Manufacturer’s suggested retail price (MSRP) is just that, a suggested price the manufacturer. Most people look at the MSRP and negotiate that price. There are other prices that are variable that can be negotiated. Some states have stepped in and regulated the fees, others allow you to negotiate the price. Most the time these fees are presented after you have negotiated the price of the vehicle.
You know that nice salesperson who places the finance papers in front of you, with a nice Mont Blanc pen, theirs, not yours, to sign so that you can drive away in your dream vehicle? They’re not your friend. They’re a salesperson. They are still negotiating with you all the way up until the time you sign that last piece of paper and take ownership of your car.
Remember, nothing is negotiable unless you negotiate. If you don’t like the dealer’s final number, be prepared to walk. The salespeople are banking on you becoming emotional about the car, about wanting that particular car, wanting to own that particular car. Don’t become emotional about a car. It’s not a one of a kind; it’s a one in a million, or at least 100,000.
Some of these fees are;
1. Documentation fees – doc fees, documentation fees, processing fees, call them what you want, it means more money to shuffle a couple of papers. Doc fees are the one fee that some states have regulated but expect to pay $100-$400. Really, someone has to pay for that Mont Blanc pen.
2. Destination and handling fee – or shipping and handling, or freight fee. I’ve never understood why this fixed fee is not part of the actual cost of the car, but somehow it is not, but it is always passed on to the customer. It can be higher in Alaska and Hawaii.
3. Dealer prep fees – Besides having a teenage kid wash the car, what else does a dealer need to do to it before they sell the car? Exactly. Tell them you’ll wash your car yourself. Negotiate.
4. Advertising fees – If you’re buying local, you should really negotiate hard on this one. Advertising money is spent to bring in the wayward buyer that normally wouldn’t come to the local dealership to buy a car. Advertising fees can also be passed on from the manufacturer to advertise the brand. Negotiate because you know the brand and because you bought locally.
5. VIN etching – The vehicle identification number (VIN) is placed on your car in multiple locations, but a new rage is etching it on the windshield. Dealers do this in case the car is hot and might be stolen. Do you really think the thief wouldn’t notice a VIN etched on the windshield? In some cases you are correct, but the professional would notice. Etch the VIN yourself, on the windshield, and other places that only you know. Tell your dealer you don’t need their help; it’s a secret where you’re etchings are going to be. You don’t show your hidden tattoos to just anybody!
6. Sales tax – Of course you have to pay sales tax. How else would Congress have all those benefits in their retirement age? Sales tax varies by cities, counties and state. Know the difference. Negotiate knowing the difference.
The bottom line: Negotiate and be willing to walk if the seller won’t negotiate with you.