Bad Credit Help
Car Buying Tips
Buying New Car
Buying Used Car
Service Contract
Financing Tips
Financing New Car
Credit Report
Bad Credit
Dealer Promotion
Tools
Car Loan Calculator
Lemon Check
What is VIN?
More Money Savings
Most dealers will try and get you to pay their documentation costs and add a fee called the "DOC fee" onto the final price. This fee covers nothing but the paperwork that the dealer goes through when you by a car and is deducted by the dealer on his income tax as "costs associated with doing business". An honest fully reputable dealer will waive the DOC fee charge. However, most dealers include it and it ranges from $20 up to around $65.
IN NO CASE SHOULD THE "DOC" FEE BE MORE THEN $75.
In some states, you are EXEMPT from paying the "DOC
fee" and you may have to check the laws in your state to be sure.
Now that you know the eight basic areas that the dealers
make their profits in, lets take a moment to examine a case where a totally
uninformed person goes into a dealer to purchase a new car.
Let's call our "Sucker" Mr. S.
Well Mr. S knows absolutely nothing about the
above eight items and he decides he likes the new 1991 Strobe Model J25
sitting in the show room all shiny and new.
The MSRP price on the Strobe is $15,845 (w/o dest. chrg.) and the dealer
cost is $13,941 (w/o dest. chrg and excluding holdback).
Mr. S buys the Strobe at full MSRP price.
Mr. S currently drives a 1986 model with a Blue Book Wholesale price of $3000 and a retail price of $4800. Mr. S is offered "$3850" for his "trade-in" (actually $3000 plus an $850 discount off of MSRP) and he accepts. Mr. S then decides to get the dealer add-on's and a "special" 3-year Extended Warranty! Mr. S accepts the dealer financing at 10.4% for 60-months and has the $50 DOC fee included too.
How much PROFIT did the dealer make off of Mr. S? How does a whopping *** $4,186.77 *** sound? You say you don't believe it?
*See example for the details of Mr. S's purchase.
Now do you see why it is so important that you know how the car buying game really works?
Bad Credit Help
Car Refinancing
Car Loan Application
