Look for hidden dealer fees when buying a car

Originally published at: http://boingboing.net/2017/03/14/look-for-hidden-dealer-fees-wh.html

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The auto dealer industry is a diseased parasitic infestation. Imagine if your local big box store charged you a “dealers fee” to buy a TV. Auto dealers are a racket which has lobbied for laws that benefit them at the expense of both the manufacturers and the customer to force you and the maker, for no good reason whatsoever, to exchange goods through them. Because they provide nothing of real value, they can only make money by jacking up the price for no reason. They’re an unnecessary part of the supply chain, thugs who have muscled into the transaction to bilk the buyer and the maker.

Car salesmen are paid next to nothing because of similar laws to those governing pay for waiters. Except unlike waiters, they don’t help you, they help the dealership franchise. They’re paid on commission for separating you from more of your money than the vehicle is worth. Car salesmen are confidence men, con artists, walking talking sleazeballs who’s “job” is to take advantage of people, most often when they need a vehicle and are paying for a rental or ride-shares or public transportation because their last and only vehicle has died on them.

I have no more sympathy for someone who makes a living as a car salesman than I do for a mob enforcer who rings protection money out of neighborhood businesses. As far as I’m concerned, the lot of 'em should be third against the wall when the revolution comes after the politicians and the bank CEOs.


Apparently, “VSA” stands for “Vehicle Service Agreement.” It’s a euphemism for the extended warranty covering repairs that extends coverage beyond the factory warranty, but it takes some digging for a non-expert like myself to figure out what it is. I guess it makes sense if you’re planning to drive the vehicle into the ground and don’t mind the built-in dealer markup on repairs, but it should be explained to the buyer and presented as an option instead of a requirement.

“Maintenance” covers scheduled maintenance (oil changes, brake pads, airfilters, etc.) that will be performed by the dealer. There are so many cheaper non-dealer and DIY options out there, it doesn’t seem worth the price unless you’re totally clueless about cars and are planning to drive the car forever.

The “Perma Plate” is a coating right out of the Fargo video @knoxblox posted above.

This article provides yet more reasons I’m glad I don’t have to own a car.


A friend who’s a litigator told me that these salesmen are moving every few years between selling cars and mortgages and credit card merchant accounts. When the economy shifts to favour a new dodgy business, so do they.


Warranties for cars are rarely worth buying. But if you’re going to get one, never buy it from the dealer. They’re not an insurance company, they’re a walking talking conflict of interest.

If you must have a warranty on a vehicle, buy it through a credit union. That’s the closest you’ll get to someone with your best interests in mind when shopping for auto warranties. Even then, it’s rarely necessary. It’s the same principle as health insurance: healthy car buyers pay for used car buyers - unless it’s through a dealership in which case both pay for the dealership to bend them over a barrel - but new cars will have lower maintenance costs than the warranty and most of it (oil changes, tires, ect…) won’t be covered under the warranty, while used cars are almost never worth it.

The only used cars worth the price of a warranty might be a vintage vehicle of rare or sentimental value, but typically owners of those either do their own maintenance or know mechanics who are qualified to work on their specific type of vehicle, whereas a shop that might honor the warranty is as likely to damage a vintage vehicle trying to fix it simply because it probably has special requirements or has been modified to keep it running.


I didn’t realize just how nasty things were until I watched this the other day.

I’d heard of services whereby one can hire someone to endure the frustrations of buying a car for you. (Presumably the task of finding and hiring such people is marginally less arduous.)


They mention the GAP insurance like it’s some bad thing, but it’s insurance, just like any other insurance. If you don’t file a claim, then sure, it’s a waste of money, but if you need it, then it’s worth every penny and then some. I have a friend who bought a new car a couple years ago (some kind of Ford) and a young inexperienced driver t-boned her two weeks later. The new car was totaled, but she had no gap insurance and the insurance payout gave her only enough money to turn around and buy a 4 year old higher mileage similar car. Depreciation when you drive it off the lot kills you in that specific situation.

Pardon me if I lack sympathy for any expenses connected with a $75,000 luxury sports car.

Of course a car dealer is going to try to soak someone buying something like that as it’s obvious the buyer has more money than brains. Anyone selling luxury products does this I suspect. Think of it as a non-governmental method of helping you share your wealth with the less fortunate.

I’m not normally mistaken for a flaming liberal but I just don’t get worked up over the problems of buying toys that cost more than many people’s home.

The fact that the writer doesn’t even know what “PermaPlate” is and thought it was part of the license plates pretty much says it all.

Those “fees” are not hidden if they are right out in the open on the contract you haven’t even signed. Most such things are easily negotiable. Doesn’t even take high level skills: 'What is this? it comes off the cost or I’m not buying." solves a massive number of these issues. You need not even be polite about it. Draw a line through it and tell them to recalculate.

I don’t know about you but I’m not paying them to file the paperwork they have to file to complete the sale and register the car. If they won’t come around, there’s always another dealer who will but not a lot of people will let a couple of thousand in commission money walkaway over $80.

