Recently, someone asked us about dealer admin fees. Please understand that these fees are quite variable. In fact, you can talk the dealer completely out of he fees if you are a good negotiator. In essence, these are just fees that are tacked on to the total cost of a vehicle. This is just a way for the dealership to make a little bit more money. If you want to save money on a vehicle purchase, negotiate a “walk out price” in which you see a price that you can walk out the door at.
If you want a Honda Civic at $17,500 you need to tell them you want to walk out the door at that price. If you don’t you will find you end up paying close to $19,000 with the fees, taxes, tag and title. They will also try to sell you on GAP insurance, wheel insurance, warranty packages and some type of oil change package. When all is said and done, you may look at a price that is around $20,000.
This is why it is so very effective to search around for the best Honda prices in your area. You can often negotiate a walking out price via email or over the telephone. If you give them your telephone number, they are going to call you all the time. We suggest doing all the business through email as you will then be able to make demands or simply walk away.
If you find your local Honda dealership is trying to charge you $649 admin fees you should quickly talk them out of this. Not only are you going to have to pay these fees, but they will add it to the financing at whatever interest rate you are being charged. If you have bad credit and are being charged a 10% interest rate, you will pay the 10% on that $649 as well unless you pay it the day you buy the car.
What admin processing fees have you seen when shopping for a new or used Honda? Should you buy a car on Craigslist or from a private owner to completely avoid these admin fees?