If you are a reader of my columns, you know all about the “dealer fee” scam perpetrated on car buyers in Florida and other states where it is still legal. This fee ranges from $495 to $995 and even higher. It is profit to the dealer but is printed on the buyer’s order, disguised as a “fee” meant to be confused with legitimate state, local, and federal fees, like sales tax and license fees.
Virtually every dealer in Florida adds a dealer fee to the price he quotes you on the car. In fact, when questioned, many dealers’ justification is that “all dealers in Florida charge a dealer fee”. Strange as it may seem, Florida law prohibits a dealer from removing the dealer fee from the price he gives a customer. If he charges one person a dealer fee, he must charge all people. This is also the rationale you might hear if you object which, is “Florida law will not allow me to remove the fee”. The way to counter this objection, when haggling about the dealer fee, is to tell the salesman to reduce the overall price by the amount of the dealer fee and leave the dealer fee alone.
The only control placed on dealer fees by Florida law is for advertised prices. This law says that an advertised price must include the dealer fee. Dealers get around this by advertising just one vehicle at an advertised price with “many more at similar savings”. If the one car that is advertised is already sold, the dealer can sell you one just like it and add back the dealer fee.
Unfortunately, I recently discovered that there is a loophole to this sole law to protect the car buyer from dealer fees. The loophole is that lease payments and prices advertised by multiple dealers in the same ad do not have to include the dealer fee. This means that if a manufacturer advertises a price on a new car listing several dealers, the dealer fee can be excluded. When I inquired about this, I was told that this is to permit manufacturers and distributors to advertise the same car priced from multiple dealerships. I was told that they cannot include the dealer fee because each dealer fee is usually different. That doesn’t sound like a very good excuse to me. Ads including multiple dealerships usually include the names, phone numbers, addresses, and Web site URL’s of each dealer. Why not list each dealer’s “dealer fee”? You know the answer as well as I…they don’t want you to know there is a dealer fee, much less the amount of the dealer fee.
The reason for the law requiring that advertised prices include the dealer fee is very clear. It is to prevent the consumer from being fooled into coming in on a low price and then charged a higher one. If that principle applies to one dealer’s ad, why doesn’t it apply to multiple dealers advertising in one ad? To comply with the same law applying to one dealer, all multiple dealer ads would have to say is “price plus tax, tag, and dealer fee” and beside each dealer’s name list his particular dealer fee. This would also encourage dealers to lower their dealer fees and even eliminate them entirely.
Because I don’t charge a dealer fee, when my dealership is included in an ad with seven other South Florida dealerships, I have the lowest price but the reader of the ad cannot know that. The ad says “plus tax, tag, and dealer fees” in the fine print at the bottom of the ad, but does not disclose the amount of the dealer fees for each dealer. The uninformed prospective car buyer can pay up to $995 more for that advertised car than he would pay at my dealership because the dealer fee amounts are not disclosed. Does that sound right to you?
Friday, April 06, 2007
123 comments:
Earl Stewart On Cars welcomes comments from everyone - supporters and critics alike. We'd like to keep the language and content "PG Rated" so please refrain from vulgarity and inappropriate language. We will delete any comment that violates these guidelines. Oh yeah - one more thing: no commercials! Other than that, comment-away!
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I am the General Manager of a dealership that you happen to compete with. You are misleading the public with the information that you are putting out there. There is nothing wrong with charging the dealer fee to the customer. Our profit margins on new cars have gotten smaller and smaller, year by year. The dealer fee is one of the only ways we are able to stay in business and make a decent profit. You are confusing the public because the only thing that really matters is the bottom line.
ReplyDeleteHey, GM of a competitor.... Send your kids to college on your own dime, not on the price paid by hard working people.... Dealer Fee's ARE scams period, just like advertising fees added to the cost, or show room costs ... get the point. If all dealers were honest and weren't trying to scam, more people would be less hesitant about buying cars. you give dealers a bad name.
DeleteAmen to that, Anonymous.
DeleteGuys like this dealership General Manager exist in "field of reality distortion" such that the believe their own nonsense.
Generally, I disliking dealers a whole lot. A more dishonest bunch I can't think of. But on this issue, if the fee is clearly stated BEFORE price negotiations then it's not an issue. I'd haggle my best price and then insist they lower it by the dealer fee. Or I'd walk. And I would walk if they balked.
DeleteIt is not a "decent" profit when you add a hidden fee back to the cost. When I bought my first car in Florida, I was stunned by the dealer fee. It is one of the biggest scams I've ever seen, and he had the gall to say "we're entitled to a fair profit" -- I wondered about the unfair profits. Who says you are entitled to that, too?
DeleteThe same dealer bait & switched me from a price listed for last year's models which was not available from any dealer in the state. Any other state, it would be illegal to advertise a car that is not available.
You find all of this out hours after you've been testing cars. It is disgraceful!
That is your option. As a consumer I would never pay this. This fee should
Deletebe added to the actual sticker on the window so that everyone see this amount shown.
very easy fix. I always tell them to take off dealer fee and doc fee cost to be no more then $100. if they cant do it...walk out when paper work is about to be signed..if the still refuse, try another dealer. Have had 2 dealers meet my pricing to close sale. And I have left Fl. to GA. to buy car. and yes it was worth saving $1673.00
DeleteLet me try to summarize: "The only way I can make a decent profit is by fooling people to come into my dealership with a fake price!"
DeleteGreat argument . . . Many states have caps on dealer fees and caps for most states are under $100. Florida's average dealer fee is over $600. The only reason for a dealer fee is to advertise a price for a vehicle that's lower than what you're charging. If that's not intentionally deceptive, I don't know why you're doing it.
We're not saying you can't make a profit. We're not saying you can't charge whatever price you need to charge to make a fair profit. We're saying you can't tell us one price in an ad, get us in the door, and then change the price. Doesn't sound so unreasonable to me.
What's misleading is the addition of the fee at the end of the negotiation presenting it as routine. Either build this missing margin into your price or get into another business.
DeleteThe problem is the deceptive nature in that the law indicates price to include dealer fees but does not. The websites generally have a disclaimer that perhaps allow them to get around the law by including the dealer fee in with tax, tag, and registrations fees. However these fees are generally accepted and known to most consumers but the dealer is not until the bill of sale is written up.
DeleteI don't know any dealers that not living high on the hog !! Dealer fees are just another profit margin.
DeleteHey GM...go to Walmart, pick your items and then when you get to the register pay an additional $10 for "Store Fee", because their profit has been smaller and smaller.
DeleteWhen your fees are not included in the advertised price then you are misrepresenting the true cost of the vehicle, which is a deceptive business practice.
DeleteI disagree My dad has owned a dealership in New York for over 20 years and has made a very good living based on one principal - Honesty. The first time I went to a dealership in Florida I found a car I liked and the price was fair. I sat down to fill out the paperwork and noticed an extra $795. I asked what that was about and the guy told me "o thats just the dealer fee". To me it seemed sneeky and underhanded so I walked out. I found a different dealer that didnt charge this bogus fee and thats where my money went. I think by chrging a dealer fee you are continuing to prove the stigma that all car dealers are dishonest. Try changing your advertising stradegy to being an honest dealer that doesnt charge sneeky fees and I beat your sales will improve
ReplyDeleteDear dealer's son,
ReplyDeleteThanks for your support. You and your Dad will be glad to know that the Florida Senate investigated the "dealer fee" that most Florida dealers are charging and sent a recommendation to the legislature that a law be considered capping or banning the fee.
I met just last Saturday with Senator Jeff Atwater, soon to be the President of the Florida Senate, to discuss this legislation. I hope to have him appear on my radio talk show on Saturday, February 9. You can listen to it on Seaview AM 960, WSVU.
Thank you for that Mr. Stewart. I am from up north. Minnesota to be exact and I have never see one dealership there that charge a dealership fee. I got here and 99% of the dealerships here charge a dealership fee between $599 and $999 and that's added to the MSPR of the car. I can tell you that I've walked away from many dealerships in the Central Florida area many times. So it's refreshing to here that you're doing something about it.
