GR8-LIFE

I am not 100% certain of the validity to this but a couple of sales managers have conveyed the exact same answer on these fees.

INSPECTION/Prep fee

For years, this has always been known to be a dealer add on fee.

DAG Fee

This stands for Dealer Advertising Group Fee and its a new one on me. Its suppose to be 1/2% of MSRP. I dont recall seeing a DAG fee on my 2011 S4. I definitely would have questioned it on the buyers order (no way could one possibly miss an acronym like DAG)

I have seen 2 invoices from Volkswagen Group of america shipped to 2 AUDI dealers in 2012 and both of these fees were on the invoice.

Usually, the Manufcature's order guide shows all manufcaturer fees, including destination, so this is news to me. I was also told that a DAG fee might not appear on a dealer Invoice if the dealer is in a very obscure geographic area but in most cases, there will be a DAG fee passed on (even if its buried) to the buyer

So are these legitimate manufacturer fees passed on to the dealer who then passes them on to us (like destination fee) or is this a tactic the manufacturer and dealer have agreed on in making consumers think they arent Dealer add ons?

derfA8L

The ad fee is legit, and is charged back to the dealer by AoA. I'm no lawyer, but it is my understanding that if it were a tactic to charge a bogus cost on to the consumer, both AoA and the dealer(s) could be criminally liable.

And yes, I was charged the same 0.5% of MSRP fee when I took delivery of my car back in March 2011.

GR8-LIFE

I kind of though it was legite if it was on the Invoice to the dealer. But I am going to look at my S4's Buyers order in Dec 2010. Its possible they could have buried it but Why risk that kind of deception when you dont have to? It wouldnt make any sense for a dealer to hide such a fee. You got me very curious now. If I missed the word DAG or any other fee I am not accustomed to seeing on the order, then I am really slipping

derfA8L

Audi may have instituted the fee after you got your car. They re-launched their ad/branding programs and upped their ad spending beginning late 2010/early 2011, so the fee could be a relatively new development.

GR8-LIFE

They had to have done that because I looked and my S4 order has no such fee. Thing is the AUDI dealer I have been dealing with has told me its been out for quite some time (whatever that means)

Swancoat

It seems insane to me that the consumer would have to pay for the advertising. It's like putting bullets in the gun they use to shoot you.

The car purchasing decision becomes more frustrating to me every day. One thing I'm getting convinced of is that the profit on a car is moving away from MSRP-Invoice for the dealer, and into a bunch of hidden fees.


Several years ago, when edmunds, etc.. first started publishing invoice pricing it felt very priviliged like a negotiating advantage and represented a significant discount for the car. This was the wall you could push the dealer to.

However, it seems to me (and this is purely anecdotal, I don't have the historic data to back it) that Invoice and MSRP are creeping closer and closer together. Furthermore, the last few cars I've bought, the dealer's first offer is something like "Invoice + 500. How does that sound". It sounds too easy is how it sounds. I bought my A6 at invoice. Do I believe the dealer made no money? Hell no.

Unfortunately, their real profit centers are hidden, and with these published 'invoice' prices your negotiating power is limited. He claims he's making 'nothing' on the car - practically giving it away.

Anyway, I'm not sure what the answer for the consumer is, other than saying, "I don't care what the invoice says. This is what I'm willing to pay."

Anway, sorry for the rant.

jakematic

That is the best methodology.

The fees are getting out of control across the board.
Especially when you agree on a price and end up paying something different.

My favorite is the antiquated line "We have to pay the girls in the back office, so that's what that $295 covers"
That's exactly what the F&I man told me on my last new [non Audi] purchase.

My family has always had non-auto dealerships and/or worked at dealerships.
There are backend kickers, spiffs, gates, and other incentives neither the consumer nor Edmunds will never know about or what they amount to.
Dealerships of any flavor are not losing money on any deal. Ever.

Don't even get me started on "shows" on trade-ins and backend packing.

I've been in sales for 35 years, still am, and will never sell a car or use those methods.

And, apologies for my rant...


PSA: This is a smart group, but please never let someone you care about tell a salesman 'this is how much I can pay a month'

GR8-LIFE

I've had local dealers not even reply to my request of 1% over invoice request. Or their reply is along the lines of "sorry, as long as we have 2012's on the lot, no way can we order a 2013for 1% over invoice." Then I have had dealers who are 5 hours away form me reply with 1/2 over invoice, $599 dealer fee (which I try to always split 50/50) and the DAG fee. Then AUDI Loyalty or conquest on top of that. i dont know why one dealer can do it and another wont. But I am certainly not talking to the ones that wont

xradman

It's because most metro area dealers have more buyers than cars. I don't think they have much flexibility in how many cars they are allotted by AoA.

Christopher Marino

Bottom line in any business is that if they can sell it to someone else who WILL pay the extra fees, they will. If they have more buyers than cars allotted, they can sell for whatever they want. Often times it is best to go to a dealer who has more inventory than buyers and will be willing to deal. No, they are not "losing" money selling at invoice, they just aren't making as much. In any business, you are going to get a better price from the guy who is hungrier.

And in the car business, there are incentives for units sold, margins, etc. that have nothing to do with the invoice price, so even when they are selling a car at or even below invoice, the unit sale helps them on the incentive side.

In some cases, different salesmen within the dealership will offer different things ... the guy who has already met his monthly quota is far less likely to deal with you than the guy who hasn't.