

 

[RWEST]

Quote:
dealers have a 4 box square where they get you on the last box.

Bingo!!

Check out this confessional. There's a video link, or, click in the "Navigation" box for some interesting reading on selling tactics. Very enlightening!!

 

[saberz]

Thats a very good read, very enlightening. Thanks for the link!

 

[PT1]

Originally Posted By: bigdreama

Has anyone here been able to get around this bogus fee?


Yes, take a sharpie marker with you and cross it out. If they object, leave.

 

[Audi Junkie]

Originally Posted By: PT1
Originally Posted By: bigdreama

Has anyone here been able to get around this bogus fee?


Yes, take a sharpie marker with you and cross it out. If they object, leave.


lol, I will try this advice next time.

 

[javacontour]

Originally Posted By: benjamming
java,

Go back one step. I'm trying to determine how you arrive at $10k.

Win,

What do you use for % profit or is it not anywhere near that concrete?


I don't care about their profit. I have a figure I'm willing to pay, usually based on Edmunds.com values.

If I'm trading, I usually figure whole sale trade to wholesale trade if I'm buying a used car, or some other apples to apples value, add say $100 and figure my OTD price.

I'll compare all three Edmunds true value prices. Trade to Trade, Retail to Retail and Private Sale to Private Sale. What I'm looking for is the delta in price if I'm trading. So if my trade is $2K on the trade value and the car I'm looking at is $12K trade-in value, then I'm looking to pay around 10K for the car.

So out the door, like I said $10,600 to $10,650.

This obviously doesn't work if the car you are looking to buy is a hot car.

I went in one time with a list of similar cars for sale, this was a no trade deal, made a $10K OTD offer on a car they were trying to sell for $119xx. They said no. I pulled out my list of 25+ cars with similar mileage and equipment and said you can take my offer or you can let me walk and I'll see if any of these folks will take my offer.

I drove away with the car for $10K, what I wanted to pay.

There is no way I can know how much profit a dealer makes, and I'm certainly not in any position to decide how much they should make.

I have a technique of figuring out what I'm willing to pay, and they either meet my number or I don't buy the car.

I'm in a good position that I have three cars, so I never feel pressured that I have to buy today. In fact I tell them, I have three cars, if I'm trading, I tell them, no hiding the information. If I'm not, I tell them.

I tell them I'm pre-approved for my financing, but I'll give them a chance to beat the rate if I'm financing.

It takes about 30 minutes. Either they sell me the car for a price I'm happy with, or I leave.

No need for histrionics. It's not personal, it's not emotional, it's business.

Sometimes they want to sell the car and other times they don't.

Sometimes I've set the price too low and nobody wants to sell.

If so, then I have to decide if I want to offer more or not.

But I only say yes if I'm comfortable with the deal, period.

 

[Cogito]

An acquaintance told me they used the following plan when buying a car. They go to a dealer and tell the salesperson that they are ready to buy a car right then. They have an out the door figure written down on a piece of paper in their pocket. The dealer gets one chance to "bid" on their business. If the dealer meets or beats the customer's number, the customer buys the car. Otherwise, he walks. My acquaintance says it works.

 

[nthach]

Originally Posted By: Drew99GT
Originally Posted By: Thermo1223
Someone explain this to me.

Every used car I have bought has always been almost $2k below retail value. Do I just get that lucky?

I mean I check values and everything it just always has been.

Although I never bought new so maybe thats why.


Wholesale used car prices are LOW! If anyone ever has the chance to go to a dealer auto auction, go. Your jaw will hit the floor at the prices dealers pay for cars. That's why there's so much more profit in used cars.

I've actually looked at the Black Book, which is the wholesale version of the Blue Book. I've had a chance to go to the Mannheim auctions, but I was in class that day.

During my 1 year stint at a Honda dealer, we added on a variable markup and we loaded cars with a "pro pack" which is basically door edge guards for $250, our cost is $20 - but earlier this year we did it in-house with 3M Scotchgard tape and our cost is $2/car not including labor. We also added on mud flaps on Accord/Civic/Odyssey/Pilot models and wheel locks on cars with alloy wheels. Our costs for those were $50 and $30, respectively.

