It is, as far as I can tell, impossible to buy a new car in the US without paying some form of delivery, destination or shipping cost. I am about to do some deeper research on how these fees are applied, but I’d like to plumb Doper depths as a starting point.
In your experience, are these fees in any way proportional to actual shipping and delivery costs? That is, if you live within 25 miles of the plant, are the charges nominal, or at least lower, than if you live 1-2,000 miles from the assembly line? Are imported vehicles cheaper near the ports, with added costs towards the middle reaches of the country? Or are the fees flat, $2-3-500 for all buyers, regardless of locations?
AFAIK, the shipping costs are the same at most dealerships. This prevents what you mentioned, the dealers closer to the plant having a better price. Everyone pays the same and the dealerships are all on a level playing field. Having lived in Michigan, I have been at dealerships in close proximity to the auto plant and the delivery charge was still there, and the same amount as other locations.
They’re a flat fee, supposedly based on the average shipping cost of all cars to all dealers.
It wasn’t always that way. Decades ago the delivery cost more closely reflected the actual cost for each dealer. This led to dealers complaining that their customers would drive across the state line or up to central Michigan or wherever to get a cheaper deal that the local dealer couldn’t match.
As mentioned, it is a flat fee, and the dealerships do indeed pay it to the manufacturer. Just as most retailers pay shipping fees to have merchandise delivered, so do auto dealerships. As a consumer/buyer, all you need to do is make sure all competing price quotes include delivery. Some dealerships quote a price that doesn’t include the delivery fee and then spring it on you at the last minute. Since all of them pay the same delivery fee for any given model, there is no point in dwelling on how much the fee is, so long as all price quotes include delivery to the dealership.
Good answer, and one that makes sense from a seller perspective. Thanks.
(I’ll consider the question closed unless someone has conflicting info to add.)
It does make the charge even less understandable than before, though. Of COURSE the vehicle has to be delivered, and it’s not unreasonable for all or part of that cost to be passed on to the buyer. But being anticompetitive is just self-serving, and leaving it out of the vehicle cost is just plain deceptive. (Before some econ major comes along to patiently school me, view it this way: it’s a fixed and nonnegotiable cost added on to every vehicle, no matter where I buy it. Why should it be separated from vehicle cost any more than it is for other large, heavy items like furniture, yard equipment etc.?)
It’s just a gimmick to hide a few percent of the cost from advertised prices, the more so for being fixed instead of actual.
The real American answer would have been for the dealers to try to undercut the cost of driving up to Michigan to pick up your own car. E.g. maybe Bill’s Chevrolet of Podunk charged $200 in delivery fees to customers, but customers found that the cost of a bus ticket to Michigan, gas to drive a new car home, and the delivery charged by the dealership across the street from the plant only added up to $150, so they started to do it themselves. So then the dealer could have investigated doing that himself - going to Michigan to pick up cars and bringing them back for $120 (maybe he can get a super discount on a 50-pack of bus tickets), then charging $140 in delivery charges for each car. Boom, profit, and a disincentive to try the pick it up yourself scheme yourself. It’s the American way!
Yeah, it seems to me that a “delivery” charge should really be an convenience fee that dealers would try to shovel onto a customer’s bill with fast talk, but would technically be optional. Sort of like how today, sales reps push extended warranties and whatnot - you don’t have to buy them.
Our dealership’s oh-so-convenient blue ribbon delivery service is oh such a good deal at only $200 per car, won’t you sign on the line please? No? Well I hope you enjoy your trip to Michigan, I hear it’s cold this time of year! <scowls>
I’ll concede that delivery is a legitimate part of a vehicle’s cost, but it should be competitive and proportional, not… everything they are now.
At least it’s not a… (takes a deep breath, grits teeth) documentation fee. I have left keys and a contract with some long numbers on it sitting on a salesman’s desk over that $35-$50-$100. And they are so committed to the gouge that they let me walk.
I guess I don’t understand the first sentence. Would you really want the delivery fee to vary from store to store? So then you would feel the need to research actual and charged fees from store to store, or state to state? Just ignore it and make sure it’s included in the price quote you get from each dealer.
As to your second sentence, there you are hitting on the shenanigans dealers play. Some fees are legitimate, such as various taxes and government charges. But some fees that are pre-printed on the dealership’s sales form are BS. Dealer prep? Do you ever sell cars that are not cleaned up and ready to drive? Documentation fee? WTF is that?
