How To Buy A Car Part 2 - Who Has The Better Deal?

By Devin Almonte

How Has The Better Deal?

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Chart Analysis Breakdown

ACCESS CHART

MSRP:
Dealership #2 looks like the better deal.

Dealer Invoice:
The Invoice is also better with Dealership #2.

Bonus Cash/Rewards/Etc:
Dealership #1 is giving $5319.00 in bonus cash/rewards. Dealership #2 is giving $2500 in bonus cash/rewards. Now, that makes it “appear” that Dealership #1 has the better offer, as they are giving you twice as much bonus cash. Subtotal 2 also shows that they have the best offer at $30487.00, showing a savings of $1280.00.
 
Fees:
Now you can add in all your fees. Remember, fees should not be added to the price of your car (subtotal 1) or your financing! If the dealer tries to add this to the price of your car, then you will be paying taxes on these fees. You should not be paying taxes on these fees This also means that you would then be paying more interest each month as well. Not something you want to do!
 
Each dealership will vary to some degree when it comes to fees. This especially applies to Doc fees. Dealerships like to hide costs here depending on how the negotiation process goes. As you can see, Dealership #1 has much higher costs attached to their Doc fee and New Plate fee than Dealership #2. In some instances, they are trying to make up for some of the perceived losses from the large cash bonus incentives they are offering.
 
Notice some of the other line items-- Destination fee, Ad fee, and Prep Fee. What are these? Some dealerships will confidently tell you that these are necessary and all part of the process. They should already be included in the listed Dealership Invoice.
 
Taxes:
In most states, you are taxed on Subtotal 1. Dealerships would like to tell you otherwise.
 
Chart Recap:
In this scenario, Dealership #1 has a higher Dealership Invoice than Dealership #2. But Dealership #1 is offering double the amount in bonus cash incentives when compared to Dealership #2. That makes Dealership #1 look more appealing. “Over a $5000 cash bonus!”, they will say. After that, it makes it look like they are the better deal compared to Dealership #2, coming in $1200.00 under what you would pay with Dealership #2.
 
However, after carefully reviewing the fees, you see that Dealership #1 is trying to possibly make up for lost cash in their fees section. Many people wrongly assume these fees are set and not changeable, nor negotiable. Notice that Dealership #1 is charging you again for the Destination Fee and Ad Fees. You are already charged for this in the Dealership Invoice! There shouldn’t be a charge here. The Prep Fee – this is a junk fee and should be completely removed. They aren’t doing anything to “Prep” your car for you. Question the Registration fee. This is usually accounted for in the Doc Fee. And ask them for a breakdown of the Doc Fee and what is included in that, as they are charging quite a bit for it. New plates – this shouldn’t be much, but they may overcharge you for it. Find out what your state’s motor vehicle fees are so you know exactly what you should be charged for such items.

Dealerships know every trick in the book. After all, they do this for a living. They can only hide costs so many places. Often it will be in the invoice, a lower trade-in value, cash incentives, deals with the manufacturer, or in the doc fees. And then, if you choose to add on accessories, look out! They love to overcharge for accessories and installation!
 
Lastly, you can’t get the car for free and the dealerships do need to make a profit. They can’t meet you “at-cost”  on everything or else you will no longer have a dealership to do business with because they will be out of business!