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Advertising Fees

I was wrestling with a Mistibushi dealer today
(smacking him around with my Edmunds-provided
information) and he countered with the following:
Edmunds doesn't account for a variety of dealer
costs like advertising fee (3% of base invoice px),
sales promo fee ($100 per vehicle), and dealer
flooring assistance (1% of base invoice). I gotta
admit, I don't recall hearing or reading about
these charges. What's the deal...are these charges
legit or have dealers invented them to counter the
information that consumers now have?
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Comments

  • Could someone possibly tell me how to find what
    percentage a dealer should be using against the
    base dealer invoice price in Maryland.
  • Please send email to gmewshaw@erols.com
  • I am not an expert but boy does that deal smell bad! They want an additional 4% +$100 over whatever deal you finally negotiate. What a crock! Run and run fast. A toyota dealer here advertised corolla LE's at .89% over invoice. No additional dealer fees or advert fees. These all sound like a way to make you feel like you have no choice but to pay their fees. You ALWAYS have a choice and they can always get rid of the fees. They may not want to make a sale that bad but they could drop the fees if they wanted to.

    Also don't feel bad about cutting dealer profit to a minimum especially on new cars. I read that a lot of dealers can actually run their new car sales department at a loss each year because their used car department and service departments have such huge yearly profits.
  • czizcziz Posts: 1
    I am considering purchasing a new plymouth voyager. The dealer invoice lists two "advertisement" fees which they say are mandatory costs to the purchaser. Is this a legit cost or is it negotiable?
  • Advert,

    From what I've read, and from Verchoe's response to my initial post, it appears that these costs are real. More specifically, they are costs that the dealers encounters to run their business. I'm convinced that these costs are now becoming part of the "sticker" because consumers have become so much better informed about car pricing. When the dealer was walkin away with a few thousand from each sale, they probably didn't see the need to explain all of the costs that make up their "overhead". Now that the buyer knows all about incentives, rebates and holdbacks, the dealers feel compelled to even the score by tacking on any cost they can possibly associate with the car. I feel very strongly about these costs, and I'll make every attempt to negotiate them. My feeling is that any cost the dealer incurred that actually added value to the car is a legitimate cost. Any cost related to their own overhead is not my problem. (Its the equivalent of me telling the dealer that I spent 25 hours researching new car information and prices. At my billable rate of $100 per hour, that entitles me to a $2500.00 price reduction on the car I purchase.)
  • alexalex Posts: 1
    Looking to purchase a new 98 vehicle and was told
    by the dealer if I placed an order he would be able to sell the vehicle to me for 100 over dealer invoice. Well when I walked in to the dealer armed with Edmund's invoice price, he took back his offer. He said I failed to include destination charges, advertising fees, blah, blah.
    I had everything calculated but the advertising fees. But if I'm ordering the vehicle should I have to pay for advertising, and if so how much
    should I expect to pay? I would appreciate some
    help. Please e-mail at acmedia@earthlink.net
    Thank you.
  • Exactly! Couldn't have said it better. Don't let them them tell you that those fees are "mandatory". Nothing is mandatory. They could sell the cars at less than invoice and waive the freight charge if they wanted to. They won't, but they could. Just approach it from the angle that EVERYTHING is negotiable. If you just accept that those fees are fixed and that you have to pay them , then you have given up that much bargaining room.
  • I encountered the same thing with the advertising fees. I negotiated with the fleet manager to buy a Pontiac Grand Prix for $500 over invoice. He built up the car on his computer, and the invoice matched Edmund's EXACTLY, except for an extra $251 advertising fee, which is exactly 1% of the MSRP. He claimed that is a real cost to the dealer. I had negotiated with other dealers and none would even come close to the price I got. He told me that they have to pay Pontiac that fee. There were no other additional fees, and destination was included in the invoice. So I guess that in lieu of paying the advertising fee, I could have negotiated paying only $250 over invoice. But after doing a lot of research, I think I got the best deal possible. Even in the Edmund's fair price guidelines, they suggest including 1-3% for advertising on top of the 5% over dealer cost.
  • I'm in the process of buying a 1998 Camry LE with
    a dealership in the Charlotte, NC area. We agree on
    the dealer invoice costs (which I got from
    Edmund's, Thank You) except for 3 additional items
    as follows:

