I think my dealer wants to sneak in a little extra profit! [Archive] - bimmerfest

CD-55

10-07-2002, 03:38 PM

So when I odered my car I agreed to pay a set amount over invoce, but now I am told there will also be a $198 "Processing Fee"!

Here are the items:
Invoice & MACO
Dealer Mark-up or "Profit"
Tax
Title/Tag transfer
!!!Processing Fee!!!

Jon, tell me it is not true... my good dealer is attempting to take advantage of me!

Is this "Processing Fee" just a another way of getting $200 more out of me, or is this are real cost that should be included in the invoice cost of the car?

Jon S.

10-07-2002, 03:41 PM

What do you think?

:dunno:

:banghead:

Please vote in the poll...

rkny

10-07-2002, 03:47 PM

Originally posted by CD-55
So when I odered my car I agreed to pay a set amount over invoce, but now I am told there will also be a $198 "Processing Fee"!

Here are the items:
Invoice & MACO
Dealer Mark-up or "Profit"
Tax
Title/Tag transfer
!!!Processing Fee!!!

Jon, tell me it is not true... my good dealer is attempting to take advantage of me!

Is this "Processing Fee" just a another way of getting $200 more out of me, or is this are real cost that should be included in the invoice cost of the car?

Hi CD-55 -- I will defer to Jon's wisedom, but my dealer also had something like that, and it was actually printed on the purchase order so they can point to it and say it's non-negotiable, yada yada. The breakdown was something like computer fee, document fee and one other thing I can't remember. In my case I had also negotiated a invoice plus price, and when he tried to slip that through I objected. I was pretty sure I could've convinced him to take the whole thing off (so it's definitely fully negotiable) but to be nice, and because I had already gotten a great deal, I offered to split it with him to close the deal. After all, I didn't want to spend another minute arguing over the price and he didn't want me to walk at that point either. Anyways, just my 2 cents.

Any chance the Don Juan will be docking tomorrow? the website says docking on the 9th . . . almost here . . . .

CD-55

10-07-2002, 03:50 PM

Hey nice poll you added there Jon!

Anyway if it is legit, then I would assume it is a fee tacked onto every sale at the dealership, but if that is the case, then when we worked the deal, it should have been disclosed to me!

I do not think it is legit, so I hope that all I will have to do is ask them to remove it.

Jon S.

10-07-2002, 03:55 PM

For what it's worth, we charge a $45 doc fee - which is what
all other california dealers charge...

CD-55

10-07-2002, 04:01 PM

Originally posted by Jon Shafer
For what it's worth, we charge a $45 doc fee - which is what
all other california dealers charge...

I see on my 2001 330Ci I paid $67.50.

Michael330

10-07-2002, 04:37 PM

I didn't pay ANY fees. There were there but I told the dealer to take them out. I mean they have to do SOME work for making all this money on you. Mailing some form or punching something in a computer is part of their work towards this profit. Just disagree. Do you think they are not going to sell you a car and keep it on a lot until they find some buyer for it and start all the paperwork from a scratch again? All this trouble for $200? I don't think so...

beauport

10-07-2002, 04:54 PM

Virginia law allows these fees to be charged and that amount is the current limit. Step across the border and MD also allows the processing fee but the current limit is $25. One more reason I bought in MD, though the real reasons were a much better deal and the dealership treated me respectfully and actually knew something about what they were selling.

darchen

10-07-2002, 08:40 PM

I negotiated a great price with a dealer in N.Va but he wanted to add a $200 processing fee on top. When I quizzed him about it, he said he was "required" to charge it by Virginia state law. Anyway, I got the same price from a MD dealer without the processing fee.

I wasn't charged the MACO fee either but that may be because I'm doing European delivery.

eugeneDC/TX

10-07-2002, 08:51 PM

i bought my car at richmond bmw... no maco... no processing fee... just x over invoice and ttl....

Ben Chou

10-07-2002, 08:59 PM

CD,

Every dealer in VA charges this. Fairfax is 190 something, and Sterling as per you is 160. MD dealers do not have this.

VOB as far as I know does not have one and Passport is 25 dollars.

MikeW

10-08-2002, 07:16 AM

If the dealer is registering the car and getting plates for you, they would pass through that fee. In addition, they usually use a service bureau<sp?> to actually do this, and they charge a fee. I also don't doubt that they (the dealer) tack on something on top of that. This is how it usually works in NY.

I would make them break out the fee. If they can't justify it as payments to necessary outside parties, refuse to pay it.

JST

10-08-2002, 07:50 AM

Originally posted by Ben Chou
CD,

Every dealer in VA charges this. Fairfax is 190 something, and Sterling as per you is 160. MD dealers do not have this.

