Advertising Fees

cfg1 · November 2001

I'm not expecting anybody to defend that behavior. I'm also not expecting anybody to deny that type of behavior goes on every day in dealerships all across the country.

cwjacobsen · November 2001

Thanks for the clarification, but now I REALLY don't know what your issue is?

CWJ

claywaterfill · November 2001

If you read from the beginning, the original post was from somebody who got up and left the dealership over the "added" advertising fee. They wanted to know if it is right to add on advertising. My point was that it is in the MSRP all along. Even if it wasn't, it is still flat wrong for the dealership to expect the customer to reimburse the dealership the cost of the ad campaign. The car salesmen said it was not and it is not right for them to get stuck with the fee, so they have to pass it along to the customer. Your point was in agreement with mine.

abtseller · November 2001

They left because of advertising being listed on the invoice. Edmunds doesn't account for regional advertising on their invoice price guestimator. When you read the fine print, Edmunds even tells you that they don't account for it because it varies from region to region. The advertising is a legitimate cost to the dealer, as they have to pay it to GM/Toyota/Whoever as a PART OF THE CAR'S COST. It is not a negotiable part of the invoice price as you suggest. There is a huge difference in adding a "sucker sticker" to the MSRP vs. the legitimate advertising costs listed on the invoice.

It is as much a part of the (invoice) cost of the car as the transportation cost is.

Ed

cupholder1 · November 2001

Carsdirect.com seems to take the ad fees into account in their pricing.

I think some of the confusion over the fairness of ad fees come from two sources:

1) Internet sites like carbuyingtips.com which say NEVER to pay ad fees of any kind, and anyone that does so is being seriously ripped off.

2) Bad experiences with sleazeball dealerships that tack on the ad fees as an ADDITION to the negotiated price. Under this scenario, the consumer is surprised by this fee while in the F&I office. Because of this, many will assume that all ad fee charges are dealership scams, just like rust proofing and VIN etching.

im_brentwood · November 2001

But..

Basically, they exist. And I know carbuyingtips.com probably says they are bogus (If they are, how come theyre on SC430 and Thunderbird invoices?

Although I put very little stock in that website for a number of reasons. Biggest of which is that the writer of it didnt get a very good deal on either of the cars he bought!

They should NEVER be added after the fact. If youre working invoice up and see them and they look legit, fine. Work from there.

But if the dealer tries to add them on after you strike a deal.. something is probably up.

Bill

cwjacobsen · November 2001

I WAS there at the beginning, (post #3) and YOUR post saved me trying to set "Clay" staight. Why do people have to make the simple so complicated? Thanks, again.

CWJ

CarMan@Edmunds · November 2001

Vehicles' prices are always market-driven. Rather than wasting time trying to analyze all of the little fees that dealers try to tack onto vehicle's prices, it is important to concentrate on the big picture: the total amount of money that you are going to have to spend to drive off in the vehicle that you want. Heck I could care less if a salesperson tries to add a fee to my deal for the pizza that he or she had for lunch as long as they are offering me the lowest out-the-door price and I am comfortable with them. As long as a consumer comparison shops for the car or truck that they are interested in, it should not matter whether the advertising charges that manufacturers pass on to their dealers are technically part of their vehicle's price or not because they will be getting a reasonable price and perhaps the best price possible for this product in their area. Big picture thinking is the best way to get an overall good deal.

Car_man
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mney6 · November 2001

If edmund's could be like carsdirect.com and give the accurate invoice on a vehicle there would be less stress between consumer and dealer.
If you are going to give numbers on invoices it would be better to be accurate.

fdthird · November 2001

There are so many places on the internet to get prices that I think all consumers should check multiple sites. In buying 3 cars in past 2 years I have had exact numbers for everything but the advertising fee. The funny thing is that the dealer in all three occasions showed lower advertising costs that the internet sites (perhaps they were national averages or on the high side on purpose).

allroy · November 2001

I understand advertising fees are legitimate but have you ever heard of two fees?