Taxes and license fee yes (well maybe, everything can be negotiated), but not their overhead for part of the sale itself.


Several of those fees are for potentially valuable services. The problem is that they were added on without being requested, and the are usually a rip-off to buy them from the dealer. Even if you want gap insurance (for example), the dealer should explain what it is, why you might want it, and it should be clearly listed as an optional add-on, rather than lumped in to the sale price without you asking for it.

I frequently buy expensive equipment at work, and a lot of it has high priced options available. If I ask for a quote for XYZ, I get a quote for that. Any additional options the vendor wants to price out for me are clearly marked as optional add-ons, and come with at least a brief description on the quote of what they are.

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That’s fine, but dealers do the same thing to people buying a Ford Focus, often an even larger percentage of the base price. The people buying cheap cars can less afford to have a professional buyer uncover those rip-off fees and negotiate the deal for them.


The first and only time I ever bought a new vehicle from a dealership was my 1994 Toyota Hilux pickup. Since I bought it in October of 1994, the brand-new-for-1995 Tacomas were arriving the very next week, so the dealership was clearing out all the '94s by pricing them at $7,500 for the rock-bottom base model. No A/C, no radio, no rear bumper, 4 cylinder engine, 5-speed manual transmission. I paid $150 extra for metallic blue paint. The dealership tried to upsell me on a few things including financing, even trying to get me to finance some air conditioning, but no dice: I paid cash.

And I had two other advantages: I am not clueless about cars (performed all my own maintenance and what little repair it required, up to and including a new clutch at 180,000 miles), and I did intend to drive it into the ground. I eventually gave it to my niece. Last time she checked it was still boogieing along up in Alaska with 300,000 miles on it. Best $7,650 I ever spent (plus tax, license, and doc fees, which I believe added up to less than an additional grand, IIRC).

I’m sure I’ll never see another screaming deal that awesome again.


Plus you bought a Hilux. Those things are near-indestructible, as any Somali warlord will tell you.


I didn’t know it at the time, but I sure found out! That same month my sister-in-law bought a new Ford Ranger. Vinyl upholstery instead of cloth, no carpeting, and cost $4k more. Needed tires within six months (my Toyota’s original tires lasted a mind-boggling 80,000 miles) and started falling apart a couple years later. Man, I lucked out.


I don’t pardon you, for the following reasons:

  1. With this sentence, you signal that you have turned off your brain, which means the rest of your post is worthless.
  2. When you decide to sneer and turn off your brain about something at X cost, you in turn excuse it at any other price point. You ignore it, you condone it. You condone it, and you are part of the problem.


They don’t need to be “uncovered”, they are right there in black and white.

A basic rule of economic survival is “The less money you can afford to lose in making mistakes, the smarter and tougher you better be about things.”

Short of reports that people are being forced at gunpoint to buy cars this way, the buyer always has control. Heck, I don’t even own a car (I’m legally blind), saves endless hassles of this sort apparently and one heck of a lot of money over time.

(And no, I was not born rich, my father was a mid-level NCO in the Marine Corps . (As an adult, I had times when I had to do comparison shopping on the cost of cheap bologna to afford that night’s dinner. But I decided I didn’t like that sort of life and made things a lot better in time and one way was by being smart about how I spent my money.)

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Not sure why you think I am part of the problem. Whatever problem you feel this whole things encompasses.

I merely said I lack sympathy when people buying expensive, totally unnecessary luxury items like $75,000 sports cars complain their toys are expensive.

I find such whining to be on a par with complaining one’s $50 cigar was nit properly humidified. There’s people out there who can’t afford a toy Corvette, let alone the real thing.

There’s not a single line item in that list that cannot be negotiated right back out of it. Almost all of them as easily as I suggested: Cross it off and tell them to recalculate. All the add-ons like “undercoating” and such are options anyway to see if the buyer really is a sucker.

Car dealers aren’t operated as a charity and someone buying a car at that level has money to burn or they’d not even be considering it so high-balling is going to happen. The smart buyer knows how to deal and the dumb ones who can afford cars of that sort need to learn fast or not get worked up over it.

(I neither sell nor buy cars so I have no stake in this. I just dislike people who seem to think the rest of the world is somehow obligated to be their parent and keep them from doing foolish things with their money.)

The bottom line is. “If it costs you more than you want to pay, don’t pay it.” Not having a Corvette will not shorten your life or cause you a painful disease. (Any “you”, I don’t mean you specifically.)

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“Right there in black and white” is no good if it’s a dodgy euphemistic term that you’re encountering for the first time and if the salesman is likely to lie about what it is and if it’s required if questioned about it. The technical term for the problem is “information asymmetry,” and the car sales industry is often used as a textbook example of a high-pressure sales case.

This isn’t about buyers being forced to buy cars (luxury or otherwise), it’s about sleazy practises in the car sales industry. It’s exactly the kind of useful research information that people need if they want to be an ultra-smart consumer and pull themselves up by their bootstraps to become a Galt-like tycoon.


Please, though, tell us what you really think. :wink:

(I’ve had so very little to do with them, but tend to agree with you.)

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