Airlines cleared $3.5 billion in baggage and seat fees in 2012. Fees are practically a hidden economy across all industries. And buying a car is no different.
But there are ways to be tough with a new or used car dealer in the negotiations. And going after some of those pesky fees on the invoice is one of them.
Delivery Charge: Really? The dealer expects us to pay a line item charge to have the car delivered from the factory to his dealership? That seems like cost of doing business to us. Still, we have long paid this fee in the form of a “destination charge.” Look to see if there is a “destination” charge, as well as a delivery charge. If there is, tell the dealer you aren’t paying the “delivery charge,” because it’s nonsense. The “Destination Charge” is an accepted fee.
Advertising Charge: Come again? You want us to pay a line-item charge for what it cost you to advertise the car? This nonsense fee can be hundreds of dollars. In how many languages can we say “No way.” Be tough, stand your ground and tell the sales-person that the ad fee is his problem.
Documentation fee: Dealers often play hard ball on this fee, which can be as high as $400.00, and is said to cover their cost of handling paperwork like registering the car, getting your credit score, etc. Make them break it down for you line by line, and be willing to pay only what the dealer really spent out of pocket.
Dealer Prep: Forget it. This is a fee that dealers like to charge to cover putting oil and fluids in the car, washing it, etc. For us, this the cost of doing business and handling the merchandise you are selling.
Rust, Paint and Fabric Protection: These are high-profit add-ons for the dealer, but they don’t do much for your car, because car companies already put this stuff on your car. That’s especially true with fabric protection. If you and your kids are slobs, then go out and buy a can of ScotchGuard and dose your upholstery once a year. As for paint protection, the product the dealer is using won’t really help protect your paint for very long. No worries, because paint has never been better on cars and trucks. And the kinds of things that will bedevil you won’t be solved with the dealer paint treatment–that’s loose shopping carts running into your car, or people opening their door and whacking the side of your car in a parking lot and scratching the paint.
Extendend Warranties: These can cost between $800 and up over $1,000 and purport to cover your car from mis-haps after the basic warranty is over. There are two things we don’t like about extended warranties: they are often sold by fly-by-night companies through the dealer, and there is a lot they don’t cover in the small-print. We say “pass.” If warranty protection is important to you, though, shop for a car at a company where the basic bumper-to-bumper warranty, as well as the power-train warranty, are long–longer than 36 months/36,000 miles.
Is it difficult to negotiate these? No. Will you get the sales-person to waive all of them? Probably not. Be prepared for the basic ploy from a car sales-person: to make you feel guilty about not paying for extended warranties or paint protection. “You are making a big financial commitment, and so it makes sense to protect it.”
Here is your game-plan going into the dealership, or if you are negotiating online.
1. Never negotiate around a monthly payment. Get the best price for your car, and all the rebates and incentives available, and then do your own calculations on how long a term you want for your loan.
2. When the price is agreed upon, ask the dealer to present you with the invoice. At this point, review all the fees, and tell the sales-person that you aren’t going to pay all these fees, and start going over them one by one. Be prepared and query them on each one. Insist on some of these being waived (like the delivery charge if it’s on top of a destination charge), and cutting down other fees like the preparation charge. The advertising fee is non negotiable, for you, so don’t pay it under any circumstances.
3. If the sales-person gets tough on these fees, and brings in a sales manager or some other personnel to back him up, stand your ground. Car dealers have a bagful of approaches and time-honored ploys to get you to pay these fees. Hang tough.
4. A confident and knowledgeable car buyer is the toughest customer for a dealer to negotiate with, so prepare. Take a notebook of information and reminders about how you are going to negotiate the transaction. And try to do as much of your negotiation online or over the phone, so you are in the comfort of your own home and not under the pressure of being on the other side of the desk from the sales-person.
5. If you aren’t happy, walk away and try another dealer. It’s your money, and your choice. The dealer has to win your business.