DeleteHi Earl,
ReplyDeleteMy name is David Menten. I own Sawgrass Ford in Sunrise Florida. We have never charged a dealer fee. My advertising is centered around that fact. It has helped me to be one of the largest Ford dealers in the United States.We sold more expeditions last year than anyone in the country. Our honest approach to car sales is the reason why. I think the market place should be the judge of dealer fees. I don't think it is the governments job to legislate dealer profit. If consumers don't like dealer fees, let them buy from someone like you or me.
Good selling,
David
Unfortunately, it's hard for us to judge as the entire reason for dealer fees is to deceive potential buyers to get them in the door. Once some buyers are at the table to discuss price, sadly, many people buy the car anyway. This needs to be changed by law.
DeleteDear David,
ReplyDeleteThanks very much for your posting to my blog article and how refreshing to have a comment from a car dealer that is not "anonymous"!
I totally agree with you that it is not up to government to legislate dealers' profits and that it should be up to the market place.
But I do think it is a function of our government to protect consumers against deception by businesses which takes away a consumer's ability to make a rational, intelligent choice.
I think we both agree that the dealer fee deprives the marketplace from accurately determining the price of the dealers' products. If dealers wanted to allow car buyers to make a fair choice with respect to the price of their cars, they would simply include the dealer fee in their quoted and advertised prices, as we do.
Good selling to you David and let's hope that what we are doing becomes popular with other fair minded dealers.
If by "bottom line" you mean the final price after all taxes and fees, that as a misconception. The only thing that matters is the subtotal price, after dealer fees. That subtotal price is what should be negotiated. Title and tag are non-negotiable, as well as the sales tax percentage, so why try to negotiate those numbers?
ReplyDeleteI used to work at a very large dealership that charged triple what the tag transfer actually cost to cover processing the paperwork. Don't be so certain there aren't profits hidden where you don't expect them.
DeleteThis is my experience with a Florida dealership right now. I'm being charged $460 for the Florida dealership to process registration and tags in Texas for me. Cost in Texas: $83.
DeleteThey're trying to do it on my tax as well: sales and use tax in Texas is a tax-exclusive 6.25% levied on the negotiated sales price of the car. Texas is very specific that fees are excluded. They don't care. They're trying to use a tax-inclusive 6.25% on the negotiated price PLUS fees.
Add to that the $800 dealer fee and the great price I thought I was getting is just mediocre.
Here is a tip, always keep a spare set of keys in your pocket. Do not hand them over until the final paperwork is signed.
ReplyDeleteIts misdirection plan and simple. I also found your sales tactics a little pushy for my taste. I prefer all the fees be listed as opposed to just thrown into the price of the car. I want to see your cut! With the internet and a little research we know what you paid for the car and what the mark up is. Try the shell game on another sucker! No one is buying this three legged horse.
ReplyDeleteS.P. Lake Worth
I am in the process of ourchasing a RAV4. One dealer charges $599 for dealer fee and the other $699. It is outrageous. It is additional profit to the dealer. Any suggestions of what to do with this"Bogus fee"
ReplyDeleteI recently purchased a car at west kendall toyota in Miami and after I signed the papers I realized that they charged me $895 dealer fee when the original fee was $650
ReplyDeleteread very careful what you sign those guys in the dealership are a bunch of crooks
I walked away from Hyundai dealer yesterday cause of these $600 fee's and they wanted to charge $250 for tag transfer. Nuts.. I am going to out of FL or buy used. These guys are nuts with these BS Fees.. Shame on you Dealers trying rip off honest hardworking people.
ReplyDeleteI walked away from every Honda Dealerships in the Central Florida just this 3 weeks. I will have to go out of state to buy my car. I was disgusted with the dealer fee at the end of the negotiation. I don't know how anyone would agree to these bogus fees.
DeleteHi Earl
ReplyDeleteI went yesterday to Holler Classic Dealer in Altamonte Springs, I was ready to buy a car and the sales person Randy was nice, he show me a power point presentation (make feel like I was buying a Time Share)explaining why they couldn't go lower in the price and told me they were giving me the lowest price in the car, i did my homework and it was over $300 more but I was getting a warranty and service was good. No one told me about the dealer fees! When I was ready to sign the contract I saw a charge of $599.00 I ask Randy and he said OH DON'T WORRY THAT IS JUST THE DEALER FEE! People work very hard, and this is an insult and a scam! I walk away from them and they didn't even care, not even an aproach to said IM SORRY I should it told you there was a fee!!!
My dealership only charges $295.00 for the dealer fee. It is pre-printed on our purchase sheet. We explain to the customer what the dealer fee is. We still get people saying that they are not willing to pay for it. We are not hiding the fee in the price. Either way, people are going to complain.
ReplyDeleteYou charge a dealer fee and you have the nerve to wonder why people complain? Why don't you just put it in the total price of the car then you don't have to worry about people complaining. Bogus fee is still a bogus fee even if you display it in super sized billboard in from of your dealership.
DeleteHow do I say this without vulgarity? Dealer Fee?? What kind of idiot pays a dealer fee?? The next thing you know Wal Mart, CVS, etc will be charging a Retailer fee! Your grocery are $21.95 plus a $3 retailer fee.
ReplyDeleteNo but you can't negotiate the price of groceries and pay for the invoice on groceries. Your completely leaving out that part which is not fair. Cars should be this way too, a fair even leveled profit that no one can negotiate on and it is what it is just like at a grocery store. But trust me you wouldn't like that because people are basically stealing new cars with how little profit there is in them.
DeleteNot exactly true. Sounds like you likely work in sales. Ask the sales manager about holdback on new cars and bruise on used cars. Ask F&I about bumping the interest rate or what the profit margin is on glass etching or an aftermarket powertrain warranty. Dealers don't just scam the customers. They're hiding the true profit from their sales team too.
DeleteYou're Okay with Wal-Mart making 400% to +1000% profit on the clothes you buy but spend days complaining online about auto dealers making 1% to 4% profit on a vehicle. I guess somebody has to be the bad guy.
DeleteWal-Mart has the lowest margins and therefore the lowest prices of any retailer on the Planet! Not only are their margins lower than car dealers', but they don't charge a Dealer Fee. 😊
DeleteDealers pay 45% of BB at auctions, on top of Blue Book now being completely off and just a tool for dealers. Edmunds actually tracks trends and is much lowerer in dealer price comparison, and allows other then Excellent. Every dealer now acts like every car on there lot is "Excellent" ....less then 3% of cars are excellent.
ReplyDeleteThere is plenty of Profit with out charging Dealer Fees. Autoway Charges $799, can you believe that?
All I can say is wow... Try buying in VA if fees upset you. VA state laws cap processing fees at $250.00, however, it also requires the dealer to charge a processing fee.
ReplyDeleteI tried to chalk up processing up to admin fees to help with overhead costs. It doesn't add up though. Some dealer fees in FL could pay for 30+ hours of office labor, and that is guessing that they pay their staff generously...
Working on Aircraft by profession, I can understand a customer paying for paperwork. It is required, and as such, part of the labor expense. With that in mind, if an aircraft repair facility can process an aircraft in less than 3 hours,(someone dragging their feet) at 85 dollars an hour, (accounting for the paper changing hands and departments as needed) it totals a whopping 255 dollars per job. Can a car dealer process a car in 3 hours? If your dealership cannot, you may need to hire a new staff.
I agree with VA, it is fair to all. It allows the dealer to charge a penny, or two hundred and fifty dollars. Giving them and the consumer options on a level field.
I do not agree with the competition's statement that margins are tight and it is just about the bottom line. Dealers grow by volume. No-dealer advertises "the best bottom line in the tri-state area". I agree that relying on fees as a source of profit hurts the dealership in every way. More selection will net more customers, and the only dealers that can do that rely on volume. More sales, more cars, ect... Small lots will have more visits if the selection is constantly changing. Selling by volume ushers that change.
