My campaign to eliminate or combat dealer "doc fees"
10-10-12, 01:31 PM
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My campaign to eliminate or combat dealer "doc fees"
Hi all,
This topic always seems to come up in my sub-forums where people talk about their car purchasing experiences.
Recently, it came up in another thread in the RX-Third Generation" forum. It seems to ally to all Lexus purchases, not to mention other manufacturers as well.
I felt that instead of leaving this discussion to a specific thread, I thought I'd create a separate thread. Hope you all agree.
First of all, documentation fees seem to be a relatively new (past few years at most) line item being added by dealers almost everywhere. The thing to keep in mind is that it is not a mandated fee. Many states limit or cap the fee. No state, at least to my knowledge, mandates it. If a dealer tries to say that it is a state-mandated fee, I'd challenge them to produce an official state policy. As a general personal policy, I never believe anything a car sales person says. I really mean that.
Doc fees are just another way for a dealer to add on extra charges, just like paint protection, fabric guard, window tinting, etc.
They may tell you that they have expenses having to do with registrations and titles. You can then say, but what about your expenses for heat and air conditioning, snow-removal, lawn mowing, rent/mortgage/interest, health benefits for staff, etc? Should they charge you a facility maintenance fee? Its just the cost of doing business. It should be factored into their pricing structure and how low they go on prices.
Every car that I bought in the last 5 years, I have successfully fought the doc fee. After we come to an agreement on the price, when they bring up the doc fee, I say, "no", that wasn't what we agreed to. We agreed on a price. Most dealers now have the fee printed on their purchase and sales agreement. When I see that I always tell them to reduce the agreed-upon price by that fee. Once they hear you say that the deal is off unless they do so, they will do so. Only one time, they wouldn't, but agreed to reduce it by half. In that case, I negotiated such a good deal I didn't mind paying a small ($175 in that case) fee.
The key is to know that you can fight back. Just say no and insist on a price adjustment or the deal is off. After spending all that time with you and going this far, they almost always agree if you are very firm and willing to walk over a $500 (or whatever) fee. Surely $500 in your pocket is worth fighting over, regardless of the price of the car.
Now, back to the reason for the fee in the first place. Its primarily due to the fact that most consumers are not accustomed to negotiating. So the dealer can get away with it. I don't
really blame them. Its free enterprise. A business charges a price that the market will bare. If enough people agree to pay it, they win, and have developed another revenue stream.
Since most of us on this forum are educated consumers (or else we wouldn't be subscribers here), we have control of the situation.
Let's all fight this together.
Steve
This topic always seems to come up in my sub-forums where people talk about their car purchasing experiences.
Recently, it came up in another thread in the RX-Third Generation" forum. It seems to ally to all Lexus purchases, not to mention other manufacturers as well.
I felt that instead of leaving this discussion to a specific thread, I thought I'd create a separate thread. Hope you all agree.
First of all, documentation fees seem to be a relatively new (past few years at most) line item being added by dealers almost everywhere. The thing to keep in mind is that it is not a mandated fee. Many states limit or cap the fee. No state, at least to my knowledge, mandates it. If a dealer tries to say that it is a state-mandated fee, I'd challenge them to produce an official state policy. As a general personal policy, I never believe anything a car sales person says. I really mean that.
Doc fees are just another way for a dealer to add on extra charges, just like paint protection, fabric guard, window tinting, etc.
They may tell you that they have expenses having to do with registrations and titles. You can then say, but what about your expenses for heat and air conditioning, snow-removal, lawn mowing, rent/mortgage/interest, health benefits for staff, etc? Should they charge you a facility maintenance fee? Its just the cost of doing business. It should be factored into their pricing structure and how low they go on prices.
Every car that I bought in the last 5 years, I have successfully fought the doc fee. After we come to an agreement on the price, when they bring up the doc fee, I say, "no", that wasn't what we agreed to. We agreed on a price. Most dealers now have the fee printed on their purchase and sales agreement. When I see that I always tell them to reduce the agreed-upon price by that fee. Once they hear you say that the deal is off unless they do so, they will do so. Only one time, they wouldn't, but agreed to reduce it by half. In that case, I negotiated such a good deal I didn't mind paying a small ($175 in that case) fee.
