Bottom Line: Hidden car fees and how to haggle for a better price
MEMPHIS, Tenn. (WMC) - Purchasing a new car is stressful enough from deciding which color and options you want to making sense of those mysterious fees that appear on the bill of sale.
A new Consumer Reports investigation reveals why one fee, in particular, is costing new car buyers more than ever before.
Do you pay an extra fee for those eggs you bought to get from the farmer to the grocery store? Of course not.
But you likely paid a similar fee the last time you bought a car!
It’s called a Destination fee.
“Also called “delivery, processing, and handling” or “inland freight and handling” fees,” said Mike Monticello, car expert at Consumer Reports.
“We know destination fees have something to do with getting a car from the factory or U.S. port to a car dealership, but there’s not a lot of transparency beyond that,” he said.
These non-negotiable fees appear as a line item on car window stickers.
They’re rarely disclosed in ads or on automaker websites. And because of that, these hefty fees can take unsuspecting buyers by surprise.
And there’s another even bigger problem.
Consumer Reports’ investigation, found that automakers have increased destination fees from an average of $840 in 2011 to $1,240 in 2020.
That’s almost a 50-percent increase and more than two and a half times the rate of inflation!
So what gives?
“The lack of transparency about how destination charges are derived, and the rate they’ve been increasing, deserves a second look,” said Monticello. Many consumer advocates suspect these fees are just a way for automakers to boost the bottom line without officially raising prices.”
So what can you do?
CR says to negotiate the bottom line for the vehicle, not the destination fees since the dealer won’t budge on those.
Insist on discussing your “out the door” all-in price, and don’t be shy about asking for a reduction.
If you don’t get it, consider walking away.
Car dealers expect you to haggle and they just might match your price to make the sale.
Consumer Reports says the best way to haggle for a car is over email.
Not only is it COVID-compliant, but it’s also a great way to get the deal “in-writing” before you even step foot in the dealership.
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