VOB as far as I know does not have one and Passport is 25 dollars.

They gave us the same song and dance when we bought our VW in Springfield: $198 fee, non-negotiable, etc. Within ten minutes, it had been waived. Don't pay that fee. It's crap. Threaten to walk if they don't agree to waive it. As painful as it would be to wait again, it's worse to allow the dealer to slip in extra fees at the last minute, when they think they have you over a barrel. Remember, you want the car, but they also want you to buy it. If you don't, they have a somewhat oddly specc'ed 330 that they have to sell.

FWIW, Passport charged me the $25 document fee and no MACO or other miscellaneous fees of any kind. When I signed the papers, the deal (as agreed) was $1800 plus the invoice price of the car plus $25 for the documentation plus VA state sales tax. Nothing else.

I didn't realize until later how fortunate I was to have chosen Passport as my dealer.

nate

10-08-2002, 08:07 AM

Originally posted by JST

They gave us the same song and dance when we bought our VW in Springfield: $198 fee, non-negotiable, etc. Within ten minutes, it had been waived. Don't pay that fee. It's crap. Threaten to walk if they don't agree to waive it. As painful as it would be to wait again, it's worse to allow the dealer to slip in extra fees at the last minute, when they think they have you over a barrel. Remember, you want the car, but they also want you to buy it. If you don't, they have a somewhat oddly specc'ed 330 that they have to sell.

Sorry, I'll disagree here.

It is not worth walking on a deal because of a standard processing fee as minor has $198. Urge them to waive it, but don't walk over this paltry sum.

JST

10-08-2002, 08:13 AM

Originally posted by nate328Ci

Sorry, I'll disagree here.

It is not worth walking on a deal because of a standard processing fee as minor has $198. Urge them to waive it, but don't walk over this paltry sum.

It's not a paltry sum; $200 is a fair amount of money. But the thing that is motivating me is the underhanded fashion in which the "fee" was inserted. If I negotiate a deal for, say, $1400 over invoice, I expect that when I sign the papers, the deal will be $1400 over the invoice price of the car (plus taxes, of course). Document or processing fees of less than $100 might not upset me in that circumstance, but if there's a $200 processing fee, I want the dealer to tell me that up front. Suddenly a $1400 over invoice deal becomes a $1600 over invoice deal, and maybe there were other dealers that could have done better than that.

The worst part of this is that in addition to the "processing fee," it sounds like the dealer is ALSO charging MACO and some other fees. It's hard to negotiate if the presumptive $1400 over invoice deal suddenly becomes 1800 or 2000 over when you add all the fees in.

ashecnc

10-08-2002, 08:16 AM

Originally posted by JST

It's not a paltry sum; $200 is a fair amount of money. But the thing that is motivating me is the underhanded fashion in which the "fee" was inserted. If I negotiate a deal for, say, $1400 over invoice, I expect that when I sign the papers, the deal will be $1400 over the invoice price of the car (plus taxes, of course). Document or processing fees of less than $100 might not upset me in that circumstance, but if there's a $200 processing fee, I want the dealer to tell me that up front. Suddenly a $1400 over invoice deal becomes a $1600 over invoice deal, and maybe there were other dealers that could have done better than that.

The worst part of this is that in addition to the "processing fee," it sounds like the dealer is ALSO charging MACO and some other fees. It's hard to negotiate if the presumptive $1400 over invoice deal suddenly becomes 1800 or 2000 over when you add all the fees in.

thats is a perfect explanation..and I agree with you 100%

Jetfire

10-08-2002, 08:17 AM

I also disagree with the "walk away" approach. The $200ish fee is meant to cover the various administrative costs associated with registering the car, licensing it, etc - I'm not intimately familiar with the details there. Just about every dealership in Northern VA has this fee, and many of them very clearly post a sign with the words "$200 PROCESSING FEE" in the sales office.

While negotiating a price for my wife's Civic, I made sure that I figured the fee into my final price. I also made sure to ask about any fees while working on a price on my 330Ci. Basically I took whatever price we were working on and added the $200 to reach the "real" price of the car. Maryland dealers charge about $25, and one of them just quoted me a price that included the fee.

The only exception to this rule was Auto Advantage, the pre-owned dealership from which I bought my M3. They have a $0 processing fee because they claim to do all of the paperwork in person at the DMV. Whether that's true, I don't know. They charge somewhat high prices for their used cars, so perhaps they just roll the processing into the price.

