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Extra dealer fees to be aware of

11726 Views 21 Replies 13 Participants Last post by  Cerulean Obsidian
Hi everyone-

I absolutely love the information on this site. I've spent the last two days reading and reading. Good stuff. My question, though, is regarding extra dealer fees that are added to a new car sale. I've never purchased a new car from a dealer and I'm completely naive to what to expect. I've learned a lot in the forums and now have a good number to what I want to pay. When approaching the dealership with this number in my head, what am I going to see added at the end of the process and what should I look out for? I realize sales tax is going to be there but "documentation" and "delivery" fees are common? Is there a resource (this site, of course but I can't search where) to see what "acceptable" number for these fees are? Lastly, the dealership lays everything out in front of me, right?

(I apologize in advance if this is common knowledge. I'm very familiar with forums but I can't seem to find this info)
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Keep in mind that some of what they can, will, and may try to charge you may be regulated by your state. So as stated google is your friend on all of this.
 

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Keep in mind that in some states, sales tax will NOT be there. For example, here in Oklahoma, while we allow you to finance the sales tax in if you want to do so, we don't actually collect it at the dealership level. You pay it to the tag agency when you go register your car.

There will be a reasonable (or unreasonable) dealer doc fee. That fee is probably state regulated, but note there is a difference between state mandated and state regulated. Mandated means they MUST charge it - regulated means the state says you can't gouge the customer more than a certain amount. Our doc fee is $299, other dealers (including the ones across the street) charge $499.

Pay VERY close attention to any dealer addendum sticker. We've pretty much given up on those unless it's something serious like putting different tires on an STI. And we still put nitro in the tires and wheel locks on, and all weather mats in the cars that don't have them just as part of it. But I've seen dealer trades come in with addendums in their windows of $599 for the 'Dealer Protection Package' - which is nitro in the tires, wheel locks, and all weather mats. What's fun is seeing those addendums on cars that already HAVE all weather mats on the Monroney. Tell the dealership thanks, but no thanks, and you'll be more than happy to walk if they don't get rid of that stupidity.

Also pay VERY close attention to the actual Monroney window sticker. You can't trade things out that are on there - hey, I don't want these cross bars, but I'll swap them for a retractable cargo cover. Sorry, if it's on the Monroney, the dealership HAS to give it to you. So if you look on the Monroney and it says Body Side Moldings, and the car doesn't have them - somebody is due for a big fat fine. Federal law is involved here. Also, of course, make sure the VIN on the Monroney matches the VIN on the car. Sometimes dealers will have windows tinted and remove the window sticker. That's acceptable if the Monroney then is put back on the car. But tint people make mistakes.

And of course, make sure the paperwork you're signing is for the car you take possession of. It does happen by accident. I know, been there, done that - had two identical Outbacks on the lot, ended up giving the customer I sold the wrong car. Honest mistake - it was late at night after a big Saturday. But again, check the last 8 of the VIN of the car you're getting ready to drive off the lot with the last 8 of the VIN on all the paperwork you just signed. Because here's one other thing most people don't know or realize.

There is no 3 day right of recission when buying a car.

(Except in California, where you can purchase an option to cancell the contract on a USED car up to two days later). If I came to YOUR house and asked you to buy my car there, and we did all the paperwork there, then yeah, you do have the 3 day buyers remorse period. Other than that - you sign all the papers and as soon as you break the curb, you're an owner. So take an extra five minutes and double check to make sure you're in the right car.
 

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Discussion Starter · #5 ·
Good tips. Thanks.

I know what I want. 2016 Outback Premium PZEV with no extras and I know invoice is $26,076. I expect to pay that price and not put everyone involved in a two hour long haggle process to save another 1%. From what I understand, it's fair for both parties and that's what I want. I'll keep my eye our for the documentation fees.
 

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Hi everyone-

I absolutely love the information on this site. I've spent the last two days reading and reading. Good stuff. My question, though, is regarding extra dealer fees that are added to a new car sale. I've never purchased a new car from a dealer and I'm completely naive to what to expect. I've learned a lot in the forums and now have a good number to what I want to pay. When approaching the dealership with this number in my head, what am I going to see added at the end of the process and what should I look out for? I realize sales tax is going to be there but "documentation" and "delivery" fees are common? Is there a resource (this site, of course but I can't search where) to see what "acceptable" number for these fees are? Lastly, the dealership lays everything out in front of me, right?

(I apologize in advance if this is common knowledge. I'm very familiar with forums but I can't seem to find this info)
For both of my 2010 FJ Cruiser and 2016 Outback purchase, I only paid $60 fee other than the purchase price and the sales tax. That $60 break down into $51 title fee and $9 vehicle plate transfer fee.

Both time the dealer tried to charge me extra $399 and $599 so called "documentation fee". But when I asked them to explain what is that, they said it's for the finance people to do the document. I told them It's ridiculous and I'm not going to pay $399/$599 for someone to fill out few forms in 15 minutes. Eventually, they waive the fee.

