I had to travel 1000 miles to buy my first car. At the time Toyota dealers in the Southeast didn’t have Camrys with optional ABS (1994). Why? Supposedly you didn’t need it. Unless you bought the top of the line model, which cost an extra $3000. Thanks to this pearl of wisdom from Toyota’s Southeast distributorship, I went to New Jersey where my brother and I bought respective Camrys. Should I have bothered? I’ll put it this way. Back in the Clinton era this regional cabal offered a really nice Scotchguard protection deal that had the word ‘Toyo’ in it along with windows etched with your VIN and about $7 worth of hocus pocus that no one really cared to have. The surcharge? $699. They all did it. After my third or fourth visit to the local new car rodeo, I said “screw ’em” and headed to [New] Jersey.
Fast forward 15 years and the bogus fee world of new car selling is alive and very well. For every lowball price advertised in the newspaper there are documentation fees ranging anywhere from $299 (for a few pieces of signed paper) to $799 (for a few signed pieces of paper) that drive the final cost to the stupid-sphere. One dealer in Daytona Beach advertised a 2009 Hyundai Accent for $6990. In the small print was ($3000 customer cash, $799 documentation fee) and a full paragraph of exemptions and supplementation. The final cost for a Hyundai Accent with no A/C? How does $11,400+ sound?
It always pays to know the real cost of whatever you buy. Title and tag costs are unfortunately an area where profits, smoke and mirrors are commonplace. The real costs for where I live? In my state of Georgia it is $18 to process a title, approximately $2 to provide a temporary tag and anywhere from $5 to $25 to get someone to physically go to the title office for you. That’s it. So far as I know no finance company has ever charged a dealership for the few pieces of paper needed to sign a finance agreement. The blank ones with pages worth of small print usually cost no more than $1.
My advice to anyone shopping for a car, new or used, is ask your DMV what the actual costs are for title processing, add maybe $30 for the temporary tag, and make sure your final out the door price is negotiated BEFORE you ever get to the dealership. If they won’t work with you or play the “let me ask the manager” game, go to the private owner or eBay. Life’s too short and wallets far too thin these days to contribute to a bogus cause.
Amen.
And regardless of how much money your putting down, don’t finance the damn documentation fees in the loan. That’s just effin stupid. Lets pay interest on the DMV fees for the next 5 years, yeah!
When I last bought a new car, I settled on a Honda Fit. This was the summer of $4.25 gas, and there was a several month wait before the car we ordered came in. At the time of the order, I was assured that there would be no upcharge for “dealer availability” or some other such thing, and no mandatory dealer options.
When the car came in, they stuck to their word. I paid full sticker (not surprising when I had to wait 4 months for the car due to our color/interior/transmission choice coupled with limited supply and high demand) plus the dealer options we had discussed in advance, but no more.
Therefore, a hearty well done for Bob Rohrman Indy Honda.
My favorite bogus fee was the loan insurance in case both me and my wife (cosigned on the loan) die before paying off the loan.
Isn’t that insurance of the interests of the bank holding the loan in case we would be upside down on the loan at the moment we die?
jpcavanaugh:
Funny that you mention Bob Rohrman, he just came up in obscure legal news today:
http://www.abajournal.com/news/ill._auto_dealer_sues_doc_in_rare_tort_claim_over_wifes_alleged_affair/
ttacfan – are you sure that isn’t the kind of insurance where if one spouse dies the loan is paid off? I (sadly) had that happen to a friend of our family. Three months into their new car purchase, the husband died of a heart attack. The wife didn’t have to make anymore payments (but kept the car of course)
While there are car dealers there will be bogus fees. I bought a MINI for my wife about 5 years ago and the dealership tried everything from “special protective coatings” to “standard preparation fees”. Stand your ground and walk if you have to – they usually change their minds.
I think motorcycles are even worse.
There are 3-4 dealerships nearby me that I _KNOW_ play this game.
New $10,999 msrp bike comes out and they have last years model for $7999. Big discount right?
Don’t forget title/tax/license/doc/crate/prep fees.
Now you are looking at over $10k.
I bought my new Subie by asking for OTD prices w/ options I wanted. Probably 1/2 the dealerships said to come in to negotiate…another 10-15% gave me MSRP, I got quotes from a few & the rest I asked “can you beaet price $x” and they swore/hung up/or said I was lying about the quote I had.
Attaway, Steven. Those gouging surcharges really chap my posterior. I really don’t know why Toyota allows their distributors to do that.
When I saw the words “to $799 (for a few singed pieces of paper)” at first I thought “singed” is a typo. Then I realized it’s really not: the customer is definitely getting burned.
I thought there were truth in advertising laws that dictated the font size in those ads.
Typically you’ll see in 3″ high red letters:
YOUR COST: $17,995 *
and in teensy-weensy tiny barely legible print burried at the bottom of the full page ad:
*After $3000 cash/trade, Farm Bureau rebate, College Grad rebate, Military Service rebate, Owner Loyalty rebate. Must be financed through us. $799 doc fee.