Read it and tell yourself I'm just some uneducated consumer, "what does he know anyway". It will comfort you while waiting FOR your next customer, instead of waiting on them.
Why must these dealers be such scumbags?
ReplyDeleteNow on top of a Dealer fee there is this Regional Advertising fee which is now added onto then price, $995.00 at Wallace Hyundai in Stuart. So now I must also negotiate. So it is $595 for the Dealer fee and $995. I thought the Advertiseing fee was supposed to be in the invoice, but the invoice has no price itemizations. So now they got added pinstriping which I can decline but these pushes a 15K car up to 18,600 before taxes and tag and transfer fees. I hate to go out of the Stuart area but these dealers simply unreasonable and dishonest.
SCUMBAG aka SCORPION
ReplyDeleteIn answer to "Why must these dealers be such scumbags?"..."Because it's their nature". I refer you to Aesop's parable (copied and pasted below) which tells a story demonstrating why true changes of character rarely happen.
Thanks for bringing to my attention the $995 "Regional Advertising Fee" being charged by Wallace Hyundai in Stuart. True advertising assessed by the manufacturer or distributor are already included in the invoice and should not be added again to the price of the car.
With that said, I know Bill Wallace and he is an honest man. However, I fault him for not being aware of deceptive practices like this occurring at one of his many dealerships. Hopefully this blog dialog will be called to his attention.
The Scorpion and the Frog
A scorpion and a frog meet on the bank of a stream and the
scorpion asks the frog to carry him across on its back. The
frog asks, "How do I know you won't sting me?" The scorpion
says, "Because if I do, I will die too."
The frog is satisfied, and they set out, but in midstream,
the scorpion stings the frog. The frog feels the onset of
paralysis and starts to sink, knowing they both will drown,
but has just enough time to gasp "Why?"
Replies the scorpion: "Its my nature..."
There really is no practical reason for the fee. It exists just to make a negotiated price look better than it really is and to confuse people who are comparing competitor prices.
ReplyDeleteThe money doesn't get allocated any differently just because a fee is written into a contract and that's why it's dishonest. Unfortunately this isn't where dishonesty ends at a lot of car dealerships anyway.
I congratulate you on summarizing so accurately and succinctly the "evilness" of the Dealer Fee. It's too bad none of Florida's legislators will acknowledge this and do something to protect the car buyers of Florida.
ReplyDeleteI`m 66 years old and have bought (17) New Vehicles in my Lifetime as well as several late model Used Cars. Back in the late 70`s and 80`s living in Massachusetts, most New Car Dealers added on anywhere from $100 to $250 extra dollars to the purchase price of the Vehicle calling it (then) Dealer Preparation Fee. The "buyer" was lead to believe that this "fee" was to have the selling Dealer wash, wax, make any necessary adjustments needed that the manufacturer failed to do at point of assembly. Oddly enough, the MSRP sticker on the vehicles window clearly stated that the Price listed (included) all necessary Dealer Preparation already! Needless to say, the Car got the "wash job" and the purchaser got the "hose job". I guess there was something for all concerned. And those fee`s I mentioned earlier I might add, were in "pre-inflation Dollars. Today, most New Car Dealerships have pre-printed on the Purchase Agreement Dealer Fee`s usually from $499 to $699 for essentially nothing other then adding additional mark up profit that they (claim) cannot be eliminated due to the "Law" making sure there is no discrimination and that (all) Buyer`s get equally "Sodomized". Mr Stewart is correct, the only way to avoid this extra cost is by haggling that "fee" off the negotiated price by either discounting the vehicle in the same amount or offering the same as additional Trade -In allowance. Otherwise, simply walk! For those reasons, I`ve lately become a Ford buyer because using Ford`s X Plan as a Ford Shareholder, I can order or purchase any Ford vehicle at Dealer Invoice and a small Administration Fee allowed by Ford limited to $125, period! The only hitch is the Trade In value and they will usually match CarMax which gives full Kelly Blue Book trade in values. Like the old saying goes, Buyer Beware!
ReplyDeleteWent to a Lexus dealership in New York to purchase a pre-owned car. Fees included $995. in dealership fees plus all other fees (DMV)etc. Is this really legal for them to charge this fee?
ReplyDeleteIn New York, the legal limit on a dealer fee is $45. They call it a doc fee, but it's the same thing...profit to the dealer. It sounds like you are talking about the total of all fees including sales tax, 8.8% in NY, and your tag registration fee which would be about $75. Unless this Lexus dealer did something illegal (which is possible) it sounds like the biggest fee you paid was sales tax...8.8% is very high but it is legal. If you will fax me copies of your purchase papers (fax # 561 658-0746) I will be happy to examine them and let you know.
ReplyDeleteHi Earl, I stumbled onto this column/blog excellent info, anyway I was doing research for new hyundai elantra limited, I was looking to buy.My employer has a pretty good auto purchase program and my price is slightly lower than on true car, kelly blue book, and also edmunds. the price the dealer came back was about the same but I see the 695 dealer fee added, what are my odds or bargaining chips to get that removed. I was going to throw in my 1998 nissan altima which unfortunately was on its last legs and barely runs. any suggestions would be greatly appreciated.
ReplyDeleteThanks, Neal, for your posting.
ReplyDeleteYou said that your employer's price is lower than TrueCar.com which surprises me. TrueCar's price requires that all fees except government fees be included in the price. The $695 dealer fee must be included, so is that still lower than your employer's price? Do you mind me asking the name of your employer? I ask because many companies including AmEx, Consumer Reports, and GEICO use TrueCar.com prices.
I would report the dealer to TrueCar if he insisted on adding his $695 dealer fee. TrueCar would cancel him as a TrueCar dealer if he refused to honor his contract.
If you're employer's price is lower than TrueCar while still accounting for the dealer fee, you're still getting a good price. You can try telling the dealer to "leave on the dealer fee but reduce car price by $695" if he wants to keep your business.
Another idea is to expand your TrueCar quotes by using zip codes over a wider area. You can get as many TrueCar prices as you want.
Good luck
I am not sure about TrueCars.com. Doing my research and car buying process, I find that TrueCar's value are actually more than KBB.com.Kbb will also show the invoice price. Doing my research I was chatting with a TrueCar rep..online and I was told that Truecar set it's only price and that they are affiliated with many dealerships so they maybe a conflict of interest.
DeleteDear Earl, First of all thank you for your quick response and excellent information. Yes I do work for Amex so their auto purchase program looks to be very competitive. In fact the Amex rate for the 2012 Elantra Limited is 20,700 100.00 less than the True Car price. The True car price as well as Amex covers the advertising fees of 212 and 760 for the destination fees, but apparently does not cover the dealer fee which is 695.00 I also called Amex purchase program and they stated the dealer fee is not included and there is no way around it. So it looks like the Amex price might be the best deal and of course I will take your advise and see if they can take the 695.00 off the base price and go from there.
ReplyDeleteThanks, Neal.
ReplyDeleteI should have mentioned that TrueCar.com has "two tier" pricing. The lower price goes to their "partner programs" like AmEx and Consumer Reports". Dealers are reqired to quote a lower price for partner programs than they post on the web for www.TrueCar.com. The prices are close as you found out.
I'm surprised and disappointed that TrueCar told you there is "nothing the can do" about this dealer's $695 dealer fee. TrueCar's whole niche is supposed to be bringing the lowest market price with integrity to the consumer. How is that possible if they allow their charter dealers to spring a surprise dealer fee on the car buyer in addition to the TrueCar price? I intend to investigate this with TrueCar and I suggest that you raise this issue with American Express. They have more clout than both of us.
Would you mind me using your name and the name of the dealer with TrueCar? If not, please email me at earl@estoyota.com.
Thanks,
Earl,
ReplyDeleteI am curious, is the dealer required to tell you what their fee is if you ask?