Both time I talked with dealer with pre-tax purchase price first, then trade-in (if you have one to trade). Only talk the fee right before you sign the purchase agreement. They will not break that deal just for that few bucks.

Negotiate with the dealer is an art. Do not expect to spend only 10 mins and walk away with an amazing deal. I spent two and half hours to talk with the dealer and ended up paying $31,000 (pre-tax) for a new 2016 Outback 2.5i limited w/ eyesight (MSRP close to $36,000), and another customer next to me paid more than $34,500 for the exactly the same vehicle.

Please do tell me it doesn't worth the time to save few thousand bucks, because it does.

BTW, I purchase with cash both time. If you finance through the dealer, it might be different because they need to do a lot loan paperwork. But if you finance with your own bank, they shouldn't charge you excessive fees.
 

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Regardless of whether you are buying the car off the lot or ordering it, things like taxes, documentation fees, and delivery fees should be up front. Same thing with the cost of packages and accessories. You should be able to ask the dealer for that information and have them provide it up front so at least they're not a surprise. You can negotiate some on the delivery and documentation fees, if you really want to press. I've never seen them be what I would call unreasonable so I don't press it.

The 'extras' are usually brought up by the finance guy. These involve things like warranties, repairs, road hazard warranty for tires, clear coat/rust protection, etc. These are things you can ask for up front but aren't always provided. Pay very close attention to the details and ask a lot of questions. For example, when I bought my OB they were throwing all kinds of extras. We didn't really want the emergency roadside assistance - we have AAA+ - but the Gold Plus warranty seemed really worth it considering it covers so much that the 'Classic' warranty doesn't. There are 'downgrades' to the various warranty packages, based on the deductible, the mileage/time and what's covered. Our dealer's finance guy really wanted us to get a bundle but we had him break it apart so we could pick the things we wanted and were willing to pay for (like the Gold warranty package, the road hazard warranty for the car but not some other things we really didn't need that are dealer specific, not SOA). They will try to move quickly (they want to get on to the next buyer) but you can and should take your time to read everything they give you. Again, if you can get the dealer to give that information beforehand I highly recommend it. I think the warranty I got (the Gold Plus) plus the road hazard was worth it. You do not have to buy the warranty from the dealer (this I found out after), you have a grace period to buy it and you can get it from other Subaru dealers for a cheaper amount (fortunately mine was on the cheaper end). The dealer pushed their version of clear coat (they call it luxcare). Debates rage on the 'net about whether that's really worthwhile, I went ahead and said yes on the OB - mostly to satisfy the spousal unit.

To be honest, that's always the least fun part of getting the new car and I always worry that they're pulling a fast one on me when I'm talking to the finance guy. That's been true across all the new cars I've bought including Fords, Mitsubishi and now Subaru.
 

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I work at Tom Wood Subaru in Indianapolis and the extra fee we charge as a dealership accounts for vehicle theft registry (lowers insurance premium), Safety First Pulse brake lights (soon to be required by law), and our service rewards program which include free tires and brakes for life (with limited exclusions).

This is all not to mention, as I have stated multiple times in other threads on this site, we have local competitors that advertise invoice pricing on all their vehicles yet require the payment of other huge fees... ie $899 doc fee. Be mindful of the quality of the business you're dealing with, frankly I have found that to be a more important deciding factor in who to deal with moreso than worrying about the nickel and dime aspects of vehicle pricing.
 

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It has always been my habit to discuss the Final Out The Door Not A Dollar More price.

I honestly could not care less if they sell me the car for $1 and add in $9,999 of taxes and fees. If my budget is $10K, that is what I'm paying.

Worst phrase you can ever answer is "what are you looking at for a monthly payment?".
 

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Also note that you don't have to finance a car through the dealer, you can pre-arrange your own financing. In many cases, this is better, because it's NO PRESSURE. Often times the dealer will try to co-erce you in to buying on the spot.

In Washington, the stupid "dealer doc fee" is not a required fee. The way I see it, it's just another way for a dealer to price gouge and get more money out of people.
 

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Worst phrase you can ever answer is "what are you looking at for a monthly payment?".
Why? Expectations need to be set, if say my dealership is able to deliver on said expectations and we can agree to terms with a customer that is how business gets done. Often times we're able to initially get a customer in their target payment range and then with a little more time secure them better terms. Not all financial entities that we work with answer on the spot or even the same day. We'll even have customers wait to take delivery until we can establish the best deal for them.

Also note that you don't have to finance a car through the dealer, you can pre-arrange your own financing. In many cases, this is better, because it's NO PRESSURE. Often times the dealer will try to co-erce you in to buying on the spot.
The majority of the time, in my experience, I hear from customers about better deals the customers claim they can get but there is little to no follow up from them to actually get anything done. If you are willing to do your due diligence in securing financing, as many of my customers do and they are quite happy with the terms they receive, good for everyone involved. The reality as I have seen is that there usually tends to be a whole lot of talk but until we see the follow through its just talk.