    $300 advertising fees
    $181 floor plan fees
    $350 Southeast administrative fees

    They claim this is part of their dealer invoice
    and thus I should pay for it. I say they should pay
    for these out of the profit (4% over invoice not
    including these fees) I'll pay them. Any advice?
    Should these types of fees be included in "true"
    dealer invoice?
  • Advertising is legit, assuming they are charging you the actual cost. Floor plan? I think that is a cost of doing business. They want to charge you for their rent. Isn't that included in the car price? I think so. Finally, administrative fees? Sounds the same as document fees. I would try to have those waived. But, first ask what those fees cover, before you hammer them with "Why should I pay for retiling of the dealership bathroom?" Get my drift?
  • I got a Camry LE V6 only $250.00 over the invoice. The dealer invoice is same as Edmund Web site and added $350.00 the advertising cost.

    I think I am happy with the deal.

    Anthony Le
  • You know, it's the old story here...offer them what you want to pay, and walk out if they refuse...they may call you later that day, and if they don't, then it's your turn to hit the ball.
  • That's right. Don't pay a dime in advertising fees. They're not your responsibility. The dealer will try to charge them, of course, but you can always go to another (more reasonable) dealer.
  • gwahlgwahl Posts: 2
    I have bought or helped buy 3 cars recently. Every deal included ad fees (1.2%). The cars were popular and the buyer was willing to pay it. If you don't want to pay it just say so, if they want to make the deal they will waive it, if not, shop around to other dealers. Don't take it personally, it's only business.
  • buyvanbuyvan Posts: 1
    I am beginning the process of replacing a MiniVan in 98. I have started to look at prices and other fees. I am some what perplexed by the information on Prices and Fees as described by Edmunds help guide. Primary that a buyer should add advertisement fees, Transportation and dealer prep charges. The confusion is that according to the FTC all these fees and charges are included in the dealer invoice. I don't want to be taken to the cleaners by any dealer, so any help is appreciated.
  • guitarzanguitarzan Posts: 632
    No Greg, you may not always go to another dealer. Let me put it this way from an avid Acura fan: 2 Dealerships within a one hour drive.
  • alcoalco Posts: 1
    My wife and I were going to order a Mercury Villager from the Ford dealership in Freeport, Ill., and were told they would sell us that vehicle at invoice. Well, when my wife went to place the order, they added a $250 advertising charge, which we balked at, and then walked out. We fretted for a while because we thought we made a wrong choice, only to buy a Windstar via Auto-By-Tel from a Madison, Wis., dealer for almost $500 under invoice, and no advertising fees. I look at advertising charges as just another way to bilk the consumer and refuse to pay them-even it means walking or buying a horse and buggy to get to work.
  • tgoebeltgoebel Posts: 1
    I am also confused about the Advertising Fee. Is it included in the dealer invoice, or is it added after you negotiate your best price along with the destination charge and filing fees?
  • guitarzanguitarzan Posts: 632
    A straight forward dealer, like I just dealt with, negotiates a total cost for the vehicle. They listed the shipping charge, options, and everything else. So I knew what I was paying. Acura doesn't add advertising charges, they are included in the vehicle price.

    The unscrupulous salesmen may negotiate a price, then try to tack on the fees. At that point you make it clear that your offer included the fees, and go from there.
  • mecmec Posts: 3
    Today we had a salesman at the Dodge/Plymouth dealership tack on not one but two advertising costs. He was trying to say that they the cost of a new van would be $98 over invoice with $210 and $230. It looked to us like the total they used to tack on for "Dealer Prep." We plan to go to another dealership.
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This discussion has been closed.