DOC FEES

[Billy James]

I always work my buys from a OTD (out the door) number. This way they can't change numbers....or they can, but I'm locked into my OTD number and I don't care how they work "their" number. It's worked well for me over the years!!

I usually have all my numbers in mind as an OTD door price before I even set foot in a dealership. I determine, on average how much others are getting off MSRP (from forums, web sites, etc); then add around 5 percent more off MSRP as a target. Being in Florida, everyone adds anywhere from $599 to $999 dealer fees that they will not negotiate; so I just add that number to my target "off MSRP" price as a means of determining what I consider to be the total price. And, of course, they get pissed when they see my numbers and I added their dealer fee to the price of the car rather than seeing it as "cost of doing business". I figure taxes, what I'm willing to accept for my trade, etc.. Usually they come back with an inflated number hoping I'll bite. When I bought my RAM in September 2018; it was a long hard fought battle in the dealership (about 6 hours from the start) as they went back and forth to the "sales manager" changing numbers one hundred here and one hundred there. I walked out once when they stopped adjusting price and/or my trade and three people chased me to my car asking me to come back in. In the end; they adjusted the numbers to a point where we were both happy. I got 22% off MSRP, and got $200 less than I wanted for my trade; but most importantly the numbers were pretty much what I had predetermined before I walked in the door. I probably didn't get the best deal ever, but I got the truck I wanted for the price I was willing to pay. I don't have a problem with the dealership making a little money off our transaction, but I don't let them swindle me into paying more that I predetermined that I would.
I just bought my wife a new Mazda last week. I drove it two weeks prior and told the salesman we weren't ready and that I was going to shop the competition first. We did shop the competition, but really decided on the Mazda from the start. I called the salesman last week and told him we wanted a second look ( I did my "normal" numbers preparation prior). I had my wife take the trade in for evaluation while I was at work; which worked well because they knew they couldn't close the deal without me there. While my wife was there, the salesman emailed me the numbers. I called him back and told him I already did my numbers and that he needed to be $2000 lower than what he sent me. He asked if I would close the deal before the last day of the month. I sent him my numbers (this was on January 26th) and told him if he matches the numbers I would be there to purchase the car that night. He sent me back another set of numbers and subtracted an additional $2000 off the MSRP; which put me $52.55 below my numbers. I bought the car that night with no further negotiation and only spent 45 minutes in the dealership.
Some will maybe punch holes in my process. Did I pay more than I could have? Maybe. Did I get washed on my trades? Not really because I always test the market with a private sale and "cash offer" companies first. One thing for sure, I didn't pay top dollar on either vehicle because I did my homework and determined the numbers before I shopped. I haven't always done this with cars and have let my emotions sway me into a purchase before; leading to that sinking feeling of remorse the next day. My RAM negation was brutal and stressful, but we got there. My Mazda negotiation was, in my opinion, perfect. In both cases, my predetermined numbers kept me "level headed" and prevented me from falling for the shell game that dealers play. I know that they made some money off of me because they aren't there to lose money; but in the end the numbers came out where I thought they should be and where I needed them to be.
I might have strayed from the original point here: Doc Fees. I don't let Doc Fees be added on at the end as something that drives up the total transaction cost (in my numbers). For me, I add the Doc Fee to my adjusted MSRP and that is my price negotiation point. If necessary, I subtract more from my desired MSRP to make the numbers fit what I would be willing to pay as if a Doc Fee never existed.