Dealer co-op advertising $364
Local advertising and marketing $364

Incidently, this is on a 2002 Envoy in Florida...has anyone ever heard of this before?

cwjacobsen · November 2001

Dealer Co-op Advertising sounds like a legitimate part of invoice. The second one does not. Not saying I'm right, but that would be my take if someone told me that a vehicle's invoice included BOTH of these identical (Hmm?) numbers. But that's neither here nor there. What counts is the price out the door. If I could get my price, who cares how they slice the baloney?

CWJ

im_brentwood · November 2001

First one I have heard of... second one I dont recall.

Is it in the same typeface on the invoice?

Bill

allroy · November 2001

It looks like the same typeface but it is kinda hard to tell..

rroyce10 · November 2001

...... Hmmmm, if it's not on the invoice --- it doesn't count ...

Bill was nice enough to show a couple of invoices, a few weeks ago -- I just don't remember what subject ..... Bill ...?

Terry.

im_brentwood · November 2001

For Fords.. A TOwn Car sig and a Grand Marquis DeSade.

I dunno, if its preprinted.. doubt theyd mess with it, whatcha think?

Bill

claywaterfill · November 2001

Looks like this thread caused a change in Edmunds' pricing. I noticed today that in the section that tells you invoice, etc. there is now a paragraph that mentions the manufacturer's ad fees are legitimate and vary from market to market.

im_brentwood · November 2001

Finally!

The confusion over them has always caused agita...

Bill

vwguild · November 2001

There you go getting ethnic again....LOL

rroyce10 · November 2001

...... Some food for thought ..

If there is an "extension" of some of the programs

-- like there just was, for 0% from Nov to Jan, a lot of the "old" inventory ( on the ground in Aug/Sept/Oct, etc. ) -- might not show on the invoices -- instead, the dealer get's "charged off" his quarterly holdback ...and/ or depending on how he/she has set up their floor plan and such ....

Agita ...? ... isn't that the stuff you get between your toes ..? -- l.o.l...

Terry.

cwjacobsen · November 2001

I don't know how long Edmunds has been refering to advertising fees, but it certainly PREDATES this thread. Once again I refer you to my post #3, and #111 as long as we're at it. "Two say yes" but "I'm not convinced" bobhoey (post #4) started this thread because he was too darn lazy to scroll down a screen to see that Edmund's already acknowledged advertising fees as a legitimate part of invoice.

CWJ

dabronxr · November 2001

vary for quite some time now, this was not "just added" you just had to scroll ALL THE WAY DOWN. For some that seems to be asking a lot.I think this is getting WAY outta hand. Seems people are actually arguing over what they agree on. Yes, advertising is a legitimate fee to pass on to consumer, unless it is imposed as additional fee to the one already buried in the invoice. PEOPLE listen up...No one sells ANYTHING to ANYONE without passing the cost of doing business to the buyer. Who cares WHAT they call it, go to several dealers get ya best price and don't worry about what they wanna call the fees.

bobhoey · November 2001

cupholder1 · November 2001

To cover the dealership's donut and coffee expenses.

Hell, perhaps even charge a fee to cover the cost for the Cable TV in the service lounge...

surffla1 · December 2001

MSRP of my Dodge Dakota is right about $24,000.00. 1% of $24,000.00 is $240.00. Dealer says advertising fee is $450.00? Who is right here?

mney6 · December 2001

Go back and re-read.
Edmunds says from less than 1 percent to as high as 3 percent.
Their both right.
Look at the invoice or go to Carsdirect.com for the accurate invoice.

surffla1 · December 2001

Reread Edmunds New Car Buying Advise FAQ section #12. It says no more than 1%of MSRP. Maybe there is a section on Edmunds I am missing. Could you direct me there?

CarsDirect website says advertising+dealerservices fees together are $426.00. My dealer also wants $189.00 dealer services fee. What I find interesting is if you subtract $189.00 from $426.00 you get $237.00. Pretty close to $240.00. Coincidence?

mney6 · December 2001

The 189.00 service fee is bogus.
It is just a added gross for dealer.
If it is not on the invoice it doesn't belong.
I just clicked on Dodge Dakota trucks in the new truck section and it was their.

afk_x · December 2001

Its nice to live in America. Its called competition.

