Dealer Advertising/Marketing Fee???

Never believe anything any dealer says about any other dealer. Toyota doesn't charge such a fee. It sounds like you need to call a few other dealers.

 

The "advertising fee" is a usually hidden fee that the dealer has to pay to its Toyota sales region -- it's mandatory. I've been told this by Prius Team, who also said that it cannot be waived or negotiated down.

So notwithstanding the notion of "dealer invoice", true dealer invoice (before holdbacks, etc.) is really the publicly known "dealer invoice" plus the usually hidden "advertising fee".

I've heard of that $991 advertising fee in Texas. As advertising fees go, Texas has either the highest or among the highest fees in the country.

In comparison, the advertising fee in New York for my Prius Priority order was $430, which I think is either the lowest or among the lowest fees in the country.

 

Hi Greenbirder - I'm also on the Priority Program here in the Gulf States Toyota Region. My Dealer Ad Fee is also $991. That confirms what others have already said - this fee was determined on a region by region basis. I've seen at least one other person post from another region with an equally high fee. Too bad we don't live in Boo's or Rick's regions, but thems the breaks. The good news is, we are getting exactly the cars we want (assuming you were going to order that model and package anyway), in the color we want, delivered to our door, without any haggling and without having to chase it down or have a dealer trade around for it. We are also at or near the front of the line and still getting a better deal than any non-priority list person has been able to find so far. Of course, we could always take our chances that the 2010s will start piling up on dealers' lots due to the bad economy, and they'll start giving them away at invoice, but I don't feel like making that bet myself, especially with gas prices moving up again and the economy looking like it's getting back on track. Springing this regional fee on us after they had already told us a lower price was a mistake on the program's part. With the benefit of hindsight, they could have managed expectations better by simply waiting till they had the total price. They were trying to be helpful by giving us as much information as they could, as soon as they could. Personally, I'm still happy with the final deal, and with how much easier this is going to make the whole car buying experience. I'm thinking a drive down to South Padre's beaches and back would be just about the right amount of miles for my break-in period! Of course, if I were basing my decision on television ads, I might have to buy another car entirely!

 

By the way, I just checked your order. Let me just say what excellent taste you have. However, I call dibs on the first one off the boat! :rockon: Has your dealer given you an ETA?

 

Mine was less than that in my region, but still an add on to the Priority price. But, we are getting a great deal and someone has to pay for all the guys that went to the Detroit Auto show for the unveiling and the Priority events around the country..... those shirts we won and fancy appetizers we ate don't grow on trees! Those promo events must have cost the big bucks so it is reasonable for us who benefit to somehow pay.

My dealer says the window for delivery is May 25 to June 3! Also said that Toyota wants me happy and to get my car before any others allocated to the dealership. No extra fees, I was treated with respect (he said, "you must be someone who is influential to others to be a Priority person!!), and the GM (general manager) was very interested in the PriusChat group!

Cool!

Lee

 

These aforementioned dealer or region "fees".
Advertising - marketing? I consider them repugnant.
$430? $500? $991?? Are you kidding me?

fee:
[noun, verb, feed, fee⋅ing. –noun

1. a charge or payment for professional services: a doctor's fee.
2. a sum paid or charged for a privilege: an admission fee.


So it's a "privilege to purchase a vehicle from a retailer? What other major consumer product sales tack on absurd fees as this? Any costs the region or dealer sustain are simply a factor in operating their business.

If they can get away with it, and buyers blindly agree to outrageous $$$ pile-on tactics as this, behaviors as this will continue. I for one will not be part of it and take my business elsewhere. And honestly if all Toyota regions and dealers manipulate Prius customers with these distasteful practices, I would reluctantly consider alternatives.

 

Try to keep in mind that we are not talking about a fee on top of MRSP. In this case, people are still getting a good out the door price. As others have said, the fact that regional ad fees exist is not really a surprise, anymore than the existence of dealer holdbacks, etc. It's common throughout the industry. It's just a little more exposed in this situation than is normal.

 

"Try to keep in mind that we are not talking about a fee on top of MRSP."

As I have not seen a '10 Prius Toyota or "Dealer" window sticker yet - are you saying that this fee is baked into the Toyota MSRP, and not a standalone added fee to the dealer's window sticker? So what are the references below as to the multi $100s in Ad fees????

 

Start considering then, as this is standard Toyota practice. Maybe Honda doesn't do it. Chrysler has some good deals at the moment.

Tom

 

Since the dealer did no advertising or marketing to make this sale, I'd say they don't deserve a penny. Why the heck is a dealer involved anyway?

TMS USA is presumably doing the Priority Program to get word-of-mouth advertising from early adopters who are already Prius fans; screwing the customer is a really good way to get them to turn the cars down and lose all the goodwill you've built up already. TMS should pay any additional marketing fees.

 

The dealer doesn't *get* the fee, the dealer has to *pay* the fee. This is a fee charged by the region against dealers in that region. The dealer recovers the fee by passing it along to the buyer.

