I wi) repeat since someone e is trying to justify 500 in paper work charges. The dealer is required by the dealer license to fill out all forms and submit to dmv. If your being charged for it the dealer is ******* I n g you. The paper work and submission is done electronically and saying it takes an army of people to do it is the most asinine statement for 15 minutes of paper work. The detailer porter etc. They charge a dealer prep fee for basically a 995.00 car wash. Yes dealers have many ways to screw the unsuspecting public
Do you work in dealerships? I do in a consulting role for the past 14 years and have seen the ins and outs first hand. Laws and requirements vary by state but there is a lot more than 15 minutes work on the back end. I didn’t even mention the compliance portion of things, most dealers have a third party or internal auditor who inspects a number of deals to ensure compliance with state and federal laws to prevent things like discrimination or predatory lending. A seven dealership group in northern AZ was shut down by the feds last year for not following all of the rules related to transactions involving Native American customers. Another dealer in my town just got hit with a $150K fine from the feds for not having the Moroney sticker visible on every new car sitting on the lot.
Every dealer I have purchased vehicles from in AZ, CA, NV, and CO have had some kind of dealer doc fee that is preprinted on their purchase order. Colorado was the cheapest at $200 in 2008, others have ranged from $400-600. The $500 average in AZ is high, but once the dealer sets a fee they are required to charge it consistently to all patrons or potentially face a discrimination lawsuit. ******* you or not, it’s how business is done in many states. You can repeat your opinion until you’re blue in the face, but you aren’t going to change anything. I’d rather people understand the fee rather than think it’s 100% dealer profit. It may indeed be 50% profit, but my point was that there are costs involved.
In my case the sales tax and vehicle license tax, which will cost me $10K over 7 years, is a far greater concern than the dealer making a few bucks on fees and god forbid holdback. I’m buying my truck from a small market dealer that doesn’t do that much volume. They are making $1000 over invoice, probably $2,000 in holdback, and the ever so horrible $500 in doc fees on my deal. $3500 in gross profit, less in net profit, doesn’t seem out of line on a $63K deal. Most businesses are shooting for far greater than ~5% gross profit. Even at MSRP my deal wouldn’t be more than ~11% gross profit. Dealerships aren’t all crooks, but there isn’t a Red Cross on the side of the building, they are there to make a profit like any other business. In most dealerships the sales department largely breaks even, and their actual net profit is made in service and parts.
