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Is "admin fee" legit?
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11-13-2005, 05:10 PM | #1 | |
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Is "admin fee" legit?
I noticed on my quote that my dealer is charging me $200 (CAN) for admin fees. Is this legit? It seems like my sales rep did most of the data entry. So who does the $200 go to? A secretary? To do what? Type in my name for $200? I have only placed a deposit on my car, I haven't paid for it yet. Do you think I should have a talk with the manager and convince him/her to waive the fee or reduce it to $20? Or else threaten to give them 0's on the all-so-important BMW customer survey? Hehe. Your thoughts?
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11-13-2005, 05:25 PM | #2 |
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Admin fee, advertising fee, doc fee, license fee, transaction fee, disposition fee, dealer prep fee, ....... they have more fees than excuses for why they have fees. Keep going after them and they should give in on one/two of them... But I'm sure they'll make it up somewhere else before the bottom line.
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11-13-2005, 05:50 PM | #4 |
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I wouldn't go on the offensive or threaten anyone with anything. Take it gently, gently. Know how to handle yourself and the dealer. If you are not sure you are being dealt a reasonable deal, compare it with another.
If you start threatening zeros on surveys, they will only go on the defensive and your buying experience may be tainted. Negotiate, just like the other guys suggested. Don't be in a hurry, you may save yourself a fair amount of money. Remember, the dealers have seen and heard it all, day in day out over many years, so nothing will really surprise them. All the best in your negotiations.
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11-13-2005, 06:49 PM | #5 |
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First, I built an excel spreadsheet first with the dealer invoice (kept this for myself). I sent an email to 3 dealers (you can do more but it gets more complicated). Then I visted the dealer that I felt I was going to do business with based on location so that they knew I was serious and not just a guy who sent out internet feelers.
He started at $2,000 over invoice and we ended at $750 over invoice with no dealer fees included. The additional internet quotes are a backup for additional leverage. Just make sure you are prepared to walk away. I also dragged it out over 2-3 weeks to make the dealer work for me and to build a semi-relationship. Be firm and prepared to buy. Once you agree on the numbers run them through your spreadsheet as one dealer tried to pull a fast one on me by agreeing to a price, but using a different set of numbers. Andy
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11-13-2005, 07:11 PM | #6 | |
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Also the sales associate may ask you how much can you afford a month? avoid this question and get back to the bottom line price. if you say $450 a month, (knowing in your head that that's what your calculated payments would be from the spreadsheet with a 60 month term) they may say okay done deal, but end up putting you in a 6 year term at $450.00 a month! So, what you can afford is none of his/her business. Always keep to the bottom line price and don't let them mislead you with they're sneaky mind tricks of the darkside
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11-13-2005, 07:22 PM | #7 | |
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Hehehe...what's your definition of legitimate? Is it legal? Perfectly. Is it "earned"? Probably not. Is it ethical? They will try to make money from you any way they can. Is it negotiable? You betcha. BTW this is not just an auto dealer thing. For those of you in the US who own homes (and didn't pay cash), take a look at your HUD-1 settlement statement provided at loan closing, and see how many fees are there that don't make sense - "processing", "underwriting", "admin", "doc prep", "funding", "wire", "origination", "yield spread" are just a few of the many.... You almost can't escape this sh*t no matter what you buy. My dealer refused to eliminate the $145 doc fee, so I said fine, but made them lower the car's purchase price by a like amount. I don't care what you call it, so long as I'm paying the total amount I wanted to. To make a long story short - no, $200 admin is a joke. If you want to have some fun with it, do what I did and force your salesman to prove that his admin costs really are that high, because he can't do it. If he has half a brain, he'll be honest and admit it. Aside from all that, be happy with the deal you finally negotiate, don't worry about such a small amount of money, and enjoy your new car.
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11-13-2005, 07:43 PM | #8 | |
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11-13-2005, 09:20 PM | #9 | |
guardian of ice and snow
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Thanks for the comments!
Okay, I'll play nice and negotiate I'll tell the manager that unless he can justify the $200 admin fee, I'm not willing to pay it. Well, I would pay $20, but not $200.
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11-14-2005, 06:46 PM | #10 | |
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Plus, I used to work for a national lender that only charged 4 fees: appraisal, credit report, flood cert and tax service fee. None of them were upcharged. The total usually came out to $400 or less. No processing, origination, underwriting, doc prep, etc. required.
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