IMO, the $200 is something that any buyer should have in mind while shopping for cars in VA. I honestly don't know how much of that is profit but I would just figure that into the final price of the car. Hunter, don't take this the wrong way...but you should have thought about that before agreeing to a price. On the other hand, I'm a bit surprised that the salesman didn't make sure you knew about it before signing the paperwork.

nate

10-08-2002, 08:19 AM

Originally posted by JST

It's not a paltry sum; $200 is a fair amount of money. But the thing that is motivating me is the underhanded fashion in which the "fee" was inserted. If I negotiate a deal for, say, $1400 over invoice, I expect that when I sign the papers, the deal will be $1400 over the invoice price of the car (plus taxes, of course). Document or processing fees of less than $100 might not upset me in that circumstance, but if there's a $200 processing fee, I want the dealer to tell me that up front. Suddenly a $1400 over invoice deal becomes a $1600 over invoice deal, and maybe there were other dealers that could have done better than that.

The worst part of this is that in addition to the "processing fee," it sounds like the dealer is ALSO charging MACO and some other fees. It's hard to negotiate if the presumptive $1400 over invoice deal suddenly becomes 1800 or 2000 over when you add all the fees in.

Relative to the total transaction cost, $200 is very minor. One hour of work for an experienced lawyer? Somewhat trivial when compared to the car's price.

Maybe CD (and you) should have discussed fees with your dealers before agreeing on a price. But $1400 over invoice, I would take that to mean the cost of the car itself (independent of fees) If state law allows them to charge the fee, you can bet that most dealers will take advantage of it...

JST

10-08-2002, 08:33 AM

Originally posted by nate328Ci

Relative to the total transaction cost, $200 is very minor. One hour of work for an experienced lawyer? Somewhat trivial when compared to the car's price.

Maybe CD (and you) should have discussed fees with your dealers before agreeing on a price. But $1400 over invoice, I would take that to mean the cost of the car itself (independent of fees) If state law allows them to charge the fee, you can bet that most dealers will take advantage of it...

$200 will buy you a pretty cheap lawyer.

And I don't think you should think of it in terms of the total transaction price. The dealer is the one getting this money, so it's the dealer's pockets being lined. At the outset, CD and the dealer agreed on an amount that he would give the dealer as profit. Depending on what that amount was, the addition of this fee could increase that profit by 10-15 percent. Ten to fifteen percent is a big deal.

I agree that everyone should lay everything on the table at the outset, and I suppose consumers should ask about fees at the beginning. But at the same time, it's pretty sad when the onus is completely on the consumer. "So, we've got a deal, but are there any other hidden costs that you're going to try and screw me with later?"

IMHO, good business practice for the dealer would be to disclose, of their own accord and without prompting, the existence of such fees, ESPECIALLY when they are that large. If it were me, I'd be interested in teaching that lesson in forthrightness to the dealer in the only way they understand: through the use of economics.

And I wouldn't let the dealer give me this "state law" crap. State law allows the dealer to charge whatever they want for the car itself, but that doesn't mean they do. Just because the state caps the fee at $198 doesn't mean they have to charge it. The "processing fee" is pure profit, and nothing more.

Ben Chou

10-08-2002, 09:09 AM

JST,

I agree with you on the processing fee. I turned down a deal from Fairfax for my friends car because they would not budge from the processing fee.

You math is exactly why, if you tack on 200+ maco to a 1200 deal then it is not a 1500-1600 deal and some other dealer could have done better.

e36avusm3

10-08-2002, 09:13 AM

It's raja's bro..are you going the autocross this weekend? im in heat one...also, I just helped my friend buy a car in VA this past weekend, and they tried to put that fee on us...i don't think you should pay it, they are already making a profit on you, i don't think you should be expected to pay a 198 processing fee for them to do paperwork...we walked out on the deal, and then they dropped it.

·clyde·

10-08-2002, 09:13 AM

Originally posted by JST
Just because the state caps the fee at $198 doesn't mean they have to charge it.

This is key. I don't think that anyone here think that the $1400 over invoice means that the dealer is making a $1400 profit on the car. Leaving out bonuses, holdbacks, etc, out of that $1400 the dealer pays the sales commision, part of his rent, aggregate flooring costs, electricity, water, receptionist's salary, etc. Whatever the dealer needs to pay those things should be built inot the price that he's willing to accept for a car in the deal price. Any additional fees are an extra grind and should not be tolerated (IMO).

The only difference that I would find tolerable is if any specific fees were brought to my attention before any negotiations were started. I also might be willing to tolerate last minute fees, provided that my deal price is dropped by an equal amount. For instance, if I agree to $1500 over invoice, that's what I'm paying (plus tax, title, registration). If he wants to write it up as $500 over invoice plus $100 MACO, $200 processing and $700 dealer convience fee, that's fine with me, I still have my invoice+$1500 deal.

