Understanding Mandatory Fees and Dealer Fees

Buying a new car can be stressful, especially if you haven’t done it in over five years. There’s the issue of choosing a colour, make, extra features (if you want them), and of course the messy business of negotiating a price. If you don’t do the research before heading to the dealership, you could fall into a trap many buyers before you have succumbed to and leave the dealership with much more than you bargained for, and not in a good way.

Before you even start talking to a salesperson, arm yourself with enough knowledge about the car to reduce the likelihood of you getting taken for a ride (no pun intended). The first thing you need to do is the research on the car cost. Canada dealers get their units at wholesale prices. You can find out more about this via invoice price reports. Companies like Car Cost Canada offer invoice price reports at $39.95 while Unhaggle.com lets you access it for free. Once you get the factory price of the car, factor in what the dealer needs to make in profit and you can start benchmarking your price for negotiation.

Next, it is also important to understand which fees are mandatory and which fees are optional dealer fees that can be negotiated out of your purchase. The more information you have, the better your chances are of getting a reasonable price, and one that you can be happy with.

Here’s a quick rundown of the mandatory fees you’ll need to pay when purchasing a car according to the Ontario Motor Vehicle Industry:

1. HST or Harmonized Sales Tax – 13% on car price
2. Air tax – Air conditioner excise tax of $100 for cars with air-conditioning
3. OTS tax or Ontario Tire Stewardship fee – For passenger vehicles and light trucks the fee is $5.84 per tire
4. OMVIC fee – A transaction fee to support OMVIC’s (Ontario Motor Vehicle Industry Council) dispute resolution activities
5. PPSA fee – If you finance/lease a car, the bank/leasing company will charge a fee for setting up the loan and registering the lien $50 to $75.
6. Licensing – Most dealerships will take care of this for you and will charge an admin fee of $50 to $75.

If it’s not listed above, consider it a dealer fee. An important thing to remember is that mandatory fees should not be added to the car’s price after you’ve negotiated it, it must already be included. The same goes for advertisements that include the price of a car – whatever is advertised should be the all-in price.

Don’t be pressured into buying additional products or features you don’t believe have value. If you’re being made to believe that a certain add-on is compulsory because it’s already been installed, you have the right to report them to the OMVIC for deliberately misleading you.

Dealer fees and add-ons like security packages which include a police traceable code in case of theft could already be part of your insurance coverage so make sure you do the due diligence and read your contracts before signing them.

A great way to avoid paying for more than the car is worth is to do extensive research online and see what other people are paying for the same car. Find out also if there are any on-going Canadian dealer incentives that you could take advantage of.

Consider These Points Before Investing In a Used Ford

It may be more prudent for you to buy a used Ford rather than one from a showroom, but to strike the appropriate deal; you need to be knowledgeable and market-savvy.

If you’re in the market for a used Ford in Houston, you firmly know that it’s primarily because you get a right deal on it. For you to get this perfect deal, you need to follow a few approaches, which are:

  • • Find out the true value of a used Ford vehicle from the dealer — If, for instance, you want to buy a certified pre-owned Ford in Houston Texas, obviously you would have to speak to a few ford dealers Houston. They will calculate the depreciation value of the Ford vehicle and total up its final worth for you.
  • • Tell the Ford dealer you mean to buy the Ford today — To put pressure on Ford dealer to sell you a good vehicle on the lot, you need to time your visit to ford dealership in Houston TX well. For instance, go mid-week to Ford dealer and let him know you mean to have a car that very day. It will make him realize that you mean business and aren’t just a casual browser in the shop. Therefore, he will give you extra attention and sell you his best car at his perfect price. Mid-week, Vehicle agencies have fewer footfalls, so any agent of used Ford Houston he will be only too willing to close an ideal deal with you as soon as he can.
  • • Can you afford this price? Sure, you may admire the Ford vehicles for their style, classy looks and superb performance, but can you put down as much as is wanted for it? If you want to buy it at a price lower than what’s quoted, you need to have good reasons for it. Look for a reasonable on-the-road or out-the-door deal and negotiate it with the dealer.
  • • Ask about the previous owner of Vehicle — Find out if the car has had just one owner or a string of them. If the latter is true, you can use this as a bargaining point to lower the price. The car’s carfax or history report will provide you with these details.
  • • Look carefully for the Ford’s pros and cons — Look at the Ford’s merits and demerits with equal care. For instance, look for cracks, scratches and worn out tires as much as you would at its plush interiors so that you can negotiate a good deal by bringing down the price.
  • • Estimate the value of Used Ford — When you negotiate the price of a Ford vehicle, keep in mind the maximum on-the-road price you can comfortably pay. Since you’ve already inspected the car, you know its exact value. You also know all the problem areas that are going to cost you money, so make a rough mental estimate of all your additional expenses and minus this from your out-the-door price or your on-the-road price. Also minus an extra 10% and make the resulting amount your first offer.