Advertising Fees
yorickshed
Member Posts: 2
in General
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?
(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
percentage a dealer should be using against the
base dealer invoice price in Maryland.
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.
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.)
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.
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?
I think I am happy with the deal.
Anthony Le
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.
Curious! Is this, as well as the destination
charge, a true fee or a 'soft charge' that the
manufacturer uses to help the dealer negotiate? I
presume that there are other rebates and incentives to dealers not discussed on these pages. I know darn well this dealer wanted to dump their allotment of Malibus so they could pick-up more Corvettes, their stated target market. Their profit margin is much greater on the 'Vete, due to demand, and you'd be lucky if you can get one at 100 over sticker let alone over invoice. My deal is done! I like the car and after all, what percent of $18000+ is $187 anyway. I guess I'd really like to find out what costs are soft and negotiable and what costs aren't, realizing the dealer has to eat. ).
By the way, for those doubters, the invoice elements reported by Edmunds were absolutely accurate in my case.
I just ordered a Ford SuperDuty 4x4 pickup. The advertising costs were $75, which I believe Ford may charge the dealer for national advertising, and $24.80 for gas. Both cost seemed reasonable. The advertising charge may be more for your dealer, but considering the other charges for flooring and admin fees, I suspect your dealer has even padded the ad cost. I am buying my truck in another state, which necessitates the dealer drafting additional paperwork so I can register my truck in my current state and pay my local taxes rather than his state's taxes. I am only being charged a $39 documentation fee. The dealer made it clear that this is an extra cost for this service and is not part of the factory invoice. It sounds like your dealer is trying to pass through the cost of doing business and calling it part of the invoice costs, which enables him to make his "price over invoice" deal seem more attractive. It still may be a good deal, but you can't be sure unless you shop and compare.
Floor plan fees and southeast administrative fees ? They want you to pay for the architect who drafted the floor plan of their building and for being a resident of the southwest -- This is going to be the joke of the week at work – Next they will want you to pay for the gas their cars used to get to work that morning. You do have to give them credit for originality though.
Maryjo
Invoice on car alone is $25,942. The dealer is telling me there is a $514 advertising cost. Is this legitimate? How can I get around it?
HanaMaui
I'm surprised some people try to get the holdback too. If you got that, the dealer would LOSE money by selling the car.
Be careful about getting excited over paying at or near invoice price. You may be missing something--such as a dealer rebate, customer rebate, and a loyalty rebate. All three are in effect for most Chryslers. I got my 98 Jeep Grand Cherokee for Invoice minus $1000 dealer rebate (now it's $1650!) plus $300 advertising. If I only waited a few weeks, I could have had a loyalty rebate as well.
-Nick
Take a look.
Anyone should be able to buy any vehicle, with few exceptions, for $200 - $800 over invoice if you are patient and willing to walk away from a deal and shop around.
I have yet to hear for certain if the advertising fee is legitimate or just another negotiable add-on profit. The dealer who quoted the 1998 Chevy pickup for $200 over invoice did not ask for an advertising fee.
I believe dealerships expect to make their profit on used car sales from trade-ins. New car dealerships get some of the best trade-ins and make $2,000 plus on these car sales and turn them fast. It is tougher for a used car lot as they have to get their cars from brokers and at auctions.
I'm finding it much tougher to get a good price on a used vehicle than a new one.
Well, that depends on which invoice you look at. The dealer invoice will include a regional advertising fee; for example, a 98 Mustang GT in MA holds around a $230 advertising fee that is charged to the dealer. Edmunds invoice information does not include this fee. As you said, however, it is a REAL fee, and dealers have to account for it in order to make a profit. Therefore, if you are bidding 500 over invoice and refuse to pay this fee, they may take it off since there's room for such negotiation. You could also tell the dealer to take the equivalent amount (say $200) off the selling price and call it $300 over invoice while still pay for the advertising fee. The result is the same. It just depends of what makes the customer feel better.
It doesn't prove anything to say that one never had to pay it; it may just mean that the deal never got low enough for the dealer to reject the request in order to make the sale. Again, it's a real fee, and so is heat, electricity, maintenance, etc. They have to build this into their sale price in order to make a profit.
-Nick
We pay for advertising in every product. Its just that car companies show you on paper.
I love the car and I am pleased with the dealership (Ed Groves Olds in Clarksville, TN) and the deal. Without Edmund's and Auto-By-Tel, though, I could have easily spent hundreds more.
Many people have said that a new car dealer can sell his car for cost or below cost because they MORE than make it up with their used car sales and their service department. This is a fact!
Bob
Rather then look at the advertising costs separately, I utilized my Edmunds pricing information to come up with a bottom line price I considered acceptable to me. I took the invoice price less the holdback and gave him 2.5% in profit (to include his advertising costs) or $479. This I considered a fair deal.
I view the selling of new cars as only a component of the profitability of the dealership. I believe the largest portion of his profit is generated in the used cars and especially in the shop (with rates as high as $55/hr against bogus standards for repair times.
The only thing I must admit is I was unprepared for the advertising expense and a few other little ones (I have only had to purchase one car in the last 12 years-an accord in January). Is there some way Edmunds could get the advertising costs numbers and incorporate them into the pricing information ?
Your Co-Host
Your Co-Host
OK! We have to advertising and how about their salary and commission....?
Some dealers in my area also charge "processing fee"
With so many blah, blah blah
What exactly should I pay reasonablly? Can someone tell me?
Your Co-Host
[Advertising Charges: All vehicles carry a legitimate manufacturer advertising fee equal to one to three percent (1-3%) of the MSRP, depending on geographic region. This fee is passed on to the consumer without dealer markup, and is non-negotiable.]
I don't like it, but I agree with Car_man on post #30. I was just surprised with advertising fees this week.
TimothyT1