Its usually just gamesmanship on the part of the customer who perceives that they can somehow negotiate a better deal without actually proving anything as claimed.
 

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Why? Expectations need to be set, if say my dealership is able to deliver on said expectations and we can agree to terms with a customer that is how business gets done. Often times we're able to initially get a customer in their target payment range and then with a little more time secure them better terms. Not all financial entities that we work with answer on the spot or even the same day. We'll even have customers wait to take delivery until we can establish the best deal for them.
Because for most people in my experience, they merely look at "Sweet, new car for $300 a month!" and don't pay attention to the interest rate and length of loan. So they might think they got a great deal, when they paid $40K for their $28K car. Monthly amount is a only a part of the overall context or a purchase that involves financing a loan. Your dealership may be better than most, my experience is most are out to maximize profits and if that "takes advantage" of someone...why should they care?
 

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Because for most people in my experience, they merely look at "Sweet, new car for $300 a month!" and don't pay attention to the interest rate and length of loan. So they might think they got a great deal, when they paid $40K for their $28K car. Monthly amount is a only a part of the overall context or a purchase that involves financing a loan. Your dealership may be better than most, my experience is most are out to maximize profits and if that "takes advantage" of someone...why should they care?
I totally understand the consumer side of things having paid off a few car loans in my life with interest rates between 2.9-8%. Some people just want a car and there are just so many variables that play into getting financing. Credit score, credit history, debt-to-income ratio, type of vehicle, new or used, amount financed, term desired, term available, cash down, etc are just a few factors I can think of.
 

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Seriously. It's complicated to not find oneself being financially buggered.

And I might admit to loathing my local Subaru dealership. Problem of it being the only one in the city. I have several Subaru owner friends and family and not one has had a single good thing to say about the place for either the sales or service department.
 
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This is a little off topic, but here in Buffalo I've heard radio ads for a Dodge dealer who was stating a lease on a $38,000 pickup for only $279 a month with no money down. The lease price and the no money down were repeated several times during the ad. However, at the very end of the ad came the disclaimer (in speeded up language): 2000 miles per year and $0.25 per mile afterwards. I had to listen to this ad several times to verify this. Can you imagine taking this deal, driving the normal average of 12,000 miles a year and then getting a bill for $7500 in excess mileage charges after 3 years? Had to laugh because after the ad came their jingle: "Trust Transitowne". Yeah, right...
 

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I work at Tom Wood Subaru in Indianapolis and the extra fee we charge as a dealership accounts for vehicle theft registry (lowers insurance premium), Safety First Pulse brake lights (soon to be required by law), and our service rewards program which include free tires and brakes for life (with limited exclusions).

This is all not to mention, as I have stated multiple times in other threads on this site, we have local competitors that advertise invoice pricing on all their vehicles yet require the payment of other huge fees... ie $899 doc fee. Be mindful of the quality of the business you're dealing with, frankly I have found that to be a more important deciding factor in who to deal with moreso than worrying about the nickel and dime aspects of vehicle pricing.
Not Falcone Subaru....no DOC fee.
 

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Because for most people in my experience, they merely look at "Sweet, new car for $300 a month!" and don't pay attention to the interest rate and length of loan. So they might think they got a great deal, when they paid $40K for their $28K car. Monthly amount is a only a part of the overall context or a purchase that involves financing a loan. Your dealership may be better than most, my experience is most are out to maximize profits and if that "takes advantage" of someone...why should they care?
There is no question selling vehicles based on a payment can be easier. It is a lot easier to discuss $10 a month than hundreds of dollars out of pocket. On the other hand, I think Kevin will agree that one would be amazed just how many people enter a dealership with no idea about how much downpayment and how much a month it will take to make the car they are looking at possible.

The salesman would be remiss in not discussing how the vehicle will be paid for at the beginning of the conversation. Five-thousand down and $300 a month is not going to buy a $40,000 car. I have though seen hours wasted chasing that thought when the salesperson did not have the proper discussion upfront.
 

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Just get each dealer to quote you an out the door price. That includes taxes, fees, etc. Then you have a single number to compare and don't have to care what the fees are called.

Get pre-approved for financing through your financial institution. When the dealer runs your credit and shows you the finance offers, you'll know if it's a good deal or to stick with your existing approval. Sometimes dealers beat it, sometimes they don't.
 

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Not Falcone Subaru....no DOC fee.
As of 5 years ago Falcone advertised that but actually charged an additional 1% of the total purchase price. I know because I have seen it in writing and I've heard from one of my customers who purchased a car from me instead of from falcone in a voicemail that the falcone sales rep left them explaining the 1% upcharge.

I have not worked at Tom Wood Subaru in over 5 years so I don't know wha may have changed within that time frame.
 
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