Thanks,
Terry
This comment has been removed by the author.
ReplyDeleteThis comment has been removed by the author.
ReplyDeleteTerry,
ReplyDeleteIf you mean by "required" that the law says so, then the answer to your question is "yes". But practically speaking there is no enforcement of this law. In most cases you don't learn of the dealer fee until you see it on the buyer's order printed out by the computer in the business office. In many cases, you don't see it then but only when you get home. And some buyers never know that the dealer fee is just profit added to the price after you've been quoted.
PART ONE-Hi. I've been in car sales for 3 years now and at first (I am an eagle scout with morals and ethics strongly intact), I felt guilty when I would make full profit on a consumer. Sometimes that would pay me 1,000.00 in my pocket to help support my family of four. Which supports the economy to btw... Then my mgr asked me how long will that thousand dollars last me, a week? I said yes maybe two if I plan accordingly. How long do you think your client will use his new car, helping him get to work to make money to feed his family? Three maybe four years before they trade it in... Let me ask you these questions earl, and EVERYONE else: since when is profit a dirty word? And who wins in the long run in a car purchase transaction? Why can every other business in the UNITED STATES OF AMERICA Mark up their products 2 or 3 times the cost making houge profits (300%) while car dealerships make maybe 1-3% of a profit margin? I understand a car or a house is a big ticket item so they can be negotiated (so said somebody one day), but one day I would like to haggle for the price of a t-bone at Publix, or gasoline or underwear or shoes or suits or GROCERIES or the cell phone bill or the electric bill. Seems as if everything for sale that you and use to Live goes up in price doesn't it? Um, wouldn't it be nice to see the invoice price of oil and bargain for gas? I think I made my point.
ReplyDeletePART TWO-I work 60 hours a week selling a quality product, New or preowned, and I get paid by commission only. Most new car shoppers research the invoice price, market price, kbb price, blah blah blah. I understand that price is important as I am on a budget just like you... but what about the person that spent 2.5 hours presenting, explaining, and demonstrating the vehicles' features and how they will benefit YOU? Do you not see the VALUE in that salesperson's time? Isn't he/shemance allowed to make a decent wage for working hard for YOU? Nope and nope. Why? "Because car salespeople are scumbags and are trying to screw over every hardworking person. How can they live with themselves and make a profit? How dare THEY?" Dealer fees are profit, but it's very little in the grand scheme of things. The state of Florida makes more on cars than the dealership does about 80% of the time.
ReplyDeletePART THREE-Since the internet changed the car business years ago to help the consumer get a fair deal (a couple hundred bucks over invoice), dealer fees came out to help keep dealerships open by making a DECENT profit and provide a service to the community helping people find what they want to go be mobile to have FREEDOM TO DO WHAT THEY WANT TO DO. nice huh? Again, profit is not a dirty word. We are providing a service and there is nothing wrong with getting paid for working.
ReplyDeleteI'll end this diatribe with an interesting fact: we say "Buyers are liars." It's kinda funny that 90% of people who are pointing a FINGER at car salespeople calling us scumbags are the ones who lie and treat us with disrespect and disregard us as human beings. My granddad told me a long time ago, "johnny, if you point your finger at someone remember that there are three of your own pointing back at you."
FINAL PART-I hope the day comes that the dealer fee goes away and EVERYONE pays MSRP. or EVERYTHING can be bargained for. Including gasoline. Unfortunately neither will happen so I can only hope that everyone I meet will end up liking me, my service, my product, and the VALUE of the car I am helping someone purchase, and that value exceeds the PRICE for which they will pay. Good Luck to you all, Godspeed, and try to treat us car guys with a little dignity. Come in well armed with.your pricing sheets and if we work hard enough, decide what percentage of profit we should make if we help you find the right car for your needs and if you received a world class experience. Think of it as a tip. Like a server in a restaurant, which I used to be... Carrabbas btw. Yum! A good server can make 20-29% of total sales in a tip for an hour worth of work. And good car salesman can work up to four hours helping people find a car, and not make a dime when the customer walks out because we didn't lower our price by 130.00. Wtf? Think about that. We put our pants on one leg at a time like you. And we go to work to put up with your bull. So just be cool.
ReplyDeleteOne more thing. Where does a business get the money to pay its employees? From their profits of course. Dealer fees are.profit but it does eventually get distributed to pay the detailers, the lot porters, the office ladies, the receptionist, the mechanics, the parts dept, the electric bill, the gas we put in your car when you purchase it, the overhead, etc. Just another business trying to keep people employed to help spend money to keep our dragging economy from crumbling. Blame the oil companies and Starbucks. 6.00 for a cup of .30 coffee? Who are the ripoff artists now?
ReplyDeleteLOL..I just got that final explanation handed to me by a Honda Dealership in Jacksonville this week. Justifying the reason for dealership fee. Here's what I said to him. You can get any kind of profit you want from anyone but you have to do it all at once and not wait until the last minute to put it on. And if this is such a good idea than why not all the dealerships in the US do it. Why only in lawless states? And why try to hide it? There are many kind of profits to be make and dealer fee is not one of them. Dealerships got most of their profits from charging inflated services fees and equipments and parts that they sale at an inflated priced. They also made it in leasing and services.
DeleteYou aren't seriously asking rational human beings to accept the dealer fee because "it goes to the hard working employees of the dealership"? The dealer fee goes straight into the dealers' pockets. In fact, most dealers do not pay their salespeople any commission on the dealer fee. He's tricking this customers and robbing his salespeople. What dealership do you work for, Mr. Anonymous?
ReplyDeleteI do not know why we still have dealers anyway, this 2012, what is with the middle man, why cannot car companies, open their own factory outlets and eliminate the middle man, it would be nice to be able to buy a vehicle without feeling you just had root cannal.
DeleteAnonymous. Give me a break. You created this monster with your sneaky tactics. I will never ever pay a dealer fee. How much profit is enough? Seems that if a dealer can make $5-700 hundred per car for a hour of work, that's a pretty fair deal for both parties. But we know this isn't the case because most people don't research the prices. I would never ever buy a car at your dealership. Shame on you.
ReplyDeleteYour wrong and wrong. 80% of people research the price of cars online now before they purchase one. Mainly because of the Internet. What the gentleman above said is pretty accurate. Very little profit is made on new cars. The dealer fee helps the dealership deal with the hit the Internet has taken on the profit of cars. Also like the guy up there said, $6 for a $.30 coffee at Starbucks and a ton of people are ok with that lol but a $1,000 profit on a $25,000 vehicle is wrong??? Please explain that math to me. I'll wait.
DeleteHey Club 977- its anonymous. I never created the dealer fee. And I don't have sneaky tactics. I am a man that works harder than you. I work 60+hours a week because WE are full commission salesmen. We don't make anything else. Why don't you try to work for free on a car lot and see how long you last. Stay in your cubicle and pay no dealer fee and buy a crappy car from a buy here pay here lot that will cause you nothing but mechanical trouble. Remember, you get what you pay for. And when was the last time you bought a car? It doesn't only take an hour of work... Again, step out of.your cubicle and step on a car lot. Then you tell me how long it takes to sell a car. On average its about three hours. Sure dealerships make their money, but it's the hardworking salesmen that get hosed because of people like you. Shame on YOU. And most people do research their prices. Do you research first before you assume and make an ass out of yourself.
ReplyDeleteI'm sure that you work hard and I understand that you are paid only on commission. I admire and respect car sales people who work hard and treat the customers with courtesy, respect, and INTEGRITY.
ReplyDeleteMost car sales people are against the dealer fee for two good reasons. The first is that they have to explain to most customers why the dealer charges is it which is difficult to do, especially if you tell them the truth...it's pure profit to the dealer. The second is that the dealer fee comes out of the salesman's pocket too. If you are paid a 25% commission of the profit on the car, the dealer fee is not included in that profit. If the dealer fee is $800, it costs you $200 because most dealers don't pay their salesmen anything on the dealer fee. If they included the profit from the dealer fee in the price of the car like they should, you would make $200 more on every car sale.
