Dealer Fees??

First off, I totally disagree with doc fees. They are just as others have said, additional markup on the vehicle you are purchasing.

But here is why doc fees are popular with some dealers. It is an accounting issue, but also a greed issue.

Your dealer, or the creature you are forced to work with to purchase a vehicle doesn't really close the sale. His only job is to get you to buy the car. And considering the amount of back and forth between the sales guy and the sales manager to come up with a price for the vehicle, I have a hard time justifying the presence of this guy, but I digress.

So, the dealer does his thing, you agree on a price. At that point you are shuttled off to the finance office, usually one of many finance offices where you close the sale and work up all the financials. This includes financing, if any, extended warranty stuff and doing all the legal docs on the vehicle.

Some dealerships, seeing the finance staff as an expense, although necessary, decided to make the finance staff earn their keep, literally. So, doc fees were introduced, which bumps up the amount of money the dealership gets out of the car sale, but also is a monetary line item in their accounting which is attributed toward the finance department of the dealership. So, the finance department is no longer an expense, but becomes a revenue center.

Now, a dealership doesn't need a doc fee to take a finance department and make it a revenue center, they just need to determine how much of the dealership's keep of the vehicle sale goes to the finance department and that is that.

In short, nothing more than a way to make more money on folks who do not balk at the issue.

 

<div class='quotetop'>QUOTE(viking31 @ May 11 2006, 10:21 PM) [snapback]253868[/snapback]</div>

Thanks for the recommendation. Down here in South Miami, Kendall Toyota wants like $3000 over MSRP. I will definately try Earl Stewert.

By the way, there is an excellent car buying guide at http://www.carbuyingtips.com. I printed this out and am taking it with me to dealers.

 

My dealer, Joe Machens Toyota in mid-Missouri charged $50 document processing fee. But they also gave me a $50 "discount" on the car. I walked in with a check for MSRP and walked out with my car.

My dad taught me how to buy a car. I watched him do it perfectly when I was 15 years old. He determined the price of the car to the dealer (consumer reports). He went to the dealer, asked them what a "reasonable" overhead was (he already knew what it was). Then he made them an offer that allowed them to make some money but not too much. They wanted more, he walked out. Simple as that. Two hours later they called him on the phone, accepting his offer. We went back in with a checkbook. They started adding document handling fees etc. He looked the manager in the eye, set the record straight nice and loud in front of other customers and turned around and left. The manager chased after him saying it was a misunderstanding and acknowledged the agreed upon price. He paid not one penny more.

Rules are simple: Know what you want to pay. Make sure it is realistic. Set a total all inclusive price. Stick to it. The most important rule: BE PREPARED TO WALK and then do it!

Thanks Dad!