The key is to know that you can fight back. Just say no and insist on a price adjustment or the deal is off. After spending all that time with you and going this far, they almost always agree if you are very firm and willing to walk over a $500 (or whatever) fee. Surely $500 in your pocket is worth fighting over, regardless of the price of the car.
Now, back to the reason for the fee in the first place. Its primarily due to the fact that most consumers are not accustomed to negotiating. So the dealer can get away with it. I don't
really blame them. Its free enterprise. A business charges a price that the market will bare. If enough people agree to pay it, they win, and have developed another revenue stream.
Since most of us on this forum are educated consumers (or else we wouldn't be subscribers here), we have control of the situation.
Let's all fight this together.
Steve
10-10-12, 04:45 PM
#3
Great subject. One must remember the Dealer is there to make all the money he can, however he can. The more profit the bigger the salespersons commission. The Dealer documentation fee is just another DMU. Simply refuse to pay it or negotiate it another way. So long as your out of pocket expense is the same as what you negotiated then all should be well. You could care less how the sales closer gets there. More for you trade in, reduce the price, or whatever. Just refuse to pay. There are only two things that are non negotiable and that is death and taxes. Good luck!!
10-10-12, 04:54 PM
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Usually, its not that simple. Its not till you agree on a price that they then bring out the paperwork, which only then shows the Doc fee.
I guess what you can do, upfront, when you make your offer, tell them that it will include any and all fees, except, of course, tax, title, etc (state-mandated) fees.
Steve
I guess what you can do, upfront, when you make your offer, tell them that it will include any and all fees, except, of course, tax, title, etc (state-mandated) fees.
Steve
10-10-12, 07:34 PM
#5
While your intentions are honest, it is essentially a big joke.
If you do not want to pay doc fees, or any other charges beyond your negotiated price, then you should basically agree to purchase at fixed price. If you retain the right to negotiate the price of the vehicle, then they also consequently retain the right to introduce fees into the process.
If you do not want to pay doc fees, or any other charges beyond your negotiated price, then you should basically agree to purchase at fixed price. If you retain the right to negotiate the price of the vehicle, then they also consequently retain the right to introduce fees into the process.
10-10-12, 09:13 PM
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While your intentions are honest, it is essentially a big joke.
If you do not want to pay doc fees, or any other charges beyond your negotiated price, then you should basically agree to purchase at fixed price. If you retain the right to negotiate the price of the vehicle, then they also consequently retain the right to introduce fees into the process.
If you do not want to pay doc fees, or any other charges beyond your negotiated price, then you should basically agree to purchase at fixed price. If you retain the right to negotiate the price of the vehicle, then they also consequently retain the right to introduce fees into the process.
10-11-12, 01:27 PM
#7
Lexus Test Driver
Usually, its not that simple. Its not till you agree on a price that they then bring out the paperwork, which only then shows the Doc fee.
I guess what you can do, upfront, when you make your offer, tell them that it will include any and all fees, except, of course, tax, title, etc (state-mandated) fees.
Steve
I guess what you can do, upfront, when you make your offer, tell them that it will include any and all fees, except, of course, tax, title, etc (state-mandated) fees.
Steve
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10-11-12, 01:29 PM
#8
Lexus Test Driver
What if there was a fee, after you negotiated the price of the car, that was for "Key Delivery Fee - $500. Sure, you can have your car for that price, but it doesn't include the keys." Wouldn't you be upset? The point is, these "fees" show up after the price is negotiated. They could add endless fees on afterwards if they felt you'd let them - lighting, parking, storage, vacuuming, washing, etc.... So either "the price is the price", or "the price is flexible, just let us add on a few more fees to cover what we didn't negotiate into your deal". Why would you be OK with "doc fees" but you probably wouldn't be OK with "washing fees"?
10-11-12, 02:41 PM
#9
Lexus Test Driver
LOL at "car pick up fee."
