Tonight our 21 year old Son found a used car that he wanted at a local Honda dealer. This is his first car purchase and he asked me to go with him. To say I was shocked at the deal they offered us an understatement. When they showed us the deal I was so shocked I just got up and said “We’re done here” and walked out.
It’s been decades since my wife and I purchased a used car. We’ve only bought new and have very high credit scores so always got what I considered a fair deal. Perhaps purchasing a used car has changed so much I didn’t recognize the game, but I think what they did was sleazy. Just wanted to get some of your opinions.
The car he was looking at is a 2010 Sion tc that has 123,000 miles on it. The car was in excellent condition with a clean Carfax report. The dealer was asking $4991 for the car which was a few hundred under the KBB value. So far so good.
We took it for a test drive and we’re very happy with it and he decided that he would purchase it. I was expecting a few hundred dollars for tax, tag and title and a few more hundred for sales tax. We went to finalize the deal when the dealer brought in a sheet of paper with the numbers on it. WOW! The total dealer fees and government fees were $3638.03! Bringing the price of the $4991 car to a eye watering $8629.03! Their fees nearly doubled the price of the car! Here’s what they tried to add:
Pre Owned Advantage $1395 (Told this was the prep fee to detail the car, change the oil and have their tech inspect the car)
Dealer Fee $989
Electronic Filing Fee $299
Government Fee $400 (I have no idea what this is for. I would assume title and tag although I’ve always seen it listed as that when I bought a car. I’m in Florida and the tag and title fee charged by the State are about half that)
Taxes $555.03
Taxes and title and tag feed are understandable, but I’m at as loss how added fees could double the price of a used car.
Am I just out of touch. The dealer tried to tell me that every dealer charges about the same. If this the way it is or is this Honda dealer out of it’s mind?
Likely they were trying to take advantage of a young, naive first-time car buyer.
They’re INSANE.
I’ll be watching the thread with some interest, as it seems likely we’ll need to buy a used car some time this year. I’ve never bought a used car before - only ones we’ve ever owned were the “what we could afford” first cars gifted by our parents. But I definitely have the impression that used car dealers look upon purchasers as their rightful prey.
I’ve bought used cars from individuals, Carmax, and a Toyota dealership.
From the Toyota dealership, I confess I was a little dishonest. When I saw all the weird pricing and stuff, I said, “Look, we are also considering a similar car from Carmax, for $20,000 all told, but that’s gonna take a week to get here. If you can get us out the door for $20,000, we’ve got a deal.” I wasn’t including the taxes and everything, so I was lowballing a bit, but I don’t think I’ve yet lost sleep over my guilt. Anyway, they came back a few minutes later with paperwork that got us out the door for exactly $20K, all taxes and fees included. I think I did well? I still don’t know if I could’ve gone a lot lower.
Carmax, though, is where it’s at. They’re very up front with price information, in exchange for (I think) charging a little more than you’d be charged at a used dealership, if you’re good at bargaining. I find the lack of stress super-appealing, and will continue to buy from them unless there’s a good reason not to.
That business of jacking up the price like that is loathsome, and I think you did the right thing by walking away.
Which is paid when they bought the car by lowballing their purchase price. So charging the buyer is double-dipping.
Some states require dealerships to charge everyone the same dealer fee so they say my hands are tied. That amount can be negotiated elsewhere like reducing the sale price by $489 to make it a “$500 dealer fee”.
They should have explained exactly what these covered, not only to prevent you from BS fees but so there are no surprises when you go to the DMV to register/title the car and find out they were not paid.
It’s been a long time since I last bought a used car, but the “Pre-owned advantage” and “dealer fee” is stuff that should be covered by the difference between what they paid for the car and their asking price. Posting a lower price, then jacking it up with these fees is flat-out dishonest. Your response was the right one. Sounds like they’re taking lessons from the airlines to devise their pricing policy.
