Question for car buyers

[Bob Noel]

Would you rather see a lower advertised price on a new vehicle knowing you would have to add for additional fees, doc fee etc. OR would you prefer a higher advertised price with no additional fees other than tax and the cost of the registration? Assuming the net cost to you is the same. For those that don't know, I am a car dealer.

I want the real price.

I don't understand the "documentation fee". How much does it cost to make documents?

 

[Norman]

I don't understand the "documentation fee". How much does it cost to make documents?

To me, that sounds like "The annual will cost $xxx and the log entry will be $yyy".

 

[us AAirways]

If if had 100's lined up to buy, I'd be sitting on an island somewhere watching the sunrise this morning! The old days of treating customers badly are gone in most places!

I've left over what I thought was a fair offer. Never had a sales person chase me down in the parking lot. Maybe not hundreds lined up, but the ones I have been in don't seem desperate for business.

 

[NoHeat]

I don't understand the "documentation fee". How much does it cost to make documents?

Or how much does it cost to not make documents.

A local Mazda dealer charged me a doc fee, and then failed to produce a title before my temporary plate expired.

 

[Jimmy cooper]

Does anyone remember L.B. Smith? a very large ford dealer, 23 ford dealerships. (, I think)He also specialized in converting B25's to executive aircraft. His home office was Harrisburg , PA.

 

[N747JB]

I want the real price.

I don't understand the "documentation fee". How much does it cost to make documents?

Doc fee is basically non commisionable gross profit.
It's different in each market, some states regulate it, some don't. It basically gives the appearance of a lower price, most customers seem to want the vehicles at cost, but don't seem to argue over the doc fees.
I'd prefer not to have them, but if I add $500.00 into the cash price as opposed to an extra fee, people would walk to the place that was "cheaper" even if they are paying a $995.00 doc fee there.

 

[denverpilot]

I've left over what I thought was a fair offer. Never had a sales person chase me down in the parking lot. Maybe not hundreds lined up, but the ones I have been in don't seem desperate for business.

http://www.zerohedge.com/news/2014-05-16/where-worlds-unsold-cars-go-die

 

[mikea]

I want the real price.

I don't understand the "documentation fee". How much does it cost to make documents?

The DOC fees "required by state law" are limited by state law but the car dealer lobby make the state raise the periodically fee like it's a mandatory dealer profit item, so they can say, "By state law. Nothing I can do."

It was $40 max, now AFAIK, it's $110.

You can include it in the price I'm paying, in other words, YOU pay it by state law.

It started out as some dealers using the fee at whatever they felt like, as an extra profit item. Then the amount of the fee varied and got higher and higher, thus the IL state law to regulate to maximum which clued in all dealers to jump on the scam.

BTW, DOC fee =/= Documentation fee. It means Dealer Optional Charge or somesuch. Ya know, "by state law."

How about: "No DOC fee required. I'll do my own documentation."

 

[Bob Noel]

Doc fee is basically non commisionable gross profit.
It's different in each market, some states regulate it, some don't. It basically gives the appearance of a lower price, most customers seem to want the vehicles at cost, but don't seem to argue over the doc fees.
I'd prefer not to have them, but if I add $500.00 into the cash price as opposed to an extra fee, people would walk to the place that was "cheaper" even if they are paying a $995.00 doc fee there.

To be blunt, when I just bought my car, I didn't pay any attention to each of the line items. This rebate, that "rebate", registration fee, dealer prep, blah blah blah, trade-in allowance, etc.

I only paid (no pun) attention to the bottomline out-the-door price.

The trade-in allowance was lower than expected, but the net price was acceptable, so I didn't quibble (and offered the car to my sister at the trade-in allowance).

 

[cowman]

I think next time I buy a new car I'm going to write down the invoice price, then ask what all their fees aside from tax are and write each one down under the invoice... then subtract all of that from the invoice and offer the remainder.... making sure the dealer knows that's exactly what I'm doing.

They still get dealer holdback so they should still be making money at that point. I figure they can either sell the car or I can leave.