I suggest you try it out

surffla1 · December 2001

This dealer had the lowest adverising fee in my area (so much for "regional" advertising, everyones was different)and the lowest dealer fees and was willing to give me dealer cash. I just want to know that I am paying a legitimate advertising fee. Seemed rather high to me. I was special ordering from the factory and I shopped dealers from Orlando to Miami, Fla. No one would touch these guys. I guess I should be happy but even $200.00 is a lot of money to me. Again I just want some documentation that is what they paid the manufacturer. I agree dealer services are bogus but others in these discussions disagree. I got the best price I could. I think if there were lots of vehicles with my specifications lining the lots I could have done better. But I saved at least a grand getting just the options I wanted and none of what I did not want. Give and take.

mvargo1 · December 2001

If this dealer has the lowest price, who cares what he calls the fee. If you can buy the car for less here than any other dealer it does not really matter if the advertising fee is $10 or $10,000.

Do you hate the dealer that much that you are worried that they might accidentally make a little bit of profit. So what if your $200 went to dodge, the dealer, the government, the local radio station, or the sales managers pocket. You got a price on this truck that you admit no one else would come close to. What did the dealer do to you that you are so terrified that he might have made $200.

FrankMc · December 2001

prices, that would eliminate the dealers that say they have a low price, but the added fees they charge make their prices the same as everyone else.

Frank

claywaterfill · December 2001

I had Dealer A quote $400 cheaper than Dealer B. When I informed Dealer B that he was high, he suggested I ask Dealer A for his OTD price to guard against bogus add on fees. Dealer B was right--Dealer A's OTD was $200 higher than Dealer B. That's $600 of BS Dealer A added on and was going to trick me into paying had I gone simply on "selling price." Also, it's getting old hearing salesmen cry because they think customers don't want them to make any profit. They make plenty of profit. Why add on BS in the F&I office? That gets us mad. How would you like it if everything YOU bought had BS fees tacked onto them? Besides, it is our job to get the best price. It's your job to screw the customer. There isn't anybody at the dealership but us looking out for us.

rroyce10 · December 2001

..... What do you think is "plenty of profit" ...?

I will bet the last time you bought furniture, the dealer made more money on your couch.

Terry.

surffla1 · December 2001

CarMan@Edmunds · December 2001

Hi surffla1. I completely agree with what mvargo1 said in his previous post. It is important to look at the big picture when purchasing an automobile. As long as the dealership that you are purchasing from has the best total price for this truck in your area, who cares what sort of fees they tack on to your deal. Heck I wouldn't care if my salesperson tacked a fee on my deal for the pizza that he/she ate for lunch as long as they were giving be the best out-the-door price.

Car_man
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alexander46 · April 2002

I am still trying to settle the debate about whether or not advertising fees are a legitate cost to the dealer, at least for GM vehicles .I have a current 2002 Chevrolet Tahoe invoice in front of me. It is from Dallas, TX and has advertising fees of $362.05 and $181.05. It specifically says that the invoice does not reflect holdback and "return to dealer of advertising monies". That means to me that the manufacturer reimburses the dealer the holdback amount and advertising fees when the vehicle is sold, thus the ad fees are not a legitimate cost to the dealer and you should not pay them. Please let me hear from a GM dealer or sales person and, if I am not correct, what does the term "return to dealer of advertising monies" mean.

pluto5 · April 2002

Good question, I would like to know the answer, too, but would not hold my breath. I suspect there is some co-op advertising going on where cost is shared but the exact transaction is a mystery. If you don't like paying for advertising, why don't you just subtract it from your purchase offer?

lonesomeduv · April 2002

Where did you get the invoice?

Also, any idea why there two amounts listed?

alexander46 · April 2002

The invoice came from a dealer in the Dallas area. There was a dealer co-op ad fee of 362.02 and a local ad and marketing fee of 181.05. The MSRP and invoice figures matched Edmunds exactly. I advised I wanted to pay no more than $1000 over their true cost (invoice less rebate, hold back and ad fees). The price they quoted me is $900 over true cost and according to their invoice and Edmunds, they are not charging me for the ad fees.

audia8q · April 2002

At the end of the year....IF the ad fund has not been totally spent a portion MAY be refunded to the dealer body.

bobst · April 2002

The dealer owns the car, and if you want to buy it you have to offer them enough money to make it worth their while. Our goal is to determine the lowest price the dealer will accept.

