Crazy Fees and Crazy Terms Defined!
Money Money Money (a weird song by ABBA, but an aphorism for purposes of this blog post). How do you go from spending money MONEY (x3) to money (x1)? Good old fashioned financing know how is always a good start. Car financing and fees can be tricky, so let’s define some important financing terms and lesser known fees and get you in the ol’ know when a shoppin’ you go. Keep these terms in your back pocket the next time you go to a dealership, and you’ll be ahead of the game when it comes to financing.
Monroney Sticker Price – Did you know the sticker price tag on all those new cars at the car dealer are required, and can only be removed by the consumer? And that Almer Stillwell “Mike” Monroney, the old rogue senator from Oklahoma, was responsible for it? (Ummm…I have no idea how one goes from Almer Stillwell to “Mike”.) If the sticker is removed by the dealer, they can face…A YEAR IN JAIL! Plus a fine of $10,000! Trivia info aside, this dollar amount should be the starting point of your negotiation, never what you actually pay.
Destination Charge – This fee is levied on all new cars for the transportation from the manufacturer to the dealer. While legitimate, inquire with your dealer about the specific amount to check if you’re being taken for a ride (get it? Yeehaw!) and avoid being overcharged. Just because it’s legit doesn’t mean it’s accurate. Do a little due-diligence and verify with other dealers or online pricing sites.
Dealer Financing – Oh man, do we love convenience. A car…and a bank!?!?!?!? Yes, some dealerships also offer loans to their customers. But be wary. If it’s convenient, it also may be ’s also probably a little more expensive. Convenience can be costly, as it’s just oh so easy to buy the car and finance it in the same place. Shop around for interest rates like you’re shopping around for a new car, because chances are you’ll you may find a lower rate and better terms elsewhere.
Rebates – These are manufacturer price reductions, used as a nice little incentive device for the dealer and usually paid directly to the dealer. But, like one of the themes of this post, ask, ask, ask about the specifics of that rebate. Has it been factored in to your final quote? Or is the dealer hiding that rebate so they can pocket that money for themselves?
All you have to do is ask as a car buyer.As a car buyer, often all you have to do is ask. Well…that and some research so you don’t sound ignorant or ill-informed. (Though big words can sometimes work as a good substitute, like “aphorism” for example )Knowledge, as they say, is power.
Now But now that you’re privy to these terms and fees, ask away.