Monday, July 28, 2014

I DARE Car Dealers to Answer Just One Question about their Dealer Fee:

Why don’t you include the profit you make on your dealer fee in the price of the car you quote to your customer? 

If you will answer this question truthfully then I pledge never to raise the issue of the dealer fee again.

The reason that I do hear from car dealers and the Florida Auto Dealers Association, FADA, as to why most car dealers charge a dealer fee is that it’s an “economic necessity”. Dealer margins are so low, the economy is so bad, and the car buyers are so armed with information on dealers’ costs and profit margins via the Internet that dealers need the extra profit they make from their dealer fees. OK, I’ll give you the benefit of the doubt and stipulate that this is a fact. I won’t even argue that I don’t charge a dealer fee and have been profitable for many years and even thrived through the Great Recession years.

Don’t add the dealer fee to the price if the car after the customer commits to buy at a lower price. Don’t hide the amount of your dealer fee in the fine print. Don’t tell the customer that the price is “plus tax, tag, and ‘fees’” fooling her into believing “fees” are state, federal, or local taxes. Don’t tell the customer that “all dealers charge a dealer fee” which you know to be untrue. Don’t tell her that the law requires that you must charge her the dealer fee because you charge others, which you also know to be untrue. Don’t tell the customer that the dealer fee is not a profit but expenses that you must recoup like doc fees, preparing the car for delivery, and administrative costs. When you went to school you should have learned in Economics 101 that the definition of profit is “the difference between the selling price of a cost or service and its total costs”. Besides, you don’t even pay to prepare your new cars for delivery because you are reimbursed by the manufacturer and you are not allowed by law to charge doc fees.

When I ask car dealers or FADA officials this question they always give me the same answer…Hamma, Hamma, Hamma, just like Ralph Kramden of the Honeymooners. You know what I mean…”the deer caught in the headlights” or the politician on “Meet the Press” when the moderator shows the video of something the politician said on camera two weeks ago that directly contradicts something he just said.

OK car dealers and FADA, if I’m wrong about this, here’s your chance to shut me up about the dealer fee forever. All you have to do is give me a truthful answer to this question. Why don’t you include the profit you make on your dealer fee in the price of the car you quote to your customers?

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