Are Processing Fees at Car Dealerships Negotiable?

[DisGirlAllie]

So I bought a car yesterday and ultimately ended up getting a great deal (and am very happy with my purchase!), but I was curious if others had a different experience. I went to three dealerships in total, with the first two indicating that the processing fee was negotiable. However, the third was vehement that it was absolutely not negotiable, as it would make them liable for discrimination (which makes sense, though begs the question then of why anything is negotiable). It wasn't enough to deter me from purchasing my car from them (I got them to waive pretty much everything but taxes and registration, plus the processing fee), but I was curious if the first two were taking me for a ride or it is actually negotiable at some dealerships.

So, long story short, have dealer processing fees been negotiable in your experience? Or, consistently across the board, have they been non-negotiable?

 

[Cannot_Wait_4Disney]

Every single thing is negotiable. If the dealer wants to sell the car badly enough, he'll either lower it or eliminate it. If not, he won't.

That said of course that means that if you're buying a car on a 6-9 month waiting list, that dealer probably doesn't need to sell the car badly enough that she is going to want to negotiate.
And make sure you don't lose your way in the forest concentrating on a single tree either.

 

[Disney1fan2002]

Anything with a car is negotiable. Now, whether the dealership wants to negotiate is another story. That is when you walk away and tell them you will find someone who will negotiate.

What people over the years have not realized, when it comes to buying cars, the buyer has the upper hand. If a dealer does not want to meet you halfway, there is always another car dealership that wants the sale. I will not buy a car from any dealership that has "firm" pricing. Non-negotiable prices. They say it is the rock bottom price and no need to negotiate, but I don't believe it.

I bought a brand new 2016 Kia Soul, fully loaded for $3300 under the sticker price. This was back in 2015. I got it for that price because I walked away. They told me they could absolutely sell it to me for the price I wanted, but when they gave me the contract, that price was on the top line and they added this, that and everything else, so the bottom price was pretty much the sticker price. When I pointed it out to them, they said those were fees they had no control over and they were already taking a loss on the car. I apologized and stood up. Told them I guess I can't afford the car and I certainly did not want them to take a loss. I walked to the door, I had the door open to step out when they called me back. The gave me the car and the price I said was now on the bottom line. Amazing!! It was the 1st time I did anything like that and I was so proud of myself. It taught me that if you are willing to walk away, you can usually get them to agree to your terms. If not, find someone who will.

 

[JimMIA]

Every single thing is negotiable.

^^^^^ THIS is Rule #1 about understanding car purchasing.

 

[sam_gordon]

So I bought a car yesterday and ultimately ended up getting a great deal (and am very happy with my purchase!), but I was curious if others had a different experience. I went to three dealerships in total, with the first two indicating that the processing fee was negotiable. However, the third was vehement that it was absolutely not negotiable, as it would make them liable for discrimination (which makes sense, though begs the question then of why anything is negotiable). It wasn't enough to deter me from purchasing my car from them (I got them to waive pretty much everything but taxes and registration, plus the processing fee), but I was curious if the first two were taking me for a ride or it is actually negotiable at some dealerships.

So, long story short, have dealer processing fees been negotiable in your experience? Or, consistently across the board, have they been non-negotiable?

I just bought a car a couple of months ago and ran into this question while doing my research. IIRC, if a dealer charges processing fees, they have to charge everyone the same processing fee. So if you and I both go to buy a car from a dealer and they charge me $599 for processing, they HAVE to charge you the same amount (I believe that's a state law, but possibly different elsewhere).

HOWEVER, in all honesty, the only thing that really matters when buying a car is the total price (including taxes and fees). So, you go look at a car that's listed at $20,000, the state charges 6% tax, and there's a $599 processing fee. Some quick math and you get $21,799. I'm looking at a different car that's also listed at $20,000, but I negotiate the cost of the car to $19,401. Add 6% tax and the $599 processing, and you get $21,164.

So you can negotiate the processing fee (by subtracting it from the cost of the car), and yet pay the processing fee.

 

[spiders]

So you can negotiate the processing fee (by subtracting it from the cost of the car), and yet pay the processing fee.

Yes -- basically this is what I think the actual truth is. You're going to have to accept an invoice one way or another with that ridiculous $599 document fee but of course, there are other areas they can reduce the overall cost from. Honestly, I've always gone to the dealership with only wanting to talk about the drive out price minus actual sales tax.

One of the things I found most irritating the last time I went car shopping was dealing with dealer added garbage. So many dealerships are now part of a larger corporate structure so I found it across numerous brands. But the $499 dealer package which includes pin stripes and wheel locks (Oh & of course the paint protection package! I always think of William Macey in Fargo everytime) . I personally don't like pin stripes and I knew that was one thing that was definitely 100% pure profit on their side by "value adding" the car. He said it's already on the car. I said "obviously...but I don't want them and I can wait for the next load of cars to come in from the factory before you add all that stuff." They ended up peeling them off. I don't know if they thought that was going to make me say, "Oh wait! Fine! Leave them on" but it was kind of funny because right before they started, they made eye contact with me as if I was going to give in.