Tom

 

Once again we have a tempest in a teapot. This kerfuffle is nothing more than semantics. The term Toyota has chosen is causing all this moral outrage and accusations of price gouging and profit taking. In practice it is simple and understandable:

A dealer's cost for a Toyota product is set by Toyota. The cost consists of the base cost of the unit plus several fees or additional charges. These fees and additional charges are not rolled up in the base cost because they vary by location. Transportation is a good example. It costs more to ship a car to some locations than others. Another varying cost is this advertising fee. For reasons known only to Toyota, this fee varies from on region to another, so it is charged regionally. If it weren't, we would still pay it, but it would be rolled into the base cost. This is not a tacked-on dealer profit, but part of Toyota's cost and profit structure. They will get their pound of flesh regardless of what it is called.

Tom

 

This is total BS. The dealers started doing this a while back and now its accepted as a real fee. Its not. You don't have to pay it. Its as ridiculous as going to the grocery store and them charging you extra for bags. Its the cost of doing business! Another thing in Houston, that dealers are tacking on is the inventory tax, which they have to pay, so they add it on and say its an official fee. Its not either. I wonder where the salesmen are on PC? Why are they chiming in on this thread?

 

Actually its set by the middle men. In Texas its Gulf State Toyota. And they try to make as much money as they can by loading up the cars with all kinds of over priced add ons.

Its an archaic system that does disservice to the buyers.

 

Boo Said[
" In comparison, the advertising fee in New York for my Prius Priority order was $430, which I think is either the lowest or among the lowest fees in the country."

I too am in New York and had the #430.00 fee on my Prius Priority order.

The dealer called yesterday and asked if I wanted to come in an discuss the order. I said not now But when the car comes in. He was very pleasant.

 

If you are sure that an advertising fee is normal, then why is there no such fee in some parts of the country like here in Colorado? There is a "Dealer handling fee", set by each dealer, that was $350.00 the last time I bought a car. The other dealer in town had their fee set at $300.00 but offered less for my trade. It would be like Best Buy advertising a Sony HDTV for $2000 and then tacking on an extra $200 for advertising. Deceptive.

Roy

 

Yes, dealers are charged an advertising fee by Toyota, which they pass on to you. the fee varies by region, so I can't say if $900 is inflated or not.

The fee is irrelevant. It doesn't matter whether it is on top of MSRP or "within" MSRP. The only thing that matters is the total price.

The minute you start haggling over particular fees, you are fighting on the dealer's turf. You are negotiating within his pricing rubric. He'll be able to explain any particular fee. So what? If the fee's are legitimate, he'll make less profit on the sale, or he'll pay for them by fleecing somebody else! There is no law requiring a dealer to sell at any particular price.

The bottom line is, nobody is forcing you to buy a car at the dealer's price, and nobody is forcing the dealer to sell you a car at your price.

You've just got to set a price that is fair, that some dealer will accept. My formula is to take the invoice price, subtract holdback, add a few percent for profit, and add the destination charge. Others might use a different formula. The dealer doesn't care. Just like me, all he cares about is the final price.

Some people will pay anything for this car, and the dealers want to take advantage while they can. If you want to be driving a Gen III in June, expect to get, in my opinion, fleeced. The "I WANT IT NOW" crowd doesn't view it that way. To each his own.

 

I think for some people there is some confusion about whether this discussion applies to all sales or just the Prius Priority Program, who is actually getting the dealer ad fee, and whether the end buyer is somehow getting screwed.

The OP was only discussing the e-mail quotes people got who were lucky enough to get on Prius Priority Program. The program sent out an early e-mail with the initial numbers, warning that there would be additional regional or dealer fees. They then sent out a later e-mail quote with the full, final numbers and fees. Everyone had the option of canceling or accepting their order based on the final numbers. The final numbers (total out the door prices) are still below MSRP and still better than any other dealer offer that's been mentioned on this site. The only pain I suffered was that an unbelievably great deal on a brand new model car instead turned into just a really good deal on a brand new model car. If Toyota had not been so forthcoming, I wouldn't have suffered any pain at all.

None of this will matter to the average buyer. They will never see something called "Dealer Advertising Fee" on their invoice or quote. It exists on every car sale, but you never see it, just like you never see dealer holdbacks, etc. It is buried in the cost/price structure among Toyota, the regional distributor, and the dealer. It is a cost of being a dealer, and goes to the regional and/or national ad buys, etc. As others have pointed out, the term "Dealer Advertising Fee" is a misnomer. Normally, it is actually a fee paid by the dealer to the distributor. Maybe part of it also goes to Toyota for national advertising, I don't know. The bottom line is, there is no reason for me to care who gets what part of the pie (other than possibly helping me negotiate had this been a normal haggle transaction).

The priority program was an unusual drop ship promotion and we don't really know for sure who's making what. Somehow, Toyota, the distributor and the dealer all have to and deserve to make money on the sale. The only thing that matters to me is my final out the door cost, which in my case happens to be a good deal.