I have to admit that I’ve paid a couple hundred in BS charges when I’ve bought cars. At that point in the game, I just didn’t have it in me to argue and re-open the deal, which is just what the dealer wants. The way to really handle it is to make each store quote an “out-the-door price including all taxes, tags and fees”, and then let them monkey the figures around on the bill of sale to satisfy the pre-printed form.
I find it unreasonable that a required cost is (1) arbitrarily set and neither related to the specific cost of that vehicle’s delivery to the spot I’m standing, nor (in all likelihood) to anything like the real average cost of delivery in my region; and (2) as much a fixed and required part of the purchase prices as the tires and engine, but shell-gamed into a separate category. It should either be a fixed part of the vehicle price (and let accounting and marketing slug that one out) or negotiable and proportional to actual cost.
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Paying the clerk in the end stall to hit “print” and roll out the reams of paper involved with a vehicle purchase. IOW, they’re getting you to pay their employee CEO wages to do junior bank-teller work.
Related to this BS, when I bought an Infiniti FX35 new from a dealer back in 2003 when the car was first introduced, they had a non-negotiable “marketing fee” of $300 attached to all vehicles. As in “hey, we had to do a lot of TV and print ads to make you aware of this car, so we expect to be paid back for that.” I fought that fee tooth and nail, walking out of two different dealerships and ultimately buying at a third one, but this was truly non-negotiable and they would not remove it.
I couldn’t believe that was a real thing and that a car dealer would dare to charge that and not at least hide it within the ‘tax, title, and destination’ charges, but there it was…
We have the same bull over here. The so called delivery charge bears no relationship at all to the actual cost. Manufacturers don’t sell at the gate anyway, so there is no choice. Dealers will often quote ‘on-the-road’ prices and they will include everything - delivery, registration, preparation and road tax.
For a car that starts at, say, 15000 pounds, that can easily add another 500.
Yes, the delivery fee should vary based on how much delivery costs. In addition to other advantages mentioned, it also gives entrepreneurs who might not have enough money to start up their own dealership a chance to engage in a little arbitrage. Find out that the local dealership is charging $500 in delivery fees, figure out where their cars get shipped from, find a way to do it for less, sign a contract with the dealership where the dealership will pay you $470 each to ship them, then go pick up the cars! Wanna make money? Get the cars there on-time, undamaged, without spending more than $470 each! Whatever’s left is your profit! Congrats! Get stuck in Memphis when one of your delivery drivers gets arrested for DUI? Bummer, man! You’re a business owner! You going to deliver late, and attract the ire of the dealership and a potential non-renewal, or are you going to suck it up, pay another company to pick the rest of the cars up and finish the journey, paying a premium emergency last-minute rate to do so, and count your loss as goodwill toward your customer and a hope for a new order next month (which you’ll be ready for, since your new uber background check should help get you better drivers…)?
Any non-negotiable price or flat rate (shipping) to all dealers pricing should already be in the sticker price of the car. There is no reason to hold that price off to the side other than to try to confuse the buyer. It’s a bullshit move and one of the many reasons most people hate the car buying process.
I’ve had good luck giving dealers a somewhat low-ball “out the door” offer. The out the door is just what it says, my total cost out the door. It includes everything and anything the dealer wants/needs to put on the buyer’s order, including delivery, documentation, tax, title, tags. That way there is no haggling over the details, it short-circuits much of the haggling and upselling games a dealer plays.
If you’ve done that much homework and know the dealer will take ____ over cost on that model, they will take the ____ and call it a sale. Most people don’t go in anywhere nearly that prepared, and far, far too many people “just wander in to take a look.”
At which they pay $_________________________________ over cost.
All destination charges are clearly printed on the window sticker, by (AFAIK) federal law. That’s not the issue here. The issue is that these substantial costs are kept out of the sticker, advertised and negotiated price until the end, unless the buyer is savvy. They are wrassled and bitch-slapped around over a price that turns out to have $500-1000 in additional fixed costs, before even sales tax and registration fees.
(There’s also the issues of “distributed cost” which are to the buyer’s detriment, but let’s keep it simple.)
My point is they already are in the price of the car. When you look at the lower right corner of a Monrony sticker that number includes the destination charge.