 

[Jimmy Mouse]

I do work for a lot of dealerships and have personal friends at one of the largest dealerships in GA. I can't say how it is for new cars but I do know this one dealership has a $800 dealer fee on all used cars to cover inspections, oil change, tires if needed etc. I have seen the bottom line and they may be the one in a million but the $800 is exactly how much they mark up the car. They take trade ins just to make a sale. They sell the used cars to make money on the interest, not for a profit on the physical vehicle.

 

[RamblingMad]

Most dealers set these to the state legal limit.

 

[ronandannette]

^^^^^ THIS is Rule #1 about understanding car purchasing.

And to this I will add that whatever a dealer agrees to, the bottom-line will remain whatever they need/want it to be. No matter how it's sliced-and-diced or what aspects get discounted or waived. If you look at it the same way and are happy with the final amount - go ahead and sign the papers. If not, as has been mentioned here, there's always another dealer waiting.

One caution though - if you get really fixated on something specific like this processing fee for example, you may lose objectivity on the deal as a whole. I know more than one person who has told stories of getting stale-mated at one dealership and going to another only to come away actually spending more than they would have at the original place. And that's fine too, I guess, because they seemed to feel good about it. People close to me have been in car sales - they have a saying: "A good deal is the one you like".

 

[amcnj]

As said by others already, everything is negotiable. I always figured the dealer has some bottom line number they won’t go below, unless there are some unique circumstances that make getting that car off the lot imperative. But there are many ways to get to that number. If they wave the processing fee, that money is being made up elsewhere. I may be wrong, but that would make sense to me.

 

[White Cat]

Twice have have had it waived at the end by getting up to leave. Other times not.

 

[MillauFr]

The question is why can't car manufacturers sell directly to the consumer like Tesla does? There are so many shenanigans that go on with car dealers I think Tesla has the right idea and selling direct.

 

[Disneyfan754321]

Every single thing is negotiable. If the dealer wants to sell the car badly enough, he'll either lower it or eliminate it. If not, he won't.

That said of course that means that if you're buying a car on a 6-9 month waiting list, that dealer probably doesn't need to sell the car badly enough that she is going to want to negotiate.
And make sure you don't lose your way in the forest concentrating on a single tree either.

Well said...
We walked away and they called us a week later making deals.
Where most dealers get you is in finance.
Try to get financed before you walk in..ie credit union etc.
My DH works in car business

 

[_19disnA]

The question is why can't car manufacturers sell directly to the consumer like Tesla does? There are so many shenanigans that go on with car dealers I think Tesla has the right idea and selling direct.

There are things known as dealer franchise laws. If those didn't exist, there would nothing from preventing a car company from opening a store just down the road from other dealers and undercut their prices. No one would ever want to invest the money into owning a dealership (i.e. land, facility, equipment, employees, etc.) if there weren't such franchise laws. People who don't understand how this works don't realize it is partly there to help the dealers not just a way for car manufacturers to make money. Cars eventually need service and/or repair.....even Tesla's. If there were no dealers around where you would go for parts & service?

If you need warranty work done on a Tesla where do you take it? Some repairs require specialized tools/equipment/training in order to be done correctly in addition to having access to the necessary parts.

 

[cobright]

^^^^^ THIS is Rule #1 about understanding car purchasing.

and Rule #2 is to walk away at least once. Get them to the point they won't budge on, then walk away. Go home. They'll be calling you before you get there.

 

[MillauFr]

There are things known as dealer franchise laws.

Hasn't Tesla basically ignored those laws? States have tried to sue them but they have been unsuccessful. Tesla must be doing something right as they are more valuable than all of the other car companies combined.

 

[MillauFr]

and Rule #2 is to walk away at least once. Get them to the point they won't budge on, then walk away. Go home. They'll be calling you before you get there.

How do car dealerships get away with operating like this? No other business would ever get away with treating the customers so poorly. Because of state laws that have restricted competitors, bad dealers are shielded from going out of business.

 

[SamFaniam]

Tesla must be doing something right as they are more valuable than all of the other car companies combined.

This is new based on a recent increase in the valuation. But, due to their small market share, the company is probably overvalued. I would be interested to know how many people who own Tesla stock actually own a Tesla. Considering the ongoing reliability issues, I would guess not many.

 

[Maistre Gracey]

Sure, but they will try to tack them in another form... which you may never realize. Then the car dealership pays the full freight (really you did).
You can cut a pizza however you like, but regardless of how you do it it’s always the same size.

 

[Christine]

I've never been able to negotiate the processing fee off of my sales document; however, I have been able to just negotiate down. If that gets rid of the price (but not the line item on my sales document) what do I care. I believe in my state, it's not negotiatable.

I recently helped my son buy his new car. He wanted a 2020 VW Tiguan and we wanted the 0% finance (his credit wasn't good enough for that so I was a cosigner). The sticker on the car was right at $30,000-ish. I told them I wanted an out-the-door price of $25,000 (including taxes, tags, their fees, etc). I knew I low-balled it a little bit. They did a tap dance and some BS and then they tried to tell me that if I wanted the 0% finance I had to pay more for the car. That's when we walked out. I've done many 0% financings and that has never been a condition. By the next day, they were calling my son back offering $27,000 out the door. Said, nope. We finally settled on $26,000 and he got the car. I feel like we did well because if I hadn't even negotiated I'd have been out the door for more like $32,000. Anyway, the processing fee was never on the table and never has been, but as long as I get my bottom line price, I don't care. I've never know any dealer to waive it.