DRIVERS have been warned to check for two vital words on their car dealership receipt.
Those missing them risk being hit with an “excessive” $300 charge.
It’s a case of buyer beware out there! Experts have shared advice on how to avoid being trapped by outrageous fees (stock image)[/caption]
The advertised price often isn’t what car buyers end up paying the dealer[/caption]
Car buyers usually find venturing into dealerships a daunting experience, according to CoPilot research published via AOL.
They can be left confused or under pressure to buy a vehicle they never expressed an interest in – or feel forced into paying too much extra money for the one they were keen on.
CoPilot explained that buyers are often “met with an arsenal of psychological and emotional manipulation tactics.”
These have “the express purpose of driving up the final purchase price without your full knowledge, understanding, or consent.”
It means that buyers have to be extra-cautious about being hit with additional fees.
CoPilot has supplied many examples of extra hidden costs and excessive fees – including two simple words buyers should ask about/look out for: license fee.
Its analysts found that buyers are paying a whopping extra $300 for license fees.
That’s the average amount by which license fees “exceeded the state limit in the used car purchases analyzed by CoPilot.”
However, it’s a case of buyer beware, as the amount in license fees that dealers are allowed to actually charge is” capped by the state and should not exceed a certain amount,” the experts added.
Their research found that the most excessive fees charged by dealers were for: license fees ($292.64); plate fees ($275.99); transportation fees ($212.33); title fees ($205.92) and doc fees ($204.32).
ADD-ONS
CoPilot crunched the numbers for used car transactions across the US after quizzing purchasers.
Shockingly, it found that, on average, $640 of hidden fees were added to used vehicle purchases.
This was from “excessive and illegitimate fees.”
For example, including charges for added features that were pre-installed on the vehicle.
Or, there could be extra features the dealer has slyly added to the car during the purchase process – but without checking the additions were acceptable to the buyer.
SPIRALLING FEES
In such instances, there was neither knowledge nor consent for these add-ons or extra services.
The most expensive illegitimate fees – according to CoPilot’s research – were for: etching, wheels and lock ($1,795); reconditioning ($1,581.83); exterior paint protection ($1,366.17); anti-theft/lo-jack ($1,227.25); and protective door edge ($1,067.71).
Dealership Tips
Here are some expert tips when purchasing a car from a dealership lot:
- 1. Set your price: Ensure you’ve calculated your monthly budget before going to the lot. You should include the car’s loan payment, insurance costs, fuel, and regular maintenance.
- 2. Research: Make sure you know which cars you’re interested in test driving before you reach the dealership.
- 3. Pre-approval: Secure financing before you go to the dealership. Dealerships may give you a better interest rate if they are competing with an outside bank.
- 4. Test away: Get behind the wheel before making any payments. A car purchase will be worth thousands of dollars – drivers should ensure they like the drivetrain, steering feel, and comfort of the car before taking it off the lot
- 5. Haggle: Drivers should always try to negotiate the price. There are so many good cars on the American market – buyers have a strong hand when negotiating price.
Source: Kelley Blue Book
Meanwhile, the most common illegitimate fees were for: exterior paint protection ($1,238.23); reconditioning ($1,366.17); dealer accessories ($1,581.83); warranty ($1,593.97) and anti-theft ($1,227.25).
CoPilot found that when it comes to foreign branded used vehicles, there was an average $851.07 of hidden fees added to the purchase price.
These are defined as “excessive or illegitimate charges that are added onto the final purchase price of a used car, without being clearly communicated to the customer.”
BAIT-AND-SWITCH
It’s the costly result of a dodgy strategy dubbed “bait-and-switch pricing” — experienced by 71% of used car buyers, who pay an extra $11.8 billion annually in the U.S. as a result of this type of swindle.
Buyers spot a low advertised price – the “bait” for a vehicle.
So they go to the dealership, which tricks them into shelling out much more money as the cost is “switched” to a higher out-the-door purchase price.
Bait-and-switch pricing is a tactic used to hide total prices and mislead people about fees.
If you’re negotiating with a dealer who is fair and transparent, there shouldn’t be any nasty surprise in the amount paid.
Firstly, the full price should be in the advertisement.
And when you get the final bill, there shouldn’t be any sneaky and unexpected add-ons hiking up the amount.
PROFITS
CoPilot found that greedy car dealers were keen to hang on to the huge profits they enjoyed during the Covid pandemic.
It said, “Dealers, who became accustomed to record profits during the Covid years, are unwilling to give those up.”
Unfortunately, the law isn’t on the consumer’s side, after the overturning of the Federal Trade Commission’s Combatting Auto Retail Scams Rule in 2024.
This rule stated that dealers had to be transparent about pricing and fees.
ADVICE
It means that car buyers have to protect themselves from money-hungry dealers.
For example, CoPilot recommends:
- Contact the dealer in advance and get the out-the-door price in writing
- Identify any fees that look higher than average or seem unnecessary
- Research average fees for your state
