Is a "processing fee" legitimate or a rip-off?
Registered User
Joined: May 2003
Posts: 438
Likes: 1
From: Raleigh NC
I don't think that I would have a problem paying a few extra fee's if dealships were honest and straightforward. Almost every experiance has been a hassle, and I expect to try and get screwed. Is this a harsh generalization? you bet, but just how far off the truth is it really......
Registered User
Joined: Apr 2001
Posts: 100
Likes: 0
From: Westminster
FYI:
Just to reiterate:
Holdback is 2-3% of MSRP prior to Destination Charge (hmmm no-one has complained about that yet. Why not... oh yeah it is a manufacturers fee)
At my dealership we get paid comission on holdback on some models, not all. In addition, we don't get paid commision on our $99 dealer processing charge. So if we discount the car another $99 that is less we get paid comission on. Also consider this. Until July 1st Maryland let us charge $25 for dealerprocessing. It was not taxed. Once they let dealers charge up to $100 they started taxing it. So not only does Maryland make a 5% of every vehicle sold it makes and extra $5 off of dealer processing. No one has complained about their state making a buttload of money off of vehicle sales. In Maryland, if you sell your car on your own you have to pay sales tax, if you trade it you don't. Also, A bank makes money on you when you finance, why not just take care of it all at once at the dealership. They are probably using the same banks you are, or they can at least match your banks rate.
Just my $.02
Just to reiterate:
Holdback is 2-3% of MSRP prior to Destination Charge (hmmm no-one has complained about that yet. Why not... oh yeah it is a manufacturers fee)
At my dealership we get paid comission on holdback on some models, not all. In addition, we don't get paid commision on our $99 dealer processing charge. So if we discount the car another $99 that is less we get paid comission on. Also consider this. Until July 1st Maryland let us charge $25 for dealerprocessing. It was not taxed. Once they let dealers charge up to $100 they started taxing it. So not only does Maryland make a 5% of every vehicle sold it makes and extra $5 off of dealer processing. No one has complained about their state making a buttload of money off of vehicle sales. In Maryland, if you sell your car on your own you have to pay sales tax, if you trade it you don't. Also, A bank makes money on you when you finance, why not just take care of it all at once at the dealership. They are probably using the same banks you are, or they can at least match your banks rate.
Just my $.02
Registered User
Joined: Nov 2002
Posts: 107
Likes: 0
From: Milford
I asked a friend who was the owner of the dealership 30 years ago when I was buying a new car what this processing fee was? I never before ever saw that charge in previous car purchases and he told me ADDITIONAL DEALER PROFIT, PERIOD. The same could be said for shop supplies etc. in the service dept. In any business there are costs to do business, rent, electric payroll. The dealer is in business to make money, he is entitled to make money. Hold back is a specific number as is the difference of invoice vrs, MSRP. Floorplan is dependent on the financing the dealer pays to keep an unsold car on the lot, so the longer a car is on the lot the more a dealer who is selling that car has to charge to make money. There are other legitamate charges, sales tax, title and reg fees, some dealers are hooked up directly with DMV not all, most make money by doing this service.