If you don't want to include an advertising fee when you determine how much you are going to offer for a car, that's fine. If the dealer chooses to not accept your offer, that's fine too.

After you have had your offer refused at a few dealers, you have a good indication that you have to increase your offer if you want that type of car.

That's about all there is to buying a car.

Bob

mirth · April 2002

The key, of course, is to make it clear to them that your offer includes ALL fees so that they don't pop up after you thought you agreed to a final price. This is how dealers trip up the $X above invoice people.

alexander46 · April 2002

It is true that our goal is to find the lowest price that the dealer will accept. However, its seems to me you have a much better chance of determining that if you know how much he has invested in the vehicle . Then start at that point with who will give you the "lowest price". Starting with no information or incorrect information can get you a "lowest price" that is hundreds above what the dealer really needs/wants. Of course the dealer has the right to set his profit margin but that can be done honestly and truthfully. Until dealers, as a whole, decide to do that, you will have to do the legwork to get a deal that is good for both you and the dealer.

artwis · April 2002

I don't know how the customer can figure out the dealers exact cost for a vehicle. They may be getting dealer cash back from GM, they get a payment back periodically from GM based on sales satisfaction etc., and I'm sure there's other cost factors. Holdback is intended to pay for the dealers expenses such as interest on unsold inventory. Most dealers will not consider giving up the holdback. The national ad fee is legitimate and added to the dealers invoice cost of the vehicle (read Edmunds explanation of ad fees). Coop ad fees are questionable. Your making too much of a problem out of buying a car. Check out prices from a handfull of dealers and you will probably find most will have comparable prices for the exact same vehicle. Then set yourself a price you are willing to pay and if it's met buy the vehicle. Good Luck!

audia8q · April 2002

What about the dealers costs associated with selling the car? building costs, salaries, phone bill, lights, etc...These are all legit costs of selling a car.

The typical dealer has $1200 in costs to sell a new car. So, any gross profit below that is essentially a loser. So take invoice and add $1200 and you have what the car costs the dealer to sell you...anything above that is profit.

Rich

lonesomeduv · April 2002

I wonder why a car dealer would provide a potential customer with an invoice. That seems like a pretty stupid business practice to me.

mney6 · April 2002

I have customers coming in every day with stacks and stacks of info from the internet.
No problem except half of them have no idea of how to use it correctly.
If you take Edmunds invoice pricing 10 times out of ten the invoice they get is wrong.
The consumer only reads what he wants to and they never allow for the ad fee.
10 times out of ten we are called a liar.
This causes a lot of friction between both of us.
It is alot easier to show you the invoice and let you see the true numbers

artwis · April 2002

I agree! Edmunds TMV does not include the ad fee. I haven't looked to see if they explain this on the new version of their pricing site ( the new site is TERRIBLE!). They used to have it on the last pricing site but it was kind of an addendum under the pricing and was easily missed. On the cars I was looking at over the winter the Edmunds pricing site was nearly always right on as far as invoice but neglected the ad fee. There's good info on the internet but I agree lots of folks don't get ALL the information and then feel that their being cheated somehow. Why do people want to make the car buying experience so difficult. It's like they want to do battle with the salesman or dealer and in most cases that doesn't end up being a very pleasant for anyone involved. I bought my first new car 37 years ago and from my experiences you get treated the same way you treat the other person. The best deal is usually the easiest deal as far as my experience as the customer.

montanafan · April 2002

This topic comes around every once and a while. The issue/question comes up because they are listed on the invoice, if they were in the price there would be no questions. The best explainations I can recall include the following: a) Because these amounts are usually a percentage of MSRP, first MSRP must be figured. Becuase invoice cost is usually in the column next to MSRP, it is subtotalled. Then the ad fees are added. b) Because these fees go to different places for different reasons, they are given different account numbers, which requires seperate listing (think about your paystub and the seperate listings for the taxes withheld) c) Becasue many employee/supplier plans exclude these amounts, they have seperate listings.

alexander46, what are the words after the ones you quoted? Something like " which may or may not apply to this car". I think it reads like that, it did when my brother got his 2001 Montana.

Advertising Fees

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