You are exactly correct. I do not get paid one penny on dealer fee as a sales person. Also, if we make a price concession to offset all or part of a dealer fee to appease a customer concern, that lowers my commission while the dealer still pockets their dealer fee. If we were allowed to reduce the dealer fee, believe me your salesperson would love to because it does not cost them one penny.
DeleteHi,
ReplyDeleteAs a buyer, I have no problem paying dealer fees IF I see an ad saying that the price is, say, 20000 and dealer fee is, say, 2000. However if the ad says that the price is 20000 but when I have already test driven the car, I am being told that there would be 20 $ fee, I 'll call it dishonesty.
I know exactly what I am supposed to pay on the cash register when I pick up a t-bone from a Publix' aisle. I don't know what amount I'll write down on the payment check for the car that I am driving. If that is not sneaky, please name it.
Two questions I always ask dealers who argue to defend their dealer fees are, "Why charge a dealer fee at all? Why not just include that profit you make in your dealer fee in the asking price of your cars?"
ReplyDeleteThey won't answer that question. They squirm just like a politician on “Meet the Press” when asked a question they are afraid to answer truthfully but can't think of an answer that won't either perjure themselves or sound stupid.
Of course the truthful answer is "We separate the dealer fee profit to trick the customer into believing the price of the car is lower than it really is."
It's not just car dealers that play the dealer fee game, it's motorcycle dealers too. Went to CycleTrader.com and found a good price on a motorcycle I want to buy. Contacted the dealer to arrange the purchase and found there was a $900 dealer fee and a $700 freight fee. I'm still shopping.......
ReplyDeleteI totally agree with Earl. He made a good point when he said the sales person would be loosing out if the dealer doesn't add the dealer fee into price of the car. You other dealers that charge a dealer fee are ripping off your own employees. Why not put the dealer fee into the price of the car? You rather the sales person go out their way and feel ashamed of their dishonesty all because you rather keep that dealer fee to yourself. That's just selfish if you ask me.
ReplyDeleteI recently purchased a vehicle in Florida from out-of-state. After reviewing the sales contract I had a question about the HIGH $479 charge on the contract for Title, License and registration fee. In NC a vehicle registration fee when transferring plates from another vehicle is approx. $40.00. which is exactly what I was doing. The salesman stated that any difference between what I was charged on the contract and the actual charge would be refunded after the title/registration was completed. I believed him. A little over a month later I received a check in the mail but it was short by $125.00 (I double checked with NCDMV re: fee costs) When I inquired with the dealer to the reason why I was told that they (dealer) charged a $125 fee to register the vehicle (send paperwork etc.) to the DMV. My question is this legitimate? At NO time verbally, by email or on any documention is this FEE disclosed or mentioned.
ReplyDelete**I also paid a $589 Pre-Delivery fee so is this not suppose to cover handling, paperwork, documentation, licensing, etc. of the vehicle??? I was also charged a $24. electronic filing fee??
I generally purchase a vehicle once a year and have never run into being charged an "EXTRA FEE" on top of the legitimate state Title, License and Registration fees to license a new vehicle. I just purchased another new vehicle out-of-state 3 months ago and was charged the actual cost of registering the vehicle in my state. No more. No "extra" dealer fee added.
To say the least this has put a bad taste in my mouth about purchasing another vehicle in Florida. Not only will they lose my money on the purchase of the vehicle but also any money I would have spent on Hotels, food, gas etc.
Signed,
Seymour Good
Dear Seymour,
ReplyDeleteI'm very sorry that you were victimized by this dealer. I'll cut to the chase, as you describe the dealer's actions, what he did was illegal.
Florida law requires that all charges not required by government agencies, federal, state, and local, be disclosed on the buyer's order as follows:
"This charge represents costs and profit to the
dealer for items such as inspecting, cleaning,
and adjusting vehicles and preparing
documents related to the sale."
You also mention an "electronic filing fee" charge. This should have been included in the "dealer fee" disclosure. This $24 represents a marked up cost the dealer incurred by paying an outside company to prepare the tag and registration for your car. His cost is less than $24 and he marked it up to make more profit on you.
Here's a link that more clearly explains the law in Florida regarding these kinds of fees, http://archive.flsenate.gov/data/Publications/2008/Senate/reports/interim_reports/pdf/2008-107cm.pdf. You can cut and paste this link in your brower.
Lastly, I don't know if you bought this car in response to an advertisement, but if you did the all of the "dealer fees" are required by law to be included in the advertised price.
I suggest you contact the local Florida Department of Motor Vehicle office nearest your dealer and file a complaint.
If you would like more specific information on this, please email or fax me copies of your buyer's order. My email is earl@estoyota.com and my fax is 561 658-0746.
HI EARL,WHEN BYING A NEW VEHICLE IS THE DEALERSHIP SUPPOSED TO JUST WASH THE CAR OR PUT A COAT OF WAX ON IT. I WAS TOLD BY MY SALES PERSON THAT THE NEW CAR WILL BE WASHED AND WAXED. DURING THE DELIVERY I COULD NOT FELL THE WAX ON THE CAR LIKE THE ONES ON THE SHOWROOM FLOOR.I COMPLAINED TO THE SALES MANAGER AND HE GAVE ME A CHECK FOR 40 DOLLARS,BUT I BELIEVE THEY JUST TRY TO NICKLE AND DIME YOU MOST OF THE TIME.
ReplyDeleteAs a salesman currently in the business and living in FL, there is a lot of valid information on this page. The way each salesperson gets paid will depend on the dealership, but as far as I'm aware, I don't know any other person (who is regular sales and not management) that makes ANY money off the dealer fee. Trust me, it is hard to validly explain the dealer fee to customers and it is also hard to accept it knowing that I will not make any money from it. One of the posts was correct stating that profits are very low on new cars, at least in our area where we have several dealerships of the same brand so competition is very aggressive, which when working for a dealership that pays on gross, doesn't make the job too easy.
ReplyDeleteFor those of us in the business who work solely as a means of income to support our familes during rough economic times, I would gladly accept an ammended price that dismissed the dealer fee. I don't particularly enjoy the look of bewilderment or anger on some customers faces when they see that fee, but we are at least completely up front about it at my dealership along with all other prices.
The amount of money some people here think a salesman makes per car is insane. I work 60-70 hours a week, give up watching my son grow-up, in the hopes that some time I will earn enough to give him a better life and my CSI's from customers will paint a flattering image of my honesty. If I made $500 per new car (or used for that matter) that I sold, I would be overjoyed. The prices are so aggressive here and people are so well informed, salesman are lucky to hold that much gross in a car. Unless the dealership pays 40% or something, as mine only pays 20%.
Lastly, the bottom line is the bottom line. I know people like to say "Well tell them to take it off or I'll walk." I've NEVER seen them remove the dealer fee since I've been here and we average 2-350 cars per month (depending on the time of year). There is only so negative a dealership will go, and the OP who started this knows it. If a dealership is trying to hit a goal for a month, I can see taking a couple of $3k or more loser deals, but to sell your cars constantly with negative profits will not do well by your store or the salesmans wallet...unless of course he thinks he can live off minis or his pay plan rewards numbers and not gross.
I am not sure about what you're saying that the dealerships don't make much on new cars anymore. Because I've been shopping for 3 weeks now for an new car and 99% of the dealerships I've been to are asking MSRP and they are not willing to go down any amount. They stated that that's the price the manufacture want the to sell it at and that's the only price they will sell it at. A few do come down on the price by only a measly $200 to $500 of MSPR.
DeleteYou’re correct that most car sales people are not paid any commission on the dealer fees and, in fact, usually managers are not either. Usually the dealer fee goes right in the dealer’s pocket. There has been talk of sales people banding together in class action suit against car dealers because their compensation agreements with dealers is to be paid a percent of the profit on each sale, typically 25%. If a dealer has a $1,000 dealer fee, the sales person is being short changed on his commission by $250 on every sale. In my opinion, this would be a successful lawsuit and I’m surprised that car sales people have not organized to do this.