CD-55

10-08-2002, 09:44 AM

Originally posted by e36avusm3
It's raja's bro..are you going the autocross this weekend? im in heat one...also, I just helped my friend buy a car in VA this past weekend, and they tried to put that fee on us...i don't think you should pay it, they are already making a profit on you, i don't think you should be expected to pay a 198 processing fee for them to do paperwork...we walked out on the deal, and then they dropped it.

Yeah I am in the second heat. I will see you there!

How did I not see this! They made the switch earlier in the game.

We verbally discussed my price over invoice and reached an agreement. Included in the invoice is MACO and Destination, because the dealer really does have to pay these fees. What I just now noticed is that when all the talk was done, STUPID me signed a Buyers Order which has the $198.70 preprinted as part of the standard form!

It was not a complete Buyers Order, it just had the car price and my down payment printed on there. I don’t know if I didn't notice or just assumed that the “Processing fee for consumer services” did not apply to my deal.

Okay I am calling to discuss with the salesman.

Ben Chou

10-08-2002, 09:50 AM

Originally posted by CD-55

Yeah I am in the second heat. I will see you there!

How did I not see this! They made the switch earlier in the game.

We verbally discussed my price over invoice and reached an agreement. Included in the invoice is MACO and Destination, because the dealer really does have to pay these fees. What I just now noticed is that when all the talk was done, STUPID me signed a Buyers Order which has the $198.70 preprinted as part of the standard form!

It was not a complete Buyers Order, it just had the car price and my down payment printed on there. I don’t know if I didn't notice or just assumed that the “Processing fee for consumer services” did not apply to my deal.

Okay I am calling to discuss with the salesman.

All VA dealer include on the buyers order this fee. Good luck.

e36avusm3

10-08-2002, 09:56 AM

Originally posted by Ben Chou

All VA dealer include on the buyers order this fee. Good luck.

Yes..its part of the standard working order, but I've had it dropped with a 100% success rate both times, so it's definetly not mandatory.

CD-55

10-08-2002, 09:56 AM

Originally posted by Ben Chou

All VA dealer include on the buyers order this fee. Good luck.

They would be dumb not to include anything extra that they can get away with.

Anyway I was not expecting it and will not be happy to pay it!

I explained to the salesman that $200 is excessive. I expressed that I would be open to a reasonable compromises such as going to the DMW myself in exchange for waiving the fee, or paying a reasonable processing fee, but not $200.

The manager arrives later (who arranged my *very* good deal), so my salesman will run it by him.

Ben Chou

10-08-2002, 10:00 AM

Originally posted by e36avusm3

Yes..its part of the standard working order, but I've had it dropped with a 100% success rate both times, so it's definetly not mandatory.

Yes, I meant to say it was not madatory.

As part of the standard form ,the fee is listed, so unless you are looking for it, it is easy to overlook.

10-08-2002, 11:06 AM

I would take the exact steps CD is taking, however if push came to shove and I wanted THAT car, I would pay the fee . . .
Unless he's looking for a reason to get out of the deal then by all means take this one and run with it

I totally disagree with JST. Why do I want to battle over $200 !?
I don't and as they say' Now I know for next time to negotiate these things ahead of time.

You can't win every battle in life . . . sometimes you gotta learn to lose. It's not a *bad* thing . . .

·clyde·

10-08-2002, 11:28 AM

Originally posted by Alan F
I would take the exact steps CD is taking, however if push came to shove and I wanted THAT car, I would pay the fee . . .
Unless he's looking for a reason to get out of the deal then by all means take this one and run with it

I totally disagree with JST. Why do I want to battle over $200 !?
I don't and as they say' Now I know for next time to negotiate these things ahead of time.

You can't win every battle in life . . . sometimes you gotta learn to lose. It's not a *bad* thing . . .

Should CD take this as an offer from you to pay the $200 fee on his behalf?

:D

Michael330

10-08-2002, 02:03 PM

Listen guys! We are getting into semantics. Whatever you call it: a fee, a surcharge, a required whatever. It does not matter because it ultimately means one thing: your money. Price for anything is based on what you are willing to pay and what others are willing to sell it for. Period. If he tells you it is some required fee for whatever reason, tell him to lower the price of a good or service by this amount. You can do this with any product. It is just that people got used to the fact that if it is callled "a fee" than it is beyond anyone's control. I did the same for my international long distance. There was a 5.99 fee to get it for this rate. I told them that they either waive the fee or lower per minute cost. Is it worth for them to lose my $50-60 per month business over $5.99. Of course not. If they are unwilling or their burocracy does not allow them to, find some other business. You would not want to deal with them anyway in a first place because it seems like no one can make any decision there. If you accepted this fee at the very begining by signing something, well that's a different story...