Admin fees

[Pondrew]

Admin fees are useful for dealers for two reasons:
They use them as 'marketing tools', to advertise a car's price, say, £300 cheaper than another dealer that doesn't charge fees for the same car, then add on the £300 to make up the difference. So the car will look cheaper but really isn't.
They also use them as a 'discount scheme'. Waiving the £300 fee is considered (by them) to be giving a £300 discount, so trying to make out they are doing you a favour.

As usual, the car trade's terrible reputation is just made worse by these semi-hidden costs. But IME they don't give a toss about reputations, just money, money and money.

 

[Pondrew]

Regarding the admin fee, we did ask the girls in the office to work for free, I can't post the reply.

Hang on....a couple of issues there....
Firstly before admin fees were loaded on top of selling prices, how did 'the girls in the office' get paid?
Secondly, the excuse for dealers' servicing costs being £200 an hour has always been 'to help pay for the other parts of the dealership', so the admin fee shouldn't come into that equation.

 

[Scubaregs]

One car dealer will offer you a £1000 more trade in than another, because the car they are trying to sell to you is £1000 more than similar cars elsewhere. It's psychological to make the customer think they are getting a better deal because they are getting more for there part ex.

ALL that matters is the price to change, or your monthly payment over the equivalent term.

If you are not happy with a deal offered, look elsewhere.

If you hate car dealers, don't use them. Buy privately.

No industry or business is perfect, people love to hate banks, insurance companies, estate agents etc. Funnily enough though nearly everyone uses them.

 

[MikeyH]

Think the point is that everything you buy has cost added in, from a pair of socks from M&S to a new car. It’s all part of what makes up the price, no one ask how much it cost to process the paperwork on the cost of the socks but it is in there. So surely the admin fee is part of what the car costs to buy and should be added to the advertised price. The gripe here is that they put it as a separate cost to keep the advertised price competitive. It must have always been in the price for years and no one bothered about it.

Seriously? Not adding on the £25 admin cost into the price of a £20k car makes the advertised price more competitive?

I was talking about the cheaper end that I buy from, a car worth £5,000.00 to £7,000.00. To be honest I don't think most dealers are dodgy anyway, just some, otherwise they would be out of business fairly quickly these days with reviews everywhere. I've only ever bought 2 of my cars from a dealer and they have both been okay but we are talking cheaper cars, years ago before all this admin stuff started. I usually now buy private as it is nice to see who owns it and use the money saved to do work if something needs doing.

 

[Scubaregs]

[ref]MikeyH[/ref], I wouldn’t have joined this industry 15/20 years ago as back then it was horrendous.

We have internal and external audits, extremely strict GDPR controls, mystery shoppers, customer satisfaction surveys for both us as a Business and for BMW. As a product genius I can chat to customers in the showroom or on the pitch, show them cars and make suggestions as what may meet their needs, but I CANNOT talk figures/money with them as I'm not a product consultant and haven't taken and passed the SAF exams.

If I have a customer that does wish to talk about finance/figures, I immediately pass them onto a PC who can.
As a product genius, I'm on a salary and cannot earn commission.

 

[obewan]

I wasn't trying to light a fire here, so I'll try and explain my original question a little better.

Many years ago on 2 separate used car deals, after agreeing the sale I got the 'btw we have a £50 admin fee......'
I believe now that this is illegal (it may have been then) and the price listed is the total price.

In my experience of used car deals the dealer will often throw in a service or MOT or a few gallons of petrol etc.
None of these are itemised in the sale price
So back to my question, why do some dealers include it in their pricing? Especially when it is so divisive.

The one at Big Motor World (£300) sparked my curiosity. The car price quoted (dealer feedback aside) looked good.

I accept the price is the price, if you're happy with the deal it doesn't really matter how it's made up
I genuinely thought there may be some monetary benefit to the dealer, claiming tax back or something.

Talking of us sellers putting one over the dealers with a dodgy car, I agree it will go on, but we're not all like that.
I part ex'd the wife's car last November. Spent a couple of days cleaning and polishing it to within a inch of its life. Even bought some paint to repair a couple of light scratches on the door sill

Salesman came out to value it, didn't get any closer than 6 feet, never opened the bonnet, doors or boot.
He couldn't have been less interested. I did notice he sold it on in the next 7-10 days though

 

[Scubaregs]

[ref]obewan[/ref], Thanks.

Salesman was very lazy, we drive all the part exes round the pitch, lock to lock and in reverse. Then driven over our Hunter tyre alignment and tread depth measurement machine. Part ex is done on a managers tablet and asks for various information and pictures. Any damage must have an accompanying picture. We can't generate the part ex appraisal valuation until this is completed, uploaded and signed off.

 

[pvr]

[ref]obewan[/ref], Thanks.

Salesman was very lazy, we drive all the part exes round the pitch, lock to lock and in reverse. Then driven over our Hunter tyre alignment and tread depth measurement machine. Part ex is done on a managers tablet and asks for various information and pictures. Any damage must have an accompanying picture. We can't generate the part ex appraisal valuation until this is completed, uploaded and signed off.

That seems comprehensive. My local dealer has never even looked at my car as they value it just online.

 

[legin]

It appears our Dealership is cursed also, judging from the amount of EML lights that "just came on as I drove in"

I learned a valuable lesson when appraising a part ex at handover just after I had been trained to do so, both myself and the Product consultant who also appraised the car, missed a massive dent on the roof. Customer didn't think to mention it, but to be fair it probably happened after he :driving: parked up and came in to pick up his new car.

This was your post "I would spend more time evaluating the dodgy p/x,s you routinely get stung with then presumably pass on with an admin fee."

From that you are inferring we are being dishonest.

In the first scenario above, we will take the car into the workshop and ascertain the reason for the EML being on. If it is a simple fix, like an O2 sensor, then most likely the deal would be unchanged. If it needs further investigation and is potentially expensive the customer is offered several solutions and we are happy for them to take their car to have the fault remedied elsewhere and pick up their new car under the original deal once this has been done.

In the second scenario, the business took the hit as both myself and my colleague missed it. Customer had already left in their new car, the deal was completed.

So your inference that we pass cars on with EML's on and damaged roof panels, etc, etc, etc, is simply ludicrous.

Not inferring anything in your case. However for clarity did you sell the car with a repaired roof, disclose the repair to the customer, pass it to auction undisclosed ?.
I can easily name a big premium brand dealership that tried to disguise and pass on a car with known faults to me recently. To suggest its isnt happening is naive in the extreme. Dealers often repair after sale now as anything the buyer doesnt spot is money in the pocket, in other words they pass it on.