Exploring the Unknown

Exploring the Unknown
Representing the 99%!

Wednesday, August 12, 2015

Beware of BullShit Dealership Fees!

Would You Buy A Bike Out Of State/Country?
Picture © Ducati Austen

Having only ever purchased a new bike once before (Betty-Ann), it was in Ireland and like most EU countries, there are rarely any "hidden fees" behind the purchase price. The price you see is the price you pay for the most part. It's a nice set up, something that I miss actually as I find the prices, taxes, dealership fees for shipping, preparation and the so called "documentation" fee all just overwhelming when shopping in Quebec, Canada. Lets be frank, in most cases we feel like we are being ripped off. But are we really? What is actually involved in setting up a bike for a customer for dealerships and should we be paying anything, if at all?! Ducati Austin in Texas, U.S. of A. highlights what is involved. They recently posted two videos via the Scrambler Ducati Forum specifically addressing the unboxing and pr-delivery set up of a Scrambler Ducati Urban Enduro.


Picture © ScramblerAdmin
The debate is a sensitive issue for dealers and customers alike. After all, some reports claim that Harley-Davidson reimburses its dealership network in the USA for unboxing and pre-delivery. If true, than its reasonable to assume that the majority of the major players do so as well. Here in Canada, dealers do indeed receive reimbursement so don't fall for dealer prep fees! According to Unhaggle.com, "dealers might attempt to cloak it under some other names including: shipping and handling or simply shipping". Make a note of it and negotiate accordingly! Whilst Brian Manning, Certified Lead Technician at Ducati Austin, may be right in that there is a good amount of work to get the bike set up before they can even roll it into the showroom, that doesn't mean the cost of set up should fall on your shoulders.

Picture © PCP Motorsports
I think what is perhaps most upsetting about dealership fees is that there is no standardization amongst them. One dealer will literally charge upwards of $1000, 00 USD more than their competitors whilst others won't even charge you a cent. Making matters more confusing is the fact that the very same bike that was worth $8, 500 (without applicable dealership fees) in July is suddenly only worth $6500 (sometimes even less) in October. Yes, I understand that it inevitably comes down to supply and demand. I also understand that dealerships have to move product and will discount merchandise to get them off their showroom floor. However, if we are supposed to take dealerships and their fees seriously, than there needs to be more transparency. Consumers would be more understanding and willing to fork out cash for said fees if it wasn't so damn cryptic and confusing even at the best of times. For instance, in Canada, mandatory fees include a destination charge, registration and insurance.


Accepting that there is a destination charge, pre-delivery fees are another sore point altogether and seems to me to be more a straightforward case of dealership greed. As Brian Manning points out, dealerships have a contractual obligation to ensure that the motorcycles that they are selling are prepped and readied before release to its new owner. Undoubtedly, this is for liability issues. If Ducati Austen, for instance, didn't do the pre-delivery inspection and something