D & H Charges Dealer Gouging or Fair Practice

[Bashed]

The other thread about the superbike multipication got me thinking about this subject.
D & H Charges, or Delivery and Handling charges are an extra fee imposed by dealerships to incure more profit. They are not required by law and are not the same from dealer to dealer. Some dealers charge D & H charges and a Freight charge as well. They say it is what the manufactor charges them to get it to the dealers place of business. This fee varies wildly from place to place, from zero fees to over $800 dollars at a local motorcycle dealership.
So my question to you is this.
Is it reasonable to have a D & H charge?
What is a reasonable amount if in fact it is reasonable at all?
Is it reasonable to charge freight along with D & H fees?
Keep in mind the retail pricing on all vehicles has a built in profit for the dealer already. Also some states have a capped dollar amount, Cali is $45 on leased deals and $55 on buy deals. Texas is also capped @ $50.
What exactly are you getting for these fee's, extra care in the handling of the transaction, or just the warm fuzzy feeling for giving them your money for nothing in return?
Don't confuse this charge with any taxes that are due. That is a completely different issue.
These fee's are really just a way to increase a dealers profits IMO.
I feel it says if I am buying a vehicle and I agree to pay the fee's, that I am a sucker for the privelage for them to sell me that vehicle. In these times where money is tighter and purchases must be scrutineered, I think we as consumers should stand up and make a stand. I will activly seek out a dealer who would rather sell me a vehicle for a less profit rather than get greedy and stick me with these BS charges and fees.
Your thoughts?

[vort3xr6]

If we sell a brand new Toyota Tacoma at sticker price, the dealership makes $260. Couple that with dealers and competitors selling cars below invoice and D&H is the only thing that keeps our lights on. Consider it our markup from the manufacturer because they have shrunk margins exponentially.

I can't speak about motorcycles though. This is cars.

[vort3xr6]

We have never once not charged D&H either. When I buy a car, I have to pay it and I work for the company. The running joke in the company is that Jesus would have to pay D&H. That is where colorado law states we cannot discriminate D&H by charging somebody but not somebody else.

It is even worse for Chevrolet! A brand new Chevrolet Cruze only has $180 of profit. Not sure where you are getting your ideas of profit.

[longrider]

Also you can negotiate a bottom line price. Just be aware that as Brad stated if you charge a fee you must charge teh same fee to all customers. If you negotiate a bottom line of $8000 and there is a $100 fee then the sales agreement will be written up for $7900 plus a $100 fee

[BC14]

^ Yep, I always work on the Out The Door price, and do some numbers work to get it where I want to pay.

[salsashark]

Like BC... I figure out what I want to pay and let the dealership play with the numbers to make it work. If it does, great... If not, no worries. I'm not too concerned with a specific charge as long as the OTD is what I'm comfortable with.

That being said, it feels shady to advertise a car/bike at one price, then throw in these types of charges to bump up the final price. I was looking at F-150s a few weeks ago and every "invoice" I saw had all kinds of these additional charges. It pissed me off. I don't want the freakin undercoating! When I questioned them, the salesman instantly said they could be pulled off. It felt like a "Let's throw it in and see if he catches it" or "we'll add this to make it look good when we offer to take it off" kind of thing. It all felt somewhat underhanded... especially on a $46K truck!

[BC14]

Just like the "paint sealant", "carpet protectant", and a myriad of other things they love to tack on.

[dirkterrell]

Yep, when I'm negotiating I tell them that I don't care at all what the details are. Just tell me what I have to write on the check to take it home, and you figure out how it's divvied up. And I tell them that if they give me a number and then come back later and add other charges, I'll walk out the door, and I have. Just cut through the bullshit right from the start and things work out much better for everyone.

[TinkerinWstuff]

capitalist bastards! how dare someone make a profit and buy shoes for their kid or groceries for the table

[TinkerinWstuff]

Why else do you think a 2012 nice loaded vehicle costs almost $40k?

because manufacturers have got efficient at making lots of incredibly accurate and difficult parts efficiently? Any other machine of similar complexity and workmanship doing any other task besides shuttle fat ass socker mom's and their sugar fed children to McDonald's would cost a half million dollars or more.

[Darth Do'Urden]

If we sell a brand new Toyota Tacoma at sticker price, the dealership makes $260.

This is of course AFTER the owner gets his "pack", the GM gets his cut, the New Car Sales Manager gets his cut, and the salesman gets his "mini".