The “government fee”, Electronic Filing Fee and Taxes may be legitimate, but seem inflated. What number do you get if you multiply $4991 by your local sales tax rate? What’s the actual registration fee on a car or that age?
Definitely a total ripoff.
I concur with negotiating an “out the door” price. Doesn’t matter what story you give them. Just “Get us out the door for $X and we’ll take it” is all you need to say.
I’m trying to buy a used Jeep and this is absolutely my tactic. “My out the door is $X. Can you make that work?” So far, out of 3 test drives, 2 of the sales people have gone back “to talk to their manager” and come back with “yeah, we can make that work”. Unfortunately, both vehicles ‘failed’ the test drive. The only reason I took the other test drive is that the manager was working with someone else and I figured I could at least drive the thing while he was futzing around. Normally, I won’t even test drive until we’ve come to some agreement on price.
I’m not in the US but have seen some similar stuff.
The whole pre-owned advantage is supposed to be a scheme whereby you are buying back into a factory backed ownership scheme. It is IMHO mostly BS for buyers. But is supposed to be a way for dealers for a given brand that sell new and used, and to suggest that buying inside the dealership ecosystem means the car is somehow better and you will be looked after better. Maybe for a 3 year old car there is some sense in this. For a 14 year old car, it makes no sense whatsoever.
Overall, buying used from a new car dealer is always going to be a bad deal. They are not really set up to be in the used marketplace, and are trying to get the same sorts of margin off a cheap used car as they would get from selling a new car. In the modern world that usually means they make no money from the car, and everything from whatever else they can convince you to pay for. They will have got the car as a trade-in. They paid something akin to the trade-in value. (It may have come from another dealer who did the trade, used cars can be quite mobile inside the various dealer channels.)
Walking was exactly the right answer. If the salesdroid didn’t stop you leaving with a better offer, they were never serious about you anyway. A friend of mine used to say “the deal is never done until the lips of the salesman have turned blue.” They are the enemy, their only goal in life is to extract the maximum amount of money from you. Walk into dealerships with this foremost in your mind.
As above, give the salesdroid a target to meet to close the deal. Make it his problem to get you what you want for the money you have. This can also be played as negotiating from a position of weakness. If it is clear that there is no more money to be found (ie weak position) this provides the goal for the salesdroid. A parent going in with son signals to the droid that there is more money to be found, especially if the parent is the one doing the buying.
Make it clear that there isn’t more money. Take his mother in as well, and prime her to be grumpy and ready to nix the deal the moment the prices get even a trifle high. Make it clear that you and son are negotiating from a position where mother must remain happy. And research the prices taxes and the like. Be ready to catch a droid out lying about these.
I’ve paid the government sales tax. I’ve paid the government underpayment fees (penalties). I’ve never paid the government a “government fee” and I’ll eat my hat if such a nebulous thing exists.
The reconditioning fee is AT BEST part of a bait and switch and at worst theft. The fact that the reconditioning fee takes you so far over the KBB tells you all you need to know about that. And as others have said, did they expect a Dealership Electric Bill Fees? What, are they a hospital now, adding 30% overhead to all their contracts?
Same here. I tell them what I want and what I’m willing to pay - if that doesn’t work, I’ll keep looking. I once had a guy say the manager had left for the day and couldn’t approve my price, it was his daughter’s birthday and he didn’t want to bother him. I told him “Totally understand. Here’s my number. Give me a call when you’ve worked things out, if I haven’t bought something else by then I’ll stop by.” Without batting an eye the guy completed the paperwork.
Exactly. Especially for used cars, there is a maxim in the industry: If a customer leaves, they won’t come back. Even if you say you will, they won’t expect it, and operate as if the deal will be lost the moment your feet hit the outside. In truth, it is a good maxim, because it usually is true.
Yes, some of them are insane. 10 years ago we were looking for a used car for my mom. We found a RAV-4 at a dealership 10 minutes away for around $8000 and went to take a look at it, liked it and asked about price.