ReplyDeleteIt’s refreshing to me to know that you recognize the fact that the dealer fee is something that offends your customers and that you feel bad about it. Many car sales people feel as you do and it tells me that you have a conscience. As you say, when you have a family to support during tough economic times, sometimes you have to do things you would prefer not to.
You say that your dealer pays only 20% commission but some car dealers pay 40%. The chances are that your dealer does not really pay 20% nor do other car dealers pay 40% of the real profit they make on their cars. There are hidden holdbacks, phony advertising fees, and secret dealer cash incentives from the manufacturers, not to mention dealer fees. The dealer pockets this money and doesn’t pay the salesman on it.
Telling the customer to “Take it off or I’ll walk” will work only in market where some dealers don’t have a dealer fee. In my market in Palm Beach County there are four Toyota dealers, two have dealer fees of over $1,079…Royal Palm Toyota and Palm Beach Toyota. They are both owned by the Penske Automotive Group. The other two dealers, Earl Stewart Toyota (my dealership) and Delray Toyota (Owned by Ed Morse) do not charge dealer fees. CarMax, the largest used car retailer in the world has a store in Palm Beach County, does not charge dealer fees anymore. Mullinax Ford does not charge dealer fees, but the other three Ford dealers do. I was the dealer who first dropped the dealer fee 15 years ago and it’s having a domino effect. It could happen in your market too, but somebody has to go first.
I'm not certain you are correct to say “'Take it off or I’ll walk' will work only in market where some dealers don’t have a dealer fee." If the dealer is making enough profit on the actual price and doesn't think he can sufficiently gouge a different customer, I think most will take the fee off, because they won't want to lose a sale with good profit simply because it is not the same profit they make on suckers.
DeleteWhat can I say, that hasn't already been said... Dealer fees are a scam and deceptive. One Anonymous dealer above said that the dealer fee is "pre-printed on our purchase sheet". That's says it all... it's thrown in after negotiations on price and you're sitting to purchase. That, plain and simple is a tactic. A tactic that doesn't work for me, either... but, a tactic.
ReplyDeleteI have no problem with anyone allowing the market to dictate price and a free economy to allow for profit, high or low... Just because a dealer makes a large profit on a good product or service is not wrong in and of itself...
However, when the industry as a whole (not everyone, mind you... but an accepted majority) employs deceptive/dishonest practices and attempts to game the free economy (by legislating that a dealer fee has to be for all or none... or they all get together and silently set a normal fee, etc).... that is anti-trust.
Take a look at the case of Westinghouse and GE in 1920's... they created a silent monopoly, gaming the electric generator market.
I've been retail automobile sales since 1978 and recently move to Florida from Texas. The only fees Texas dealers charge are documentary fees which are no more than $200.00 and most dealers charge $149.00.
ReplyDeleteI was surprised by this blantant fee to rip off customers. My philosophy is if your sales, finance and management teams are inept to make the dealer profit than the dealer needs to get out of the.business. How dare they charge me a fee for purchasing a vehicle.
Take your hard earned money elsewhere to a reputable dealer. Why negotiate a fee that should be outlawed?
We are business owners. Every business has fees. If its included in mark up or not. The business needs to survive.Im a dealer and if you want honesty here it is. Dealers that advertise no dealer fee has some profit somewhere in that deal. I wont do it. If you dont want to pay the fee then go to big bobs down the street. I don't do this for fun ya know. I have had plenty of deals where all I made was the dealer fee. And thats not all pocket money. I got a staff to pay and cars to replenish. Im not a "volunteer" dealer. Every business needs to survive. My dealer fee is lower than some church memberships
ReplyDeleteI just bought a new car and was charged a $699 dealer fee. Went to sign contract after negotiating and they added a $235 documentation fee without ever telling me. So I actually paid $835 in extra charges. I understand Florida's max dealer fee is $1000 but their is no limit on Doc fees. When I questioned the Doc. charge they said "it is what it is". I understand the cost of processing an order but I thought that would all be included in the dealer fees. After hours of negotiation on price they sneak in this added fee I was unaware of. Can't understand why Florida does not have dealers post these charges upfront or just include then in the sticker price.
ReplyDeleteJim, I'm very sorry to hear you fell victim to this illegal scam. Most car dealers now are going to multiple dealer fees to add to the deception. Dealer fee is really just the generic name for phony fees by many different names. "Documentation Fee" is the one they tricked you with, but others are "Dealer Preparation Fee", "Electronic Filing Fee", "Notary Fee", and "Administration Fee". The number of different names is limited only by the dealers' imagination. There is no Florida law on what a dealer can name the phony fee that is really just additional profit to the dealer. You're wrong about there being a $1,000 limit on dealer fees. THERE IS NO LIMIT in Florida on the amount of dealer fees. As hard as this is to believe, a Florida dealer can charge you as much for a dealer fee a he thinks he can get away with. A doc fee is just a dealer fee by a different name. I suggest that you file a complaint with the DMV and Attorney General's office if the dealer did not include those fees in his advertised price. That is against the law in Florida. However, dealers usually don't sell the one advertised car but switch the buyer to a different car. .
ReplyDeleteMy recent purchase had a charge for license, registration transfer, and title of $135, but there was also a charge for E-Tag file of $235. What is that additional e-tag file charge if I'm already paying $135.
ReplyDeleteI'm sorry, but you were taken advantage of by your car dealer. The legitimate charge was the $135 which was paid to the state to transfer your tag and registration. The phony fee was the $235 which should have been disclosed to you as a "dealer fee", meaning it is simply additional profit to the dealer. Almost all car dealers now are charging various phony "fees" by different names. "Electronic Filing Fee" is one of the more common new ones. Others are dealer prep fee, doc fee, administrative fee, and notary fee. You should file a complaint with the AG or DMV.
ReplyDeleteOh yes, they disclosed a $699 dealer fee but still added the $235 e-tag file fee which I picked up upon signing (never disclosed beforehand). After going through tough negotiations for hours they sneak this in and you just "give in" to get it over with and get the car. Very slippery business. They just wear you down until you give up.
DeleteI have been in car sales for 10 years, I have also purchased 15+ cars in my lifetime and paid many of dealer fees.
ReplyDeleteI am a firm believer of the bottom line price, regardless of dealer fees, administrative fees, documentation fees, etc... If I get a quote from dealership on an identically equipped vehicle for $25,000 plus tax, tag and title with no dealer fee and then a quote from a competing dealership for $24,000 plus tax, tag, title and lets say a $699 dealer fee - I would purchase from the second dealer even though they had a $699 dealer fee, essentially saving $301 compared to the dealer who advertises "no dealer fees". It's all smoke and mirrors if you ask me, bottom line is the bottom line. I haven't heard anyone on here complaining about manufacturer hold-back or dealer pack to the cost of the vehicle. Profit is profit, and last I checked car dealerships aren't a non profit organization. Stop your crying and complaining and do your research before you make a purchase, buy from the dealership that gives you the best deal and the best customer service.
For all you naïve car shoppers out there that believe you are not paying a "dealer fee" just because it isn't printed on a contract or visible to the buyer I have news for you, it's there. Billed to the cost of the vehicle, the dealership has a pack they put on every car to ensure they make a profit.
Also, don't take it out on your salesperson. He didn't put the dealer fee on the contract and he isn't getting paid on it. Believe it or not we are humans too, most of us are just trying to make an honest living and provide for our families.
You see if that's the case then we all would go for the $24000 car with dealer fee of $699 but in all of my dealing with dealerships in FL...there never a cheaper car with a dealer fee. They are always the same price or maybe a little more or a little less around $50 to $95 dollars difference and then the $699 dealer fee at the very end of the negotiation. They never tell you what they will be charging until the last minute just when you were feeling real good about the deal then they kill it with the surprise of the dealer fee. That's just get me mad as hell and kill the mood for me. You see , the thing about buying a car or something anything is that you feel good about what you buy. If you don't feel good about it then it's not a good buy for you. I bet you that all the good dealership always have good sales and good buys. I can tell you that anyone who got a good feeling from a buying a car from that one dealership will always come back to buy from them again.
