Look for hidden dealer fees when buying a car

A car buying consultant named Tom McParland shows how car dealers sneak in bogus and questionable fees to pad the price. He compared invoices for the same car from two different California car dealers. One dealer charged $10,000 more for the same car.'

From Jalopnik:

Let’s have a look at this quote line by line. The MSRP on the car is $74,765. The dealer is offering a discount of $5,780 and there is a $1,500 rebate from Chevrolet, bringing the total discount $7,280. That seems pretty good for a brand new Corvette.

Then we have a dealer fee of $449, a California tire fee of $8.75 and a documentation fee of $80. All of which are within a reasonable range for additional fees in order to process the paperwork for the loan and registration.

It all goes downhill from there. There is a random non-taxable fee of $131, a “VSA fee” of a whopping $3,500 (I have no idea what this is or why it costs this much), a “Perma Plate” for $995 (license plates are already included in the DMV fees), a GAP insurance policy of $995 and a “maintenance” fee of $2,495 (You don’t really need a maintenance plan on a Corvette.) The grand total for all this comes to an extra $8,116 tacked on!

(I entered the VIN number on the invoice, and this is the car.)

Notable Replies

  1. The auto dealer industry is a diseased parasitic infestation. Imagine if your local big box store charged you a "dealers fee" to buy a TV. Auto dealers are a racket which has lobbied for laws that benefit them at the expense of both the manufacturers and the customer to force you and the maker, for no good reason whatsoever, to exchange goods through them. Because they provide nothing of real value, they can only make money by jacking up the price for no reason. They're an unnecessary part of the supply chain, thugs who have muscled into the transaction to bilk the buyer and the maker.

    Car salesmen are paid next to nothing because of similar laws to those governing pay for waiters. Except unlike waiters, they don't help you, they help the dealership franchise. They're paid on commission for separating you from more of your money than the vehicle is worth. Car salesmen are confidence men, con artists, walking talking sleazeballs who's "job" is to take advantage of people, most often when they need a vehicle and are paying for a rental or ride-shares or public transportation because their last and only vehicle has died on them.

    I have no more sympathy for someone who makes a living as a car salesman than I do for a mob enforcer who rings protection money out of neighborhood businesses. As far as I'm concerned, the lot of 'em should be third against the wall when the revolution comes after the politicians and the bank CEOs.

  2. I didn't realize just how nasty things were until I watched this the other day.

    I'd heard of services whereby one can hire someone to endure the frustrations of buying a car for you. (Presumably the task of finding and hiring such people is marginally less arduous.)

  3. That's fine, but dealers do the same thing to people buying a Ford Focus, often an even larger percentage of the base price. The people buying cheap cars can less afford to have a professional buyer uncover those rip-off fees and negotiate the deal for them.

  4. The first and only time I ever bought a new vehicle from a dealership was my 1994 Toyota Hilux pickup. Since I bought it in October of 1994, the brand-new-for-1995 Tacomas were arriving the very next week, so the dealership was clearing out all the '94s by pricing them at $7,500 for the rock-bottom base model. No A/C, no radio, no rear bumper, 4 cylinder engine, 5-speed manual transmission. I paid $150 extra for metallic blue paint. The dealership tried to upsell me on a few things including financing, even trying to get me to finance some air conditioning, but no dice: I paid cash.

    And I had two other advantages: I am not clueless about cars (performed all my own maintenance and what little repair it required, up to and including a new clutch at 180,000 miles), and I did intend to drive it into the ground. I eventually gave it to my niece. Last time she checked it was still boogieing along up in Alaska with 300,000 miles on it. Best $7,650 I ever spent (plus tax, license, and doc fees, which I believe added up to less than an additional grand, IIRC).

    I'm sure I'll never see another screaming deal that awesome again.

  5. Plus you bought a Hilux. Those things are near-indestructible, as any Somali warlord will tell you.

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