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Can a Car Dealership remove the dealer fee?

Posted on 2011-09-15
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Last Modified: 2012-05-12
I heard that some dealers are modest enough and will drop a dealer fee. Others say it's not possible and every person that has left the lot has paid a dealer fee.

Can you avoid this fee? Or is it really mandatory? What would be a good negotiation tactic?

In my case, I see a Dealer service fee I might have to pay
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Question by:tobe1424
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by:Tiras25
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Best way is just not to buy form a dealer.  Buy late model used and save thousands.
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by:inetman
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Use things like buyandsell and craigslist or local newspapers.
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by:tobe1424
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Well, they are selling me a car $4,000 under book value...it's worth 20,0000 but leaving it at 16,000

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by:lancecurwensville
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"Book Value" is an estimated or anticipated price that is determined by anticipated market demand on a new vehicle.  This is set at corporate.  Dealer selling price, on the other hand, is determined completely by the dealer and they make that decision based on a couple factors:
1.  Are they a franchise or actual dealer
2.  Attached to point 1, did they purchase the car for resale or is it being invoiced to them from corporate.
3.  how long has it been on the lot (if they didn't buy it for resale, after a period of time, they have to start paying for it).
4.  Are they trying to move it to make way for new model.
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silverkorn earned 50 total points
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based on your response I am going to assume the car in question is a used car and not new. Either way, lancecurwensville's response can be applied in both scenarios, but with a used car dealers often buy their inventory from a dealer auction. These cars are usually from other dealer trade-in's or lease vehicle returns, or insurance claims from damage. Always keep in mind that dealers are not in business to lose money, so they are definitely making money on the car and you should be careful as to why they are willing to sell the car $4,000 under "book" value.

as to your original question, yes dealers have the option to waive any and all fees that they impose on the person purchasing the vehicle. They often do not offer to lift these fees as they prefer to use the vehicle price to haggle to give the illusion that the person making the deal is helping the consumer by lower the price of the vehicle while keeping the fees the dealer is able to better cover its overhead costs. Some states mandate how much a dealer is allowed to charge the consumer for these fees, while other states do not, so always keep a keen eye out for what exactly you are signing and agreeing to.
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by:stu215
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Ask the dealer to lower the price by X amount ( X being the amount of the dealer fees ) and tell them if they do so that you will purchase the car from them if that is the only thing holding you back from purchasing....

That way they are lowering the "Car" price and not removing their dealer fees ...
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by:stu215
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All you should really care about is the total amount you have to spend on the car.
Where they make the reductions in cost is really of no difference to you if the final outcome is that you pay less...
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by:stu215
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You should also try a few dealerships with similar cars and get quotes from them and then go back to the original one you like and tell them other dealerships have offered you a better deal.  ( you dont actually have to go to other dealerships to say you got quotes ) But you may end up having to walk away if they will not work with you on the price.
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by:aleghart
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>every person that has left the lot has paid a dealer fee.

If you charge one customer a "dealer fee", then _all_ customers must be charged a dealer fee.  Some states have laws (FL?) that do this for consumer protection.

The "dealer fee" is built-in profit.  Nothing to do with the state...don't let the scam fool you.  But to be fair, the dealer must charge the same fee to all customers, or don't charge anything at all.

So, if the dealer has this profitable "fee", there's no use negotiating around it.  He want that to book profit, even if the car is sold at little or no profit.  If he bought it for 5K, he can sell it for 5K and get his profit with the "dealer fee".  Disguises it because some customers will look at the "price" and compare to Blue Book without adding in the "fee" for comparison.

Do you _have_ to pay it?  No.  You can go somewhere else.

As stu215 said:  "All you should really care about is the total amount..."  If you are buying cash, that's all that matters.  Same for a bank loan.  If the loan won't pay for the "fee", then you have to pony up the cash.  Or walk away.

In Florida, an advertised price (from the dealer) must include the dealer fee.  So, they cannot back it out to lower the price.  If the ad is from a manufacturer, they don't include the fee because each dealer has their own pricing structure, or no fee at all.
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by:dhsindy
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Here is a good webpage to explain all the terms - you will notice nearly all the fees can vary by state:

http://www.edmunds.com/car-buying/what-fees-should-you-pay.html
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by:Michael-Best
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This may be of interest to you.
Forum on "why we don't have direct from-the-manufacturer car sales"
http://grassrootsmotorsports.com/forum/off-topic-discussion/why-are-there-no-direct-car-sales/21157/page1/

Hpe ths hlps.
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by:dhsindy
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As a matter of fact, we have a dealer here (Indianapolis) that advertises, "No dealership fees ever!"
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by:Michael-Best
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If there is no fee... then how do dealers pay their expenses & feed their families?
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by:Michael-Best
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Edit:    fee... I mean commisssion.
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by:aleghart
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By profit margin on selling the car.  They buy it wholesale, or at auction, or from a private seller on their lot for $3000.  They clean it & put it for sale for $4,000.  There's the money to feed hungry mouths.

What some dealers do is add a "dealer fee", which is not a fee paid to any governmental entity at all.  It is a way to add profit.  Now, the same sale for $4,000 is marked up to $4,395 ... and tax is paid on all of it.

The extra $395 goes into the dealer's pocket as profit.

It also allows them to book a sale at a lower apparent profit.  They can sell for $3,000 and say it was at cost, or a loss when they subtract cost of cleaning/prep, space on the lot, overhead, etc.  But, there is still their built-in profit in the "dealer fee".
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