DeleteYour advice to all those " naive " car buyers to pay attention only to the "out the door price" is very naive of you or more likely very disingenuous. Car dealers tack on the dealer fee "after the fact"...that is after they have already quoted a phony out the door price. Many buyers don't even realize they have been charged a dealer fee; they are led to believe it is a legitimate government fee or they miss it entirely.
ReplyDeleteSure, lets skip over everything else and pick out a few words to use out of context. Do you disclose how much you make in holdback on a new car sale? Do you disclose your new car or used car pack to your customers? Why don't you print up the recap screen and show them front and back end gross in the deal, or disclose to the customer how you marked up their buy-rate 2 points and are making thousands of dollars on finance reserve. Your "no dealer fee" pitch is nothing more than a sales gimmick, you are in business to make a profit and if you don't charge a dealer fee to your customers they are paying you a profit somewhere else. That is all I am saying.
DeleteAs far as the buyer not realizing they paid a dealer fee, I can only empathize so much. If you sign a legally binding document without completely reading it, line by line to know exactly what every dollar being charged is for then you have no one to blame but yourself. The dealership I work for discloses the dealer fee twice to the customer before they ever get to the business office to finalize their paperwork. I tell them straight to their face if they have a question about the dealer fee that it is nothing but profit for the dealership, nothing disingenuous or deceitful.
Lol Earl every "Ford" dealers, let's say, has the same bottom line they can sell there car for really. Once the number hits a certain point than you can't go any lower. Wether it's the guy that says 24,300 and than plus a dealer fee or your dealership for example where you just charge 25,000. It's all the same thing. That's the point he was trying to make. No ones actually getting screwed by the dealer fee and your misleading people into thinking its some giant profit scam. It's just so dealers can advertise even lower because for some reason this business has turned into "who can show the lowest price" which is dumb in itself but it's really what the customers have dictated. Customers wanna complain about the dealer fee but will pay $3,000 more for a car than they could've gotten it for. Do you see the stupidity in that? The bottom line is the true figure that only matters.
DeleteAnd this guy above me is calling you out for what you really are Earl. Your making the same profit all the other dealers are making except your sitting here trying to play the saint/hero card over the dealer fee when you make that money in other places just like the gentleman said. In the cost of the car or holdback or finance, your getting yours buddy... Don't fool these people or kid yourself.
DeleteFYI, Earl is enjoying himself on a cruise at this moment. When he returns next week, he will gladly destroy the laughably specious arguments posted today! Stay tuned ;)
DeleteDear “anonymous”, I will answer all of your questions and allegations, but first let me ask you to "come out of your closet of anonymity". Call me (cell phone 561 358-1474) or meet with me in person at my dealership in North Palm Beach. Look me in the eye and let's have a real discussion. Or, better yet, join me on my live radio show this Tuesday or any Tuesday between 4pm and 6pm. I will give you all the time you need to make your case. I will then respond on live radio. We should air our differences in public...in the "cold light of day". To answer your question about holdback, yes we do openly discuss and explain holdback. We do not pack our cars so there is nothing to disclose. Unlike your dealer and almost all others, we have our lowest price on every new and used car. We also quote this price freely to anyone who calls, comes in, or inquires online. We encourage all of our customers to shop and compare our price with the competition. We do the same with our interest rates, lease payments, and monthly payments on purchases. You're attitude that a customer "deserves" to pay too much if they're "stupid" enough not to read the fine print speaks volumes about why car dealers have such a bad reputation today. You "just don't get it" and probably never will. This is fine with me because I'm selling your customers cars and selling those of all of my competition in my market. You won't have the courage to take me up on my offer for a face-to-face meeting because, in your heart, you know I'm right. MAN UP OR SHUT UP.
ReplyDeleteDear anonymous car salesman, You're wrong! I don't make the same amount of money as other car dealers; I make a lot more! This is because I don't lie to, cheat and steal from my customers. I sell my cars for what I advertise them for which is less than you and your "brethren" sell them for after you add your secret dealer fees and dealer installed accessories. Because of this I sell a lot more cars than you or other dealers. This is why I make a lot more money and so do my salesmen.
ReplyDeleteI am buying a used car from a south Florida dealer and he is not only tacking on a $699 dealer fee but he is adding a etag fee of $169 and a transfer title fee of $450 and I'm just using my on plate. When I said what this etag he said oh that a charge we do now
ReplyDeleteJr, the dealer you refer to sounds like Schumacher but most South Florida dealers have jumped on the "etag", electronic filing fee, e-filing fee, and tag agency fee scam. You're led to believe that it is a government fee associated with your Florida tag and registration fees but it is not. It is their customers reimbursing them for their cost of preparing the tag work....BUT WAIT THERE'S MORE! The dealers mark this cost up by several hundred percent. This dealers cost for the "e-filing" service is about $10 and then he added $159 to charge you. This really just a dealer fee which is pure profit to the dealer. By not disclosing it as that he is breaking the law.
ReplyDeletePlease
DeleteIt's DORAL Lincoln in south Florida
I would like to do whatever I can to report them
Not only did the charge the e-tag they charged $450 to transfer the tag from a lie asked car to this car which was a purchase
Hi Earl,
ReplyDeleteCan you tell me what a government fee of $250 is? JM Lexus is charging that on top of a $250 electronic filing fee plus a $798 Doc fee! Which of these are legitimate charges and which can be negotiated?
Thanks for your help.
Hi Earl,
ReplyDeleteCan you tell me what a government fee of $250 is? JM Lexus is charging that on top of a $250 electronic filing fee plus a $798 Doc fee! Which of these are legitimate charges and which can be negotiated?
Thanks for your help.
Is a dealer fee the same thing as a doc fee?
ReplyDeleteDear Concerned Car Buyer,
ReplyDeleteYes, a "Doc Fee" is the same as the Dealer Fee. Unfortunately Florida laws allow car dealers to name their extra hidden profit aka "Dealer Fee" anything they choose. The same law allows them to charge any amount they choose.
Now why do you say unfortunately ?..if I own a bizz it is my choice how I sell my product an price I sell at consumers decide to do bizz with me or competitor's.... it's like two barber shops in town..one calls it a hair cut for 12.50 no fee the calls it a hair do for 11.00 plus a $1.00 clean up fee , ... how is this bad ???
DeleteI just bought a used car in Florida. I noticed the dealer fees ranged from $600 to $900. Don't worry about the fees- as a matter of fact, they work to your benefit. You don't pay tax on that. There's so much more to buying a car than worrying about a dealer fee. I got a great deal and the dealer fee was $900. I simply made an offer "out the door" price. Let them worry about where they cut the fat. But more importantly, you have to know what kind of car you're buying, it's safety and reliability reputation, and what they are going for. Look at the carfax. That is such a huge benefit to the buyer. Look at Consumer Reports and study it well before you even consider buying a car. Toyota and Honda have no models in the do-not-buy list, but not all models are recommended. Some Subaru's are highly recommended, but some models are bad enough that they are on the do-not-buy list. You have to be careful. Camry's are great cars, but 2009 is left out of the recommended list. Sometimes dealers sell cars for less than they gave for a trade-in. Dealers are not all sleasy, but i'd stay away from "Buy here, pay here" used car dealers. Buying used from a new car dealer I found is the way to go.