Couple that with dealers and competitors selling cars below invoice and D&H is the only thing that keeps our lights on.

Is your New Car dealership connected to or working in conjunction with a Used Car lot? If so, THAT is what's keeping your lights on, not some D&H fee that is indeed a crock of shit.

Consider it our markup from the manufacturer because they have shrunk margins exponentially.

Not the consumer's problem.

Not sure where you are getting your ideas of profit.

I have a very strong sneaking suspicion of where you're getting yours...and it's likely just as off-base (through no fault of your own...unless you actually run the whole place) as the general consumer's.

There's indeed much less markup on Toyota and Honda than domestic cars, but it's also quite true that the higher up the price bracket you go, the more built-in profit there is as well.

And just to clarify, I'm not accusing you vort3xr6 of anything. I reckon you're a salesman trying to be a very GOOD salesman with as much honor and integrity as possible. But those numbers you quoted, even if shown to you by a sales manager on some official "invoice", are simply untrue. There's "invoice", and then there's invoice. And not very many people are privy to the actual truth of which one's which.

[McVaaahhh]

If the dealership only made $100-$200 per car they couldn't afford to stay in business. There are many other ways they make money with financing, holdbacks, bonuses, etc.

The only thing that matters is if you "feel" like you got a good deal on your bike/car. The dealer is there to make money, that's his job, not to give you a good deal. Haggle with them until you're both happy and just go with it. It's not charity, it's business.

[salsashark]

^^ IIRC from college econ and marketing classes, dealerships profits primarily come from the back of the house, not the front. They're making the bulk of their money servicing vehicles and selling parts/accessories.

[Ghost]

Fwiw, D&H is illegal in several states, but not here.

It's a gouge, but so it goes--negotiate the OTD price and let the dealership back it out, it's all a numbers game. If you play it long enough you'll find someone willing to eat it.

[TinkerinWstuff]

I think it is hilarious that everyone of you believes he deserves another dollar an hour in his paycheck but the minute somebody wants a dollar out of your pocket he's a thief.

[vort3xr6]

I think it is hilarious that everyone of you believes he deserves another dollar an hour in his paycheck but the minute somebody wants a dollar out of your pocket he's a thief.

Amen.

I work in the corporate side of the dealership group so yeah I see our numbers. In our organization between our two Toyota stores, the average profit of ALL new cars is $825. That INCLUDES pack and D&H. With the higher end brands that is much larger. No wiggle room in Porsche and we make $8,000 a pop. Why? Because if you don't buy it, the next rich schmuck will.

I love how everyone thinks they know how "invoice" pricing works. I can show you exactly what Toyota takes out of our bank account for the car and you would still ask for $2000 off that. There is NO margin in new cars. We sell them to get more trade ins and increase our allocation. It is a volume commodity, not a gross profit generator.

Used cars is another story. We average $3500 per unit on used cars. Don't blame the dealer for that, blame the low supply high demand used car market. We sell them that high because the market dictates that is what they are worth.

Every price we put out on the internet or in paper, we say that D&H is INCLUDED, so it's not like we are hiding anything. Once again, we can show you all the paper in the world but you "the consumer" is going to believe whatever you want. Self fulfilling prophecy.

[McVaaahhh]

^^ IIRC from college econ and marketing classes, dealerships profits primarily come from the back of the house, not the front. They're making the bulk of their money servicing vehicles and selling parts/accessories.

Agreed, but do you really believe that $46,000 truck only has $100 profit in its sale? Don't salesmen get commissions? Where does that money come from? Parts & Service? I doubt it...

I may be wrong, but I don't think they operate the same as cell companies (Read: sell the phone at a loss but make it up in plan charges)

I do know they make more money on used vehicles. (That's why they're out front)

[salsashark]

I think it is hilarious that everyone of you believes he deserves another dollar an hour in his paycheck but the minute somebody wants a dollar out of your pocket he's a thief.

1st of all, I never called them thieves and I don't think they are. They're in sales. Some are better than others. Some are definitely worse. I challenge you to find someone who has never left a dealership feeling worked over.

To me, it's a game. They win if they get more money from me then the other guy who wants the same vehicle. I win if I get the vehicle for a price I'm happy with.

Like I mentioned in my previous post, I was looking at trucks a while back. The sales man offered to let me take one for a day and run errands with it. No way... I want no emotional attachment to something that's not mine. I knew what he was trying to do... and good for him. That's just another part of the game.

