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Behind the Scenes at a Car Dealership | Edmunds.com
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Behind the Scenes at a Car Dealership | Edmunds.com
Do you wonder why it can take hours to buy car? Or what the salesman is doing when he huddles with the manager? We've got answers for you.
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Given the experience- as long as Tesla is around I will continue to buy their cars. I was a life long Toyota guy prior to Tesla. I hope other automakers will have the opportunity to change how their dealers work based on Tesla's example. It seems insane that the dealer has to survive on the misfortune (service needs) of their customers.
The dealer F&I person is the one person in any dealership a car buyer must view with considerable skepticism. Without sufficient caution, even the best deal can go bad in the F&I office. These are one example of people who really are out to take your money.
The products the F&I manager sell do have some value. However, they are sold at grossly inflated prices which results in the products actually having dubious value. Dealers spend a lot of money training their F&I people how to sell these products. The F&I people have a variety or word tracks and props all designed to invoke a sense of fear in the minds of the buyer. A buyer should simply say no to any of these products. All can be purchased elsewhere for much less money.
It is always better not to buy something on the spot but, rather, take some time to consider the purchase. F&I people know if a buyer has a chance to think they almost never will buy a product. That is why they expend so much time and effort on these products at the time of the sales. Be smart, say no.
For people who do not know, dealer reserve is when the buyer qualifies at a rate (perhaps 3 percent) but the F&I person writes the finance contract at a higher rate (perhaps 5 percent). The increased interest paid is split between the dealer and the financing source. This is actually legal. Dealer groups fight hard for this practice. A buyer should always ask the F&I person to disclose the actual buy rate. Knowing the buy rate allows the buyer to negotiate the finance rate rather than simply accept what the F&I person quotes.
I have noticed a huge difference between the F&I experience at high end dealerships compared to mass market dealerships. F&I managers at the high end dealerships seem much less likely to apply pressure to buy their products and they seem less likely to incorporate dealer reserve. I suspect this is because the average buyer at a high end dealership is much less likely to have credit issues.
Finally there is the infamous documentation fee. These are not fees! A fee is something applied by a third party, such as sales tax. In reality these fake fees are simply part of the selling price. Dealer F&I folks concocted this scam to deceive buyers. The intend is for dealers to be able to advertise a lower price, thus increasing traffic to the dealership. The F&I folks use the word fee because they know this attaches a sense of legitimacy to the scam. And it is a scam. Buyers should simply negotiate a price which includes the fake documentation fee.
By definition, the selling price includes all dealer costs, including any cost of paper work. Note dealers do not attempt to charge fees for rent, power, supplies, clerks, sales people, etc.
F&I people strive to convince buyers they are separate from the sales people. They are not. They are just dealer employees. There is nothing unique or special about these F&I managers.
If any dealership person tells you the fee is required, that person is lying. The fee is not required. However, if a dealership applies the fee to one contract it may likely, for legal reasons, have to show the fee on all contracts. If they do not they run the risk of being sued for disparate sales practices. But, once again, this does not mean the buyer has to actually pay the fake fee.
God bless him
Nelson Mac
Get the information to the dealer beforehand...it will save you tons of time, and may even get you a better price...after all, you are showing a decent level of commitment.
Congrats on the new ride!
If I were you, I'd 1) talk with an attorney; and 2) reach out to the local consumer reports person in the local media.
How, if the car is in the garage, is the dealer not liable?
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2015 Subaru Outback 3.6R / 2014 MINI Countryman S ALL4
This fee is for the title application fee, inspection sticker and any other type of fees the dealer pays to the State. And credit card fees.....all these type of fees add up that the buyer doesn't really think about. The scam really is when the dealer tells you oh youre first oil change is free, oh your inspection included....well its not because technically all of that is the Documentation Fee. Remember nothing is free in this world.
So, exactly what would it take to call it a scam?
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