 

[FastEddieB]

As a point of information...

...when the salesman tried to add the $495 Doc Fee to our accepted $26,000 offer, we refused, and were ready to walk.

He said it was required that all parties pay the same Doc Fee (by law) so he would have to charge it but would take it off the sales price, so that once added back in we were back at the $26,000 we had offered.

Seemed convoluted and suspicious, but there you have it.

This was in Georgia, BTW.

 

[Hank S]

I don't care HOW the money is divvyed up in the back room of the dealership. All I care about is how much I am paying.

Bought a used car once in a hurry. We discussed buffing out some scratches, and about the eighth piece of paper the finance person gave me said that the dealer didn't have to pay more than $100 to buff out the scratches, and sign here. I tore it in half and threw it in the trash can. "You can't do that!" Sure I can. I explained that the car was worth the agreed-upon price to me without the scratches, but that I would not buy it at any price as it sat. We ended up at the car with a diagram and marked every scratch to be repaired. When I picked it up, they were indeed gone.

What customers need to remember is that IT'S OUR MONEY! WE CAN SPEND IT WHEN, WHERE AND HOW WE WANT TO!! I don't really care what the dealership wants to require, and I don't put up with their BS.

This crap is why I despise car dealers and hate car shopping so much that I postpone it as long as possible.

One clarification: when I bought an Infiniti, the total experience was great. No pressure, no BS, nice test drive, comfortable showroom and sales people who treated me like a person. I probably helped them sell several cars to friends, neighbors and coworkers talking about the great experience. Unfortunately I moved, and the next Infiniti dealer was staffed with jack@sses, so I took my money to another dealer & brand.

Life's too short to put up with BS when I'm not being paid to do so.

 

[us AAirways]

Doc fee is basically non commisionable gross profit.
It's different in each market, some states regulate it, some don't. It basically gives the appearance of a lower price, most customers seem to want the vehicles at cost, but don't seem to argue over the doc fees.
I'd prefer not to have them, but if I add $500.00 into the cash price as opposed to an extra fee, people would walk to the place that was "cheaper" even if they are paying a $995.00 doc fee there.

Technical term for "John's Jet A fund" ??

WI sets a max of $209, but $995....YIKES! That's a lot for the same paperwork.

 

[us AAirways]

I heard to negotiate up from invoice price, not down from sticker? Doesn't it come out the same??

 

[BillTIZ]

I heard to negotiate up from invoice price, not down from sticker? Doesn't it come out the same??

Last truck I bought, I was on the dealer's lot on Sunday. They are closed, no salesmen, just roving security and "it's allowed". I picked out two I liked and noted the VIN numbers.

Monday I call the dealer number given to me by AAA buying service. Turns out to be their Internet/ fleet sales manager. He tells me he can do a better price that AAA service and emails me the two invoice prices and offers to me $1K below invoice. I check in with Mrs and we pick her color choice.

I call him back, tell him it's a deal on the Silver one, start cleaning it up, I'll be there a 3pm. I drive onto the lot at 3pm, a lot of salesmen smiles change to frowns when I ask for "Tiny". Introductions made, he calls his "lacky" and says take Mr and Mrs out to the truck and make sure it's what they want and that everything on the sticker is there. We test drove it, the floor mats were missing.


Back inside, yes that is the right truck. He hands the papers to his lacky, Invoce minus $1500, write it up. He's retired military he gets the extra discount.

No additional fees, standard offers for maintenance contracts, extra warranty etc. no thanks. In this state the tax is on the MSRP, not what you paid. Wrote the Bank Draft, called the insurance and the faxed proof of coverage.

Out the door in two hours. No haggles. And yes the truck was washed, vacuumed and the mats installed.

 

[Dean]

In Missouri taxes are paid in the county where you live and not collected by the dealer. I refuse to pay doc fees, I don't use their financing, the title app is done at the license office, so there is very little paperwork for them to complete. If they refuse to wave the doc fee, I walk and go elsewhere.
All I need to know is the out the door price.