In the end, the math didn't work. He wanted to take more dollars out of my pocket then I was willing to let him.

[CaptGoodvibes]

I love how everyone thinks they know how "invoice" pricing works. I can show you exactly what Toyota takes out of our bank account for the car and you would still ask for $2000 off that. There is NO margin in new cars. We sell them to get more trade ins and increase our allocation. It is a volume commodity, not a gross profit generator.

What is the single best day of the year to buy a car?

[Ghost]

PVR is one aspect of the entire business model, there are also various corporate incentives, stair-step bonuses, marketing co-op funds, etc., etc.

[vort3xr6]

What is the single best day of the year to buy a car?

Tough question but I would say either the Friday before Thanksgiving, or December 31st.

Any time in the 4th quarter we usually start dropping grosses to move units for the next year's allocation.

[Ghosty]

I work in the corporate side of the dealership group so yeah I see our numbers. In our organization between our two Toyota stores, the average profit of ALL new cars is $825. That INCLUDES pack and D&H.

That's some good info to keep in mind, thanks.

because manufacturers have got efficient at making lots of incredibly accurate and difficult parts efficiently? Any other machine of similar complexity and workmanship doing any other task besides shuttle fat ass socker mom's and their sugar fed children to McDonald's would cost a half million dollars or more.

My age and George Constanza "cheapness" might be showing. When I was a kid you could buy a Condo for $40k, lol.

[Bashed]

I belive both the consumer and the seller will both tell lies to get the deal they want. I have heard salespeople outright lie to me about certain aspects of the deal when thru research I know it is BS. On the other hand I overheard a buyer talking to his wife about a aspect of the deal he was negotiating and then flipflop and tell the seller the exact oppisite.
I have also experianced dealerships who don't want to tell you the bottom line, until the time comes to sign the papers. To me this is a form of dishonesty, to not be upfront on all costs and try and hide the "out the door" price. Not giving info is as bad as telling false info. This is where I as a buyer makes the descision on weather or not to make the deal. If the person or people I am dealing with don't/won"t have the capacity to compromise the deal is off. No pricing/charges are set in stone, and if they are I will walk and take my money elsewhere. As others have said, I don't care how the # work, as long as the final outcome is amicable to me. I won't string the negotiations out till every last penny is squeazed out, but the sellers needs to meet somewhere in the middle to make it work. That is thier job and the game. It just bothers me that you have to do due digagence to not get screwed anymore, due to the greed in todays society. It didn't seem to be this bad even just 10 years ago.
I guess that is why I started this thread, to vent about the greed, thanks for listening.

[vort3xr6]

I belive both the consumer and the seller will both tell lies to get the deal they want. I have heard salespeople outright lie to me about certain aspects of the deal when thru research I know it is BS. On the other hand I overheard a buyer talking to his wife about a aspect of the deal he was negotiating and then flipflop and tell the seller the exact oppisite.
I have also experianced dealerships who don't want to tell you the bottom line, until the time comes to sign the papers. To me this is a form of dishonesty, to not be upfront on all costs and try and hide the "out the door" price. Not giving info is as bad as telling false info. This is where I as a buyer makes the descision on weather or not to make the deal. If the person or people I am dealing with don't/won"t have the capacity to compromise the deal is off. No pricing/charges are set in stone, and if they are I will walk and take my money elsewhere. As others have said, I don't care how the # work, as long as the final outcome is amicable to me. I won't string the negotiations out till every last penny is squeazed out, but the sellers needs to meet somewhere in the middle to make it work. That is thier job and the game. It just bothers me that you have to do due digagence to not get screwed anymore, due to the greed in todays society. It didn't seem to be this bad even just 10 years ago.
I guess that is why I started this thread, to vent about the greed, thanks for listening.

I admire where you are coming from, but 10 years ago was about 20 times worse than today. Car Dealers were SNAKES in the 80's and 90's. Back when the consumer didn't have information on the internet we were making 10k-12k PER car. Margins were high and the consumer had no idea.

We really have to work to make money in today's market.

For instance. 2 days ago this dumbass comes into our Toyota Dealership. He says he "knows" we have $10,000 in rebates and profit built into a brand new Sienna. He also says he "knows" Toyota gives us $5,000 in hold back. So he demands that we sell him a brand new Sienna for $15,000. The sad part is we get this ALL the time. Then the consumer goes online and BLASTS us for not being "up front" and lying to them.