ReplyDeleteYou are so right .... congrats ... let's use new car for comparison ...2017 civics LX one is 20500 pluse 499 fee = 20999... one is 20200 plus 799 = 20999.... thanks for your sanity lol😁😂😀
DeleteI am trying to negociate a deal on a Honda. Any dealers in South Florida that don't charge dealer fees on Honda
ReplyDeleteI am from up north and when I moved here I discovered the dealer fee and I was stunned. Their rationale was that they have to make the car presentable for resale but then why do they still charge it on new cars too. I am confused. I recently have a bate and switch on me by a dealership in the Tampa area. The so call internet manager emailed me the final price for new car and when I got there he told me that the car is not one his lot but on another dealership and if I test drive a different one first then if I like it he will make me a contract for the one he emailed me. Sure enough he didn't want me to buy the one he emailed me, instead he told me that if I want the one he emailed me then it would be more money. He jacked up the price of the car he emailed me by $11k and told me that if I want the car he emailed me then I would have to pay $45k for it. I ran away from that dealership faster than a turkey on Thanksgiving day. I also file a complain against his dealer with the BBB and the FTC.
ReplyDeleteThese dishonor dealerships should be fined and take out of business for the sake of the customers.
Welcome to Florida and the "Wild-Wild West of Car Selling." Nothing you described surprises me. You may be shocked to learn that car dealers in Southeast Florida are worse than those in Tampa. It's Buyer Beware when you buy a car in Florida. My suggestion is that you direct your complaints to three agencies...The Florida Department of Motor Vehicles, The Florida Attorney General's Office, and the Florida Office of Consumer Affairs. You can download complaint forms for all three at www.FloridaCarDealerComplaints.com.
DeleteI live in TN and I stopped at Freeland Chevrolet in Nashville. The salesman immediately offered me a discount and I would have purchased a vehicle that day, but my wife wanted a different color. I asked the salesman about the fees and he replied, "We never charge our customers a doc fee."
ReplyDeleteWell as. 9 year sales man no one gets it dealer fee as well as hold back only SCREW the salesman on commission , ultimately the bottom dollar on a particular auto is the same no matter how it is arrived ... example dealer one bottom dollar 2017 Accord LX $22000 plus fee 499..= 22499 or 22500 Okay .... dealer two bottom dollar on 2017 Accord LX $21400... Wow .. but wait ... dealer fee $1099 .. = 22499...I 22500 ... now the difference , management and up is paid on profit from Dealer fee sales people are not , so like my store I make %30 of front profit (money made of sales of car price less cost)let's say total profit at this point is 1500... dealer one would mean 1500-499 fee =1001 payable front gross .. so I make $300.30 .. dealer two has the same over all profits $1500 but dealer fee is $1099 , so $1500-1099= $401 I make %30 so $401*.30 = $120.30 ... so look reality is consumer gets same deal as cash customers negotiate to an out the door price , most all that finance negotiate a payment , so if a consumer negoiates a 300 payment that is a total financed amount of $15900 for60 months @4.99 if the dealer owns the car for let's say 13900 ( for easy math were assuming no state fees or tax) .. this means total dealer gross profit of $2000 .. if dealer has 499 fee that sales person paid off of 1501 * .30 =$450.30 other dealer has fee of $1099 ... same total profit ... $2000..... $2000-1099=$901.. $901* .30 =$270 .... $2000 is about avg front gross , it's what it takes to keep lights on , but see how fee affects our pay sane for the buyer but look at the diff for me on avg deal $180 if I average 10 cars a month that is $1800 per month less $2700 a month vs 4500 a month ...or $54000 per year vs $32400
ReplyDeleteI've always believed that sales people should have the dealer fee included in the profit on a sale when their commission is calculated. If you have a written pay plan (which you should), read it carefully and see if it specifically excludes the dealer fee from you commission calculation. If not, you have a valid case to take to your dealer and demand that you be compensated retroactively. Of course, that's also a good way to get fired. You might have recourse to sue the dealer, but that can be scary. I'm sorry that you're caught between a rock and a hard place. Good luck.
DeleteI went to look at a used car today that was advertised for 3495. When I inquired about the out the door price over the internet I never received a reply. Went to the dealer today and found out the "out the door" price went up to 4800 and change. 700.00 dealer fee, tax, title 395(estimate ) and sales tax 300. Wasn't this supposed to be disclosed on the advertised price? Said I would come back on thur to test drive
ReplyDeleteThe only things that a car dealer can legally add to an out-the-door advertised price are GOVERNMENT FEES...state sales tax and license plate/registration. I recommend you find a different dealer who will be honest with you.
ReplyDeleteI recently went to a Ford dealer in Louisiana. We were given a price by our salesperson which we agreed to. By the time I got to the finance guy, the price was raised $200 for a dealer fee. He said if he did not charge it, he would be fined $10,000 by Ford. Is it any wonder people don't trust dealerships? They seem to attract sociopaths.
ReplyDeleteBy the way, the $200 would not have hurt me. I just don't like to be deceived.
The lie and the coverup are worse than the crime. You have to admit that the finance guy had a "vivid imagination" claiming Ford would fine the dealership $200,000!😳 By the way, Louisiana dealers are way behind Florida dealers... you rarely see a dealer fee under $1,000 in Florida !
ReplyDeleteBought a used Hyundai in January 2017.
ReplyDeleteAt the bottom of the pile of papers they have you sign off on (Patriot Act - Terrorist Background check), Emissions Act, Warranty - AS IS, is the FINANCE PAPER. (a warped variation of saving the best for last?)
On this finance paper was the entry:
Paperwork Processing Fee: $700
So - dealers have yet another means of twisting spaghetti words around to get the buyer for:
Destination charges
Transport Fee
Dealer Prep Fee
Paint-Sealant coating fee (old)
Undercoating Fee
Shuffling Papers Fee
and - waste the customer time fee.
6 years ago, when I lived in a northeastern state, I leased a vehicle for a very reasonable down payment and reasonable monthly payments. By the time that the 3 year lease was nearing its end, I had moved to Florida. I could not find any local Florida dealership willing to lease another similar make and model vehicle at reasonable prices, primarily due to the “dealer fee”. I went up north and got the same deal as my original lease and they titled everything in Florida.
ReplyDeleteLast month, when my leased vehicle was nearing the end of the lease, I again checked several local dealers. One of those dealers is new and advertised “no dealer fee”. All of the local deals were again much higher than I had negotiated up north. So much for “no dealer fee” dealers.
I was ready to go back up north to visit relatives and lease a new car when a friend told me about a dealer in Central Florida who gave him a deal similar to what I had on the same basic car. I contacted the saleswoman at this dealership and without any hassle at all, I had my new 2018 car in 3 hours at the same price that I paid up north.
If this dealership can make a profit without charging a dealer fee, (the same profit that the dealers up north make), why do the Florida dealerships have to make this extra profit called a “dealer fee”? If buyers in Florida are willing to accept these extra charges, there is no incentive for the Florida dealerships to eliminate them.
As a senior citizen, I have bought or leased many vehicles. This had to be the easiest car deal that I ever experienced.
I’m not that much of a online reader to be honest but your blogs really nice, keep it up!
ReplyDeleteI'll go ahead and bookmark your website to come back later.
Many thanks
Thanks for reading and please spread the word.
Deleterescently started a company and needed a panel van. Stopped in a dealership and negotiated a decent price when the paper work came back it had Yes you guessed it DEALER FEEs over $900 bucks. I walked told them to keep it. Eventually bought a van from an AC company that was upgrading their fleet. I am all about making a profit. Simply list the cars etc with your profit built in, this would prevent less hassle.
ReplyDeleteCongratulations on being an educated consumer refusing to be intimidated.
DeleteI was in the car business for over 20 years. And the dealer fee is a BS fee. The cars come in ready for delivery other than a car wash. All a dealer fee is extra profit and not all dealers charge this fee. Earl Stewart does not charge this fee. No matter where you buy/lease a car from you can bring it anywhere for the same brand of car for service.
ReplyDeleteMike, thanks for your comments, especially coming from a person who was in the car business for 20 years. You're and "insider". We agree that the "dealer fee" is the biggest lie and rip-off by car dealers and customers there is or ever was.
ReplyDelete