Are Processing Fees at Car Dealerships Negotiable?

[tvguy]

I bought a car in July and paid $85 in processing fees.
I paid $425 in state fees which the dealer collects and passes on to the state, those specific fees are not negotiable, but the dealer certainly can lower the sales price in compensation for either of the above fees.

 

[design_mom]

When I’ve purchased a new car, I tell them I only want to discuss the out-the-door price I will pay. I don’t care if the discount the price of the car, or discount the processing fee, as long as I end up paying the price I think is fair.

 

[shh]

in florida, dealer fees are 800-1000 - highest in the nation unfortunately.

 

[Christine]

I bought a car in July and paid $85 in processing fees.
I paid $425 in state fees which the dealer collects and passes on to the state, those specific fees are not negotiable, but the dealer certainly can lower the sales price in compensation for either of the above fees.

Looks like California has a cap on those fees ($85). You are lucky!

 

[MillauFr]

How do these shady car dealers stay in business?

 

[cobright]

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.

The industry protects itself and the job selects the worse sort of human being for success. A car salesman, to succeed, must be pushy and loose with the truth in ways that would be taken as the gravest of insult in any other context.

Stop interacting with them (professionally) as if they were human beings. They are of course, but their jobs entail acting otherwise. You would not tolerate an excel spreadsheet that gives you bad or misleading results to your equations.

 

[tvguy]

How do these shady car dealers stay in business?

If they are new car dealers, these days, they don't stay in business. A friend was Business Manager for a Volvo dealer for years and she says you have to be affiliated with a manufacturer to get the customers in And you have to get good customer reviews or they yank the franchise. And you have to settle for little or no profit on new car sales. As she put it, how many businesses stay in business sell a $50,000 item and making only $50 on it?
Their money is made in the following areas:
1) Customer paid service
2) Warranty service (these two areas are the profit centers)
3) Used Car Sales
4) New Car sales.

 

[MillauFr]

If they are new car dealers, these days, they don't stay in business. A friend was Business Manager for a Volvo dealer for years and she says you have to be affiliated with a manufacturer to get the customers in And you have to get good customer reviews or they yank the franchise. And you have to settle for little or no profit on new car sales. As she put it, how many businesses stay in business sell a $50,000 item and making only $50 on it?
Their money is made in the following areas:
1) Customer paid service
2) Warranty service (these two areas are the profit centers)
3) Used Car Sales
4) New Car sales.

That is my understanding as well. Which makes you wonder why they allocate all of that high priced real estate to store cars for manufactures? You would think it would be more profitable to open a service center in an area with cheaper real estate and stop selling new cars. More and more car dealerships in Seattle are closing and they are redeveloping the property for apartments. Some of them who wanted to remain in business selling cars bought relatively cheaper property in an industrial area.

 

[tvguy]

That is my understanding as well. Which makes you wonder why they allocate all of that high priced real estate to store cars for manufactures? You would think it would be more profitable to open a service center in an area with cheaper real estate and stop selling new cars. More and more car dealerships in Seattle are closing and they are redeveloping the property for apartments. Some of them who wanted to remain in business selling cars bought relatively cheaper property in an industrial area.

You have to have the manufacturer's name on the building to draw all those private pay service and warranty service customers. But we bought a new Toyota 2 months ago and the dealership is on the prime real estate right on the freeway and their massive service center is 2 miles down the road off the beaten path. So at least this dealer has split the operations

 

[Mackenzie Click-Mickelson]

When I’ve purchased a new car, I tell them I only want to discuss the out-the-door price I will pay. I don’t care if the discount the price of the car, or discount the processing fee, as long as I end up paying the price I think is fair.

That's pretty much how we did it when we bought my car at the end of 2005 (used car though). We said "taxes (meaning sales tax as property tax isn't paid to them anyways), dealership fees and all"

 

[kymom99]

The industry protects itself and the job selects the worse sort of human being for success. A car salesman, to succeed, must be pushy and loose with the truth in ways that would be taken as the gravest of insult in any other context.

Stop interacting with them (professionally) as if they were human beings. They are of course, but their jobs entail acting otherwise. You would not tolerate an excel spreadsheet that gives you bad or misleading results to your equations.

We drove a car a few days ago. 2019 equinox that had been a rental. It was filthy. The salesman said he was sorry it was dirty and that they had just got it in. My husband said according to the website you have had it a month. Called him out on the lie. No e cause to not have cleaned that car up. It was loaded with all the extras. It would be a nice car but who wants to buy a car that smells bad?

 

[kymom99]

If they are new car dealers, these days, they don't stay in business. A friend was Business Manager for a Volvo dealer for years and she says you have to be affiliated with a manufacturer to get the customers in And you have to get good customer reviews or they yank the franchise. And you have to settle for little or no profit on new car sales. As she put it, how many businesses stay in business sell a $50,000 item and making only $50 on it?
Their money is made in the following areas:
1) Customer paid service
2) Warranty service (these two areas are the profit centers)
3) Used Car Sales
4) New Car sales.

I’d say they make money on all the extras they sell. Like e tended warranty, service agreements, etc.

 

[tvguy]

I’d say they make money on all the extras they sell. Like e tended warranty, service agreements, etc.

Yes, they do make money on those.

 

[StitchesGr8Fan]

Everything is negotiable, But if it is legally required (like taxes) then they just take it off somewhere else and you still pay the tax.

 

[MillauFr]

We drove a car a few days ago. 2019 equinox that had been a rental. It was filthy. The salesman said he was sorry it was dirty and that they had just got it in. My husband said according to the website you have had it a month. Called him out on the lie. No e cause to not have cleaned that car up. It was loaded with all the extras. It would be a nice car but who wants to buy a car that smells bad?

It would have been more of a shock if they told the truth and were transparent.

 

[RUDisney]

I've saved my company over $3M so far this year through negotiating deals. EVERYTHING is negotiable. If you don't ask, you won't get it. You can ask for crazy things and you may get them.

Because I negotiate deals for a living, my sister took me when she was buying her car. I told her to keep her mouth shut and to not contradict me. I tried to get her a free or deeply discounted remote starter. When I asked, she turned to me and said, "I told you I didn't want that." I looked at her and said, "well, now you're not getting it." She regrets that now and wishes that she kept her mouth shut. I told her to be ready to get up and walk out if we didn't get a good deal. The remote starter was going to be a bonus to the deal, so we didn't leave.

You have to be willing to walk away. There are other dealers who are more than happy to meet and beat another's deal.

 

[shh]

And you have to get good customer reviews or they yank the franchise.

Sure wish it worked that way with other dealer brands - toyota, honda and kia dealers in my area get hundreds of 1 star reviews on Yelp - they lie and rip so many people off ...yet continue to do business for decades. They're extremely misleading in ads, charge 800-1000 in dealer fees and other additional fees on top of that.

I've been wanting to buy another car, but every time I think about dealing with these dealerships, I just want to run and hide. I like carmax and carvana, but their prices always seem so much higher than cargurus and KBB estimates recommend - like $1.5-2k higher.

I wouldn't mind paying a few hundred more for a more trustworthy, better service experience - but not 2k more on 16-20k used car!

It's really a broken 20th century model.

 

[Darcy03231]

I negotiated it off last year when I bought my Jeep, but I wasn't financing it. I told them I'd give them cash, they could give me the title and we'd be done. There was a bit of a song & dance, but they ultimately took it off.