 

[pilot_dude]

If I were to buy from a dealership (new or used) in the conventional manner, I would want the "out the door" price so I could just write the check and drive off.
As it is now, me and a friend (broker) go to the local sale and I tell him what to buy. Since he's there for other clients I give him $100 and lunch and drive off.

 

[airdale]

If I were to buy from a dealership (new or used) in the conventional manner, I would want the "out the door" price ...

Not me. I like the current system where we negotiate a price with the dealer making the assumpting that he will get the additional profit from the doc fee.

I get the price, then when the F&I guy pushes the contract across the table I take out my pen, cross off the fee(s), and write in a new total at the bottom. I then explain that when I buy a hamburger at McDonald's I pay the price on the signboard. I don't also pay a "bagging fee." I feel the same way about buying a car.

The discussion time from that point to the end varies, but the result is always the same: The guy marks down the vehicle price because he doesn't want anyone at the store to know that he caved on the doc fee.

Typical interchange:

• F&I: "You'd pass on this deal for just $200?"
• Me: "That's your decision." (Then silence. They hate silence. I can remain silent much longer than they can.)

Unlike most here, I like negotiation and think this is kind of fun. Especially because I always win. The rule, though is: If you're not prepared to leave the table, you're not negotiating. You're begging. Always remember this.

Re automatically passing on the dealer financing, be a little careful. I have had two car loans in my life. One when I was just out of graduate school/first real job and didn't know any better. The second was a few years ago when Mazda offered a $2,500 rebate for financing my RX-8 through them. I signed up, waited until the title paperwork cleared the state, then paid the loan off. Maybe two months and $300 in interest to collect the $2,500. Well worth the effort.

 

[cowman]

Invoice price should be the most you are willing to pay. If you agree to invoice, the dealer is still getting this doc fee we've been talking about, they also get a kickback from the manufacturer. If you offer invoice and a dealership doesn't take it right away, these guys are either greedy or really good. I'd just walk away at that point.

 

[airdale]

Invoice price should be the most you are willing to pay.

(caution: thread drift)The price I am willing to pay is the best price I can get among my acceptable alternative cars and sellers. That is the only number that matters. I like to know the invoice price but it is just a number. Above/below or equal to invoice, I don't care. Same story on "Blue Book" for used cars. Nice to know, but just a number.

 

[FormerHangie]

Technical term for "John's Jet A fund" ??

WI sets a max of $209, but $995....YIKES! That's a lot for the same paperwork.

From what I can tell, most Georgia dealerships charge a doc fee of $79 or so in addition to that dealer fee. It's not for any particular purpose other than for some dealers to advertise an unrealistically low price, then add the fee on at the time of sale.

 

[FormerHangie]

Invoice price should be the most you are willing to pay. If you agree to invoice, the dealer is still getting this doc fee we've been talking about, they also get a kickback from the manufacturer. If you offer invoice and a dealership doesn't take it right away, these guys are either greedy or really good. I'd just walk away at that point.

I wouldn't say that a $500 dealer fee is enough margin to operate a business. If the average sales price is $30,000 that's less than two percent.

There may be some manufacturer to dealer incentives as well, but for some makes there aren't.

 

[FormerHangie]

To answer John's original question, I'd like to see what the dealer is charging me, exclusive of any state fees. I have in front of me a buyers order from my most recent purchase It has all the following add ons in addition to sales tax:
Etch Guard $584
Dealer Admin Charge: $699
Title and Tag Fee: $63
Lemon Law fee: $3

AFAIK, the dealer spent $18 to title the car in my name. What I'd like to see in an advertised price would have everything included other than title, lemon law, and taxes. If I were selling for a dealer, I'd rather not have to pile all those fees onto a customer when he asks about an advertised vehicle.

In the long run I don't really care about dealer advertised prices, I assume that particular car is one I don't want and couldn't get at that price. What I do is to go to Edmunds to see approximately what I should be paying and what my trade is worth, then make an appointment with my most local dealer to try to make a deal on it. I'm not trying to get the absolute lowest price anyway, dealers gotta eat, and I buy a car so seldom that a few hundred dollars isn't that important.

