 Negotiate Car Purchase: What You Are Really Paying For
Posted by carsandtrucks on Monday, February 04 @ 10:54:20 PST
There is more to negotiate when buying a new or used vehicle then just the price of the vehicle. Dealerships have been forced by competition to lower the sale price of their tangible product, the car or truck itself. To bolster shrinking profits for the car or truck, the dealer finds other profit centers. These profits come from items like documentation fees, dealer prep, extended warranties, finance handling charges, and other add ons. These are all legal additions that the dealer can
add on to the asking price of the vehicle. They are all also negotiable. The documentation fee, for instance, is what the dealer charges you to prep the title and sales paperwork. I accept that there is a cost associated with preparing this paperwork and the dealer should be paid for it, but I have a problem with documentation fees that approach 3-4 hundred dollars. I feel the same way about dealer prep fees on a new vehicle. The manufacturer reimburses the dealership for prep fees. So if the dealer is charging you they are getting paid twice for this service. Tell them you won’t pay prep fees and they likely will take it off the buyers order. In the case of the extended warranty the dealer buys the warranty from the manufacturer or an insurance company. In turn the dealer marks up the price of the warranty to you. Don’t be afraid to make an offer of 2 or 3 hundred dollars less then the asking price for the extended warranty. I am not advocating that a dealer should not be allowed to make a profit when selling services that are associated with sale of a new or used vehicle, but I am against a dealer gouging customers just because the customer does not realize the items are open to negotiations. Before you sign the buyer's agreement, look at each line, see what you are paying for and don’t be afraid to negotiate each line. You will find by doing so you will save some money on more then the price of the car or truck.
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