Yeah, the whole fee thing is ridiculous. I hope you have some luck with this. While we may be the educated ones here who know better, I'd estimate 80-90% of the general buying public doesn't know and ends up helping the dealer pad his profits.
Yeah, the whole fee thing is ridiculous. I hope you have some luck with this. While we may be the educated ones here who know better, I'd estimate 80-90% of the general buying public doesn't know and ends up helping the dealer pad his profits.
10-11-12, 03:48 PM
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I addition, never believe anything a car sales person says. I mean anything. These people, by and large, are not there to help you in any way.
Happy car buying!!!
Steve
10-12-12, 02:06 AM
#11
I walked on a car deal over a $500 documentation fee on a used $8000 Mazda Protege5 at the Mazda dealer a few years ago. Absolute B.S. since they put this charge on the sale after we agreed on a price.
They knew they weren't going to make any $$$$ off me since this was a cash deal. I told the manager I wasn't going to pay it, that $500 was about 6% of the whole damn price of the car. Pissed me off real good, don't buy a car at Nelson Mazda in Nashville.
They knew they weren't going to make any $$$$ off me since this was a cash deal. I told the manager I wasn't going to pay it, that $500 was about 6% of the whole damn price of the car. Pissed me off real good, don't buy a car at Nelson Mazda in Nashville.
10-12-12, 03:14 AM
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I walked on a car deal over a $500 documentation fee on a used $8000 Mazda Protege5 at the Mazda dealer a few years ago. Absolute B.S. since they put this charge on the sale after we agreed on a price.
They knew they weren't going to make any $$$$ off me since this was a cash deal. I told the manager I wasn't going to pay it, that $500 was about 6% of the whole damn price of the car. Pissed me off real good, don't buy a car at Nelson Mazda in Nashville.
They knew they weren't going to make any $$$$ off me since this was a cash deal. I told the manager I wasn't going to pay it, that $500 was about 6% of the whole damn price of the car. Pissed me off real good, don't buy a car at Nelson Mazda in Nashville.
Everyone should do exactly what you did.
Congrats.
Steve
10-12-12, 05:38 AM
#14
What I find works best for me with my car purchases and the ones I help friends/family with is that when it comes down to price I politely ask them that when we pass numbers back and forth that those numbers are what I'll be writing a check to that dealer for. I'll pay any tax, title and reg separately to the state. So you don't need to tell me your fees, don't even tell me what the car costs. What ever we negotiate on for a price is the amount that I will have a check made out to the dealer for if I buy from them.
Selfishly it just makes it easier for me to compare prices between dealers, plus for some dealers I've noticed that it puts them a little out of their comfort zone.
To me it doesn't matter what the fee is, just the bottom line. YMMV
Selfishly it just makes it easier for me to compare prices between dealers, plus for some dealers I've noticed that it puts them a little out of their comfort zone.
To me it doesn't matter what the fee is, just the bottom line. YMMV
10-12-12, 07:18 AM
#15
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Depends on what your goal is. I have a RELATIONSHIP with my dealer so I am not going to bicker with them over $500 which will be spread out over years. Cause when its time for them to do me a favor when something is out of warranty etc etc, they WILL remember me being a cheapass!!
While I agree these fees have grown, popped up, so has buying a car with huge incentives, at invoice, below invoice. Just Wednesday I talked to my dealer about maybe buying a vehicle and they knocked 6 grand off without me even asking. I am not going to bicker over a $500 doc fee.
I always recommend developing a relationship with a dealer if possible. They have HUGE leverage to help the consumer out in a variety of situations.
To the O.P I will say I appreciate your efforts to help consumers. The advice is not for me though.
While I agree these fees have grown, popped up, so has buying a car with huge incentives, at invoice, below invoice. Just Wednesday I talked to my dealer about maybe buying a vehicle and they knocked 6 grand off without me even asking. I am not going to bicker over a $500 doc fee.
I always recommend developing a relationship with a dealer if possible. They have HUGE leverage to help the consumer out in a variety of situations.
To the O.P I will say I appreciate your efforts to help consumers. The advice is not for me though.