We also pre-loaded Karr alarms onto cars as well, finance was asking $700 for them to be activated - for a $100 less you can get a much nicer Viper 2-way installed. The Karrs were rudimentary alarms and there are 3 models: the red 2040 which was installed on used cars and base model Fits and Civics - the base Fit actually has a option for OEM keyless entry, just get a remote key and enable the option in the HDS. The 2040 is a keyless entry+alarm system. The blue 4040 was a alarm system for cars without OEM security and the green EX-1 is for cars with OEM alarms. Finance also sold window etching and paint+fabric protection. They are worthless, I did a fabric protection job on my parent's Prius and it still didn't protect the interior.

 

[VNTS]

I have never paid sticker MSRP, that is poor advice, the salesman would wet their pants to do a deal with you LOL I have always paid invoice or less and usually also only agree after they throw in rebalancing the tires to move the weights on the inside to save the clear coat.

My friend sold cars for 20 years, said you should shoot for 500$ over invoice, period. Then subtract rebates and tell dealer to shove it on Doc fees. They can whip up the paperwork in 15 minutes, remember were not getting Larry Bird's or Tom Brady',s signature so no need to get ripped. Only scam is Toys factory to dealer holdbacks/incentives you have to be a little more educated to know that a lot of time Honda and Toy pull this [censored] where they dont tell the customers that there is cash on the hood, only the people who find out about it can remove it from the salesmans hands and obtain what they logically have coming, one of the reasons I detest those two brands, just more hastle to get the correct rebate LOL remmeber dealer still get 3% profit on holdback.


Originally Posted By: Drew99GT
Originally Posted By: Bill in Utah
My rule of thumb (and in over 30+ years of buying new/used for family/friends and myself) is if the vehicle stickers for $20k, pay NO MORE OUT THE DOOR than $20k incl ALL "fees".

NEVER pay more than the sticker out the door.

That's what my Dad, a former car salesman, has basically taught me. Sure, you can haggle down to the nitty gritty about dealer holdback and whatnot (ie, the "invoice price" on a sticker is more then a dealer actually bays for a car because the manufacturers give them holdback money to help finance operations), and try and shoot for the magic deal of getting a car at the sticker invoice price.

The easiest thing is to offer MSRP OUT THE DOOR (not including tax/title/license fees of course). If they want to do the bull [censored] fee game, they can have their accountants sort that out in the end cause I'm not going to pay some handling fee of $500 bucks more then their asking price for the car.

This is yet another reason why buying low low mileage used/lease returns is so much easier because dealers make so much more profit off them and there's a ton of wiggle room in there.

When we bought our Impala, their sticker price was in the NADA ballpark for dealer retail, it was an off lease return they got at an auction (carfax and autocheck verified), so we knew they had several thousand in profit all ready. My Dad offered them a thousand under NADA dealer retail out the door (ie they can "account" for their bull [censored] handling fee how they desire - out the door is out the door) and the guy laughed. My Dad didn't bat an eye, turned around and walked said out loud "lets go look at the other Impalas on the list".

The sales manager ran up stopped us and said we had a deal!

 

[wapacz]

See I find all this stuff well kind of weird. As all my car purchases where done with gms, the gm employ discount. With the set up you take the sticker price then get a discount off of that. I think the last one was like 4,000 off a 38,000 sticker. Then you got regular incentives which at the time was 6,000 dollar and the truck was a demo so there was another couple grand taken off.(I test drove the demo while the guy that was current driving it had all his stuff in it and it was very clean and had a baby seat in the back.) So the price before tax and such ended up being around 26,000.

Not sure if it works out to getting the best deal but it sure makes the whole experience much easier and less stressful.

 

[Win]

Originally Posted By: benjamming

Win,

What do you use for % profit or is it not anywhere near that concrete?


Anytime the dealer agrees to sell a car, it was a profitable transaction for them, otherwise they would just decline the offer.

To me, getting a new car is an event that should be fun, not an adversarial ordeal with the people that will be servicing the car in the future.

I have never paid a doc fee - to me that is part of the dealer overhead that the profit on the sale covers, but if a doc fee was non taxable, I would ask the dealer to make it as large as they could get away with, so long as it reduced the taxable price of the vehicle by the same amount.

Other than tax consequences, I just don't care how they designate fees on the sales contract, worry about whether or not I have dug deep enough into the holdback that I'm not supposed to know about anyway, or that someone, somewhere, on the internet claims to have somehow gotten the same thing cheaper than I did.

If I did, it would definitely take the fun out of the event for me, so I just decide what it is worth to me, and be done with it. I never second guess or what if the decision.