The salesperson sat us down to run some numbers, and then said “We also charge a twenty nine ninety five cleaning fee.” We assumed that he meant $29.95, and said that it sounded like a good price for cleaning. He look very uncomfortable, so we asked, in disbelief, “You mean the cleaning fee is two thousand nine hundred ninety five?”. He nodded; we got up and said “We’ll have to think about it.”
When we got home, we looked up reviews for the dealership and found loads of them complaining about the $2995 “cleaning fee”.
We bought a minivan from the local Carmax and it probably ended up spending more time with them for repairs than it did with us. For awhile, they let us have another minivan as a loaner before it was put out for sale; that one had its own problems but at least it got us where we wanted to be.
Per Car & Driver- What fees are charged when buying a car in Florida?
Additional Fees After Buying a Car in Florida
These fees — separate from the sales tax — are typically collected by the Florida Department of Motor Vehicles, not the Department of Revenue. They include things like: Title Fee: $75.75. Registration Fee: $1.60-$91.20.
But apparently it is normal in Florida to rip off buyers- https://www.hyundaicfl.com/why-buy-hyundai-of-central-florida-near-orlando-fl/#:~:text=%24799.99%20is%20the%20average%20dealer,will%20pay%20for%20the%20vehicle. 1. What this means: an administration fee to buy a vehicle; in simple terms, profit to the dealer. 2. It is a real charge that 95% of all dealerships in the state of Florida charge on all their retail sales. 3. $799.99 is the average dealer fee charged in the state of Florida and up to $2,000 at some dealerships. 4. It is real money that is added to your buyers order! After you agree to purchase the vehicle, it’s an extra charge to the bottom-line that you will pay for the vehicle.5. When most car dealerships advertise prices, they are significantly lower than the real cost to you. This is because they usually do not include all their fees up front, they add them on later after you come to the store and agree to purchase. 6. There are several names for dealership fees like: process fee, doc fee, administration fee, dealer fee, service fee, etc. 7. Remember, any extra charge, beyond tax & tag, is a dealer fee.
I never understood why buying a car is so complicated in the US. Usually cars are listed online here, on what I assume is the equivalent of Craigslist. The total price is right there, and because all the other cars are also listed, they can’t really rip you off. Sure, you can haggle a bit, but you are unlikely to gain very much from it.
(Both dealers and private sellers are listed here)
In the Socialist Monarchy of Great Britain and Northern Ireland, The windscreen price at a dealership is the price you pay. The only additions are for the Vehicle Excise Duty (VED) which varies according to the emissions, and insurance.
As well as this, a buyer has the legal right to return the car in the first 30 days if the vehicle fails to meet any of the requirements detailed in the description. If anything goes wrong in the first six months, the dealer has to put it right or make a full or partial refund.
Dealers often try to sell warranties (not usually worth the paper they are written on) underseal and any other additions they can think of.
Yeah - when we bought our Saturn, it was a much smoother process. Every other car we’ve bought since then has had various BS add-ons like destination fees. And this last time (late 2020) we had to sit through a half hour of attempted add-on stuff like additional protection, replacement keys etc. (which, if we tended to lose car keys, would actually have been a good deal - something like 500 bucks would have gotten us one additional key per year).
My daughter told me that in her town in Vermont, most used cars are sold via Craigslist or the like - and yeah, there you are getting the real price up front. Of course then you have to be able to get the car inspected in case it has hidden problems. I’ve never bought a car that way; I did sell our minivan, back in 2006, via some online car-selling site. We asked 1900, the prospective buyer offered 1600 cash, and we took the deal.
We’re more than a little nervous about buying a used car, because there’s always the thought of “what was wrong with it that the previous owner got rid of it?”. Aside from our first junkers, virtually every car we replaced was because it had become unreliable (a quite new Dodge Omni, a 10-year old Caravan), or had been driven to death (the first Civic - totalled in an accident, the second Civic, at 22 years old wanted thousands in repairs). The Saturn was the one exception - traded it in at 3-4 years old because I wanted a minivan.