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Smart Shopper Smart Shopper-Archives Any Questions for a Car Dealer? 
16377 messages, Last post on Feb 11, 2006 at 4:59 AM
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I was at a Toyota dealer this past weekend looking to buy a 2001 Avalon. The negotiations were going well and I ended up with a great price. When the saleman began to fill out the buyer's order whee he lists the car with the options and my down payment (it's like a dealer standardized form) I saw that there was a $399 "processing and delivery" charge that is assessed automatically. I asked the saleguy to explain this fee but he just gave me a roudabout answer. I walked out because I can't think of what kind of service would justify this amount. I was afraid to sign thinking that this was a scam by the dealer to recoup whatever money they lose from potential negotiations. Is this fee justifiable and if not, how can I negotiate to get it lowered or off the application all together? Thank you. |
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| Processing fee is probably just a way to recoup money lost in negotiiations. However, if the fee was not included the final price would probably have been $400 higher. It is also reasonable to assume that a state inspection, Pre Delivery Inspection, Full detail, Full tank of gas, and various notery and other charges could total $399. Your graet price was probably at least $400 lower than any other price you got because of this fee. I'm sure you could attempt to negotiate it, just don't expect it to work. | |
| Who care if dealers are making money on the financing of a car loan. What's the difference if a bank makes the money or a dealer does. | |
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| What does it mean when a fleet manager says that they want to get "100% survey" when selling a car at fleet prices? | |
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Congratulations on having the sense to walk out of the dealer when they tried to add in that silly 'dealer processing fee' In the future, the best way to avoid this fee and other surprise add-on charges is to make an 'out the door' offer. For example, when we bought our last Honda, we offered $20,300 OTD. They accepted, we gave them a check for $20,320 ($20 for a fancy license plate), and drove the car home. |
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I am in the process of buying a new vehicle. The thing that is so the same in different dealers is this (or a variant thereof), "how much of a monthly payment can you afford?" Granted, I can understand why many buyers NEED to know upfront what the monthly payment is. It just isn't my style, because a purely payment-driven purchase leaves me wondering about too many things (actual price & trade-in, interest/lease rate, residual, etc.) What do you estimate the percentage of buyers who are monthly-payment based, vs someone like me who just let the payment comes out whatever it will come out, depending on the price, financing,trade-in, etc.? Just curious. /BOSI |
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good question. The answer really depends on the product line and location. I worked for 17 years in the car biz in a very wealthy part of connecticut. We never worked deals on payments. But now that I am in the Nashville area, very few consumers seem to have any interest in the selling price, they want to know "how much per month"....so I mold the process to fit that particular consumer buying patterns. Also, nobody walks into a MB dealer and says "I have $500 down, what are my monthly's"...but at a Hyundai store I would say that 95% of the buyers are payment buyers. Rich |
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| Whether it was GMAC, FOMOCO or a third party dealer "preferred" Bank. I always have my financing approved prior to visiting a dealer. Are people like me in the minority for all new car buyers? | |
Lease customers are by definition monthly payment buyers. Along with people who have never bought a new car before. If someone has never bought a new car before they might not realize that every $10000 you borrow is going to cost them approx $200-$250 a month depending on their credit (assuming 60 mo. financing). If a salesmen properly qualifies a customer they can find out how much someone knows about buying a car. If the guy you are talking with thinks he can buy a $40,000 vehicle for $500 a month with nothing down you better switch him to a different vehicle rathger than have him pass out when you tell him his payment is $900 a month. As a general rule the more expensive the vehicle the less likely someone is to finance.
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are 70% of all customers. The rest are either cash buyers or difference buyers. Hopefully you will know the difference between them all. When it is all said and done, its really payment. For example, we are running 2.9% for 4 cyl Accords this month, thats for 36 months...equalling about a $600 per month car payment. So, even though 2.9% sounds WONDERFUL the reality is that most cannot afford it. It is true, finding what a customers budget is can be a good way to budget a vehicle. However, the majority of people will give you the "about 250 per month" and that opens up to a premature discussion of interest rates. I try as much as I can to show the car, THEN sit down and discuss HOW they want to buy their car. |
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