 

[N747JB]

Yes, the state has come up with a new system for tagging and titling that has to go through a "preferred" vendor.

From what I can tell, most Georgia dealerships charge a doc fee of $79 or so in addition to that dealer fee. It's not for any particular purpose other than for some dealers to advertise an unrealistically low price, then add the fee on at the time of sale.

 

[FormerHangie]

Yes, the state has come up with a new system for tagging and titling that has to go through a "preferred" vendor.

Gee, I wonder what politician this preferred vendor is affiliated with.

 

[N747JB]

Gee, I wonder what politician this preferred vendor is affiliated with.

They are all the same! It's funny, the cost went up for the electronic tag and title services to the vendor, but the cost of the state fees stayed them same even though they no longer do the work.

 

[Ghery]

Thanks for the responses, what I am looking for is advertised Internet price compared to bottom line prices. We have a $499.00 doc fee, between average and the low side of average for the Atlanta market.
Assuming the same bottom line price, would you be more likely to shop where they have a price $500.00 higher and NO FEES or one that is $500.00 lower and adds $500.00 in fees?

Doc fees? $499 to run the paperwork to the nearest license vendor (or mail it to the state)? No way would I pay that. That's what that fee is all about. It doesn't cover the actual fees (which I understand and am willing to pay).

I hate buying cars. The circus of dealing with car salesmen is something I can do without. One more reason we typically drive vehicles until they are no longer economical to keep on the road. The only recent exception was buying the Ford Escape last year while the Jeep Wrangler was still serviceable. My wife just can't get into the Jeep easily. The Escape is much better. But, I still own the Jeep. KBB said the trade-in value was around $4000 and the Ford dealer offered $800. No way were they getting it for that. Looking back, I should have walked and told Ford why. The salesman got offended when I told him the Edmunds price for the car. "How many cars has Edmunds built?" I should have asked that kid how many he had built. Oh well... I financed all but the taxes. Why not? Ford was offering 0% interest. I'll play with their money.

If the Escape lasts like the last Ford product I bought (1988 1/2 Escort) I'll have it quite a while. Of course, it's going in Wednesday for a recall and I saw on-line there are a couple more to look forward to. We shall see...

 

[Mike5250]

I have purchased my last 3 cars from the same dealer, which a friend works at. All 3 times I spent less than an hr at the dealership, and they knew I only wanted to hear about the OTD price.

 

[ja_user]

Out the door in two hours. No haggles. And yes the truck was washed, vacuumed and the mats installed.

That is too long,
1st new car I bought new lasted that long, I called ahead of time and a few phone calls later we had a price agreed upon. STill took 2 hours in there.

2nd New car was all via phone, 1 hour max in the dealership.

I bought a used car 2 weeks ago, I dropped by and look at it and talked about the price. 1 Phone call later that day and we had a price, I told him to hold it.
Showed up at 4:45 and drove it away with paperwork down at 5:15pm. No Document fee's, no Paperwork other than title/transfer, Bill Of Sale, and required state Warranty on used car. And no charge for that crap either. Cash and carry

 

[FormerHangie]

Doc fees? $499 to run the paperwork to the nearest license vendor (or mail it to the state)? No way would I pay that. That's what that fee is all about. It doesn't cover the actual fees (which I understand and am willing to pay).

I hate buying cars. The circus of dealing with car salesmen is something I can do without. One more reason we typically drive vehicles until they are no longer economical to keep on the road. The only recent exception was buying the Ford Escape last year while the Jeep Wrangler was still serviceable. My wife just can't get into the Jeep easily. The Escape is much better. But, I still own the Jeep. KBB said the trade-in value was around $4000 and the Ford dealer offered $800. No way were they getting it for that. Looking back, I should have walked and told Ford why. The salesman got offended when I told him the Edmunds price for the car. "How many cars has Edmunds built?" I should have asked that kid how many he had built. Oh well... I financed all but the taxes. Why not? Ford was offering 0% interest. I'll play with their money.

If the Escape lasts like the last Ford product I bought (1988 1/2 Escort) I'll have it quite a while. Of course, it's going in Wednesday for a recall and I saw on-line there are a couple more to look forward to. We shall see...

The dealer will not discount the fees, if they do, they're likely to get sued by a group of people who had paid them when they bought. What you do instead is to negotiate a bigger discount from MSRP, figuring that they're going to charge them. I suspect that the whole point of this is to be able to advertise lower prices, either that or to make the trade in look more valuable. John can fill us in on what the rationale.

Depending on how old your Jeep is, you may be much better off selling it on Craigslist. If that dealer doesn't have a market for that car, all he's going to offer you is an auction price. When I bought my car, the dealer offered me $1000, and I sold it on Cragslist in one day for $2700.

 

[poadeleted21]

Thanks for the responses, what I am looking for is advertised Internet price compared to bottom line prices. We have a $499.00 doc fee, between average and the low side of average for the Atlanta market.
Assuming the same bottom line price, would you be more likely to shop where they have a price $500.00 higher and NO FEES or one that is $500.00 lower and adds $500.00 in fees?

When I see "doc fee" I don't even consider purchasing from that organization. It screams of shenanigans and I don't play those games.

 

[FastEddieB]

The dealer will not discount the fees, if they do, they're likely to get sued by a group of people who had paid them when they bought. What you do instead is to negotiate a bigger discount from MSRP, figuring that they're going to charge them.

That makes more sense than being "legally required to charge everyone the same Doc Fee".

And when we made it clear we would walk, the GA Chevy dealer did drop the sales price enough so as to include the Doc Fee in our $26k offer.

As an aside, CarFax had shown the 2011 Flex we bought had had right front damage, so the price we paid was several thousand less than Blue Book. We had the sales contract made conditional upon inspection by a third party body shop. Our local body shop confirmed the repair had been done properly, so we're happy with the savings, and the car.

 

[Bill]

I would prefer to see the total out the door price, but I'd rather the standard be kept if all cars were to be advertised pre tax and fee.

Bingo, give me your out the door price including the three T's. I don't care what all adds up to that number (doc fees, etc.), I just want the bottom line out the door all up price.

That said, I buy new Fords, the FiL retired from Ford and we buy on the A-Plan. Had to beat, and I've had excellent service from the vehicles.

 

[denverpilot]

I heard to negotiate up from invoice price, not down from sticker? Doesn't it come out the same??

You think you really have the true invoice price the dealer really paid, feel free. That information leaking out is not something most dealers like nor does the manufacturer.

You might have a piece of paper that says it's "dealer invoice". Keep in mind the mind games that can be played with that phrase. A "dealer invoice" means the dealer wrote up something that looks like an invoice. Ha.

Try finding a "manufacturers invoice". You won't. a) Because most dealers don't buy the cars. They pay to stock them. A very different thing. And b) Because the whole "dealer invoice" thing is a game.

 

[JoseCuervo]

If all your competitors are advertising the low-ball price, then you have to match your pricing to be apples to apples. Definitely add the "plus $499 doc fee and taxes/registrations" fine print, but the bigger number needs to be what the competition is doing.

Although all one cares about is the "out the door price", if you can negotiate for the Base Price, then you can also negotiate on each add-on, except for taxes/registration type of stuff.

 

[JoseCuervo]

Invoice price should be the most you are willing to pay. If you agree to invoice, the dealer is still getting this doc fee we've been talking about, they also get a kickback from the manufacturer. If you offer invoice and a dealership doesn't take it right away, these guys are either greedy or really good. I'd just walk away at that point.

I love hearing "superior negotiators" knowing they only allow "holdback" and won't allow the dealers any mark-up. Invoice is a work of fiction.

Pro tip: If a dealer accepts the offer, the dealer was satisfied. Dealers don't stay in business only selling to "the other guy".