It’s reason no. 10,520 that most normal people consider car salesmen to be lying theives. Their whole business model is based on this kind of deception.
What do you think would happen if you walked into Best Buy to buy a $799 televison and they said “well, that’s $799 for the TV and then $150 for us to take it off the truck, plus another $75 for us to write up the sales paperwork?” You’d walk out and they damn well know it.
That’s the bad news. The good news is that when negotiating a deal you, the customer, have the power. I think the easiest thing to do is start off by saying “I only negotiate out-the-door price. I don’t care how you write it up, but when we come to an agreement, I’ll pay the agreed price plus sales tax and that’s it.”
@Sammy B
It sounds about right. But I’m getting fuzzy on the details – it had been 13 years or so ago and me and my wife were in late twenties, so chances of us dieing of natural causes were slim.
Come to think of it, I believe there were two levels of that fee: if both die (cheaper) and if any one of us die (more expensive).
“Toyota’s Southeast distributorship”
Ahh, that would be JM Family Enterprises. I used to work for them. Interesting company. They are one of two privately owned Toyo distributorships in the country. They would order their cars from Toyo and when they arrive inthe port of Jacksonville, FL they would be prepped at the processing center. What would they do? Well, they would take a razor knife and cut off the cloth upholstery from the seats and then redo it in leather. Why not just order the leather to start with? Only thing I can think of is they can charge more for it. They would pull out the base stereos and the plain wheel covers and upgrade them. Southeast Toyo’s look different than any other Toyo’s in the country. It’s a sweetheart deal. They offered us employees Toyo’s for $100 over invoice. Glad I didn’t take them up on it. They laid me off after two years, during which time they were rated by Forbes as one of the 100 best places to work.
I used to sell cars. Know what I said when some customer asked what the doc fee was for? Profit, I said. Just like my manager told me to. And if you don’t want to pay it, fine. No deal is worth loosing over $300.
P.S. It doesn’t matter which part of the deal you don’t finance, whether you want to pay cash for the doc fee or the leather interior or the nav system. Balance on the loan is all the same once the papers are signed.
P.P.S. Life insurance is so people can pay off the debts of their dead loved ones. Life insurance in the form of loan insurance is overpriced term life insurance. And yes, it pays out if the owner dies.
Fees are bogus just like the “Rust, Lust and Dust” dealer add-ons to the vehicle. Nice fat profits for the dealer, not so good for the uninformed or just plain dumb buyer……..
ONLY negotiate on out the door prices.
“I don’t care if you charge me $1 for the car and $25,000 to give it a tank of gas, just tell me the out the door price”.
When I was just graduating from University, and buying my first new car (Honda Civic SiR coupe, back when those were a pretty potent sport compact) the dealer was trying hard to sell me loan insurance.
My response: “I’m a 22 year old male purchasing a new Honda SiR. Statistically speaking if I die in the next 5 years, I took the car with me…”
I’ve done some work with “JM Family” and can tell you they are only after one thing (drum roll): MONEY! They offer all kinds of warranties and add-ons all designed to remove dollars from your pocket and onto dealers P&Ls statements. They actually have several separate businesses – check the links at http://jmfamily.com/Business/Overview.aspx to see how many fingers they got in the cookie jar.
As stated by Steven & windswords: SE Toyotas are different, they have options and combinations you can’t get anywhere else. Ever see a Camry with gold logos, a rear deck spoiler and Enkei rims? Its not a “pimp my ride” special from Peps Boys, its just a SE Toyota. They sure don’t come from the factory like that, however your local SE Toyota dealer has them on the lot, brand new, (already prepped) with the sticker in the window to prove it! Wild stuff huh?
I really can’t believe what they do is legal, if you buy a Toyota in the SE United States JMF get their cut, they are between you and the factory – an automatic middleman that controls the flow of vehicles & parts to your neighborhood Lexus/Toyota/Scion dealer. And there nothing you can do about it… well unless you are willing to drive to NJ ;)
Reminds me of when I was looking for a Camry or Altima–new or used, it didn’t matter–in 2003, and wanted one with the optional ABS and side airbags. In both cases, it was explained that it would be a special order on a new car. I couldn’t just pick something off the lot. At the Toyota dealership I was directed towards the Avalon, which had them standard. At the Nissan dealership, I was directed towards the Maxima, which had them standard. Both were more than I wanted to spend, and I eventually located a used Altima with the appropriate options. One of the better cars I’ve owned.
Too bad these poor dealers are getting squeezed out by GM and Chrysler. They are only trying to scratch out an honest buck.
I’m looking forward to the day when the state franchise laws are changed and cars can be sold directly from the mfg to the customer. This could be done over the internet and through big box retailers similar to Ikea or Costco. There would also still be some full service dealers that charged more for those that need the help, or want a concierge type service. Test drives could be charged by the hour.
Servicing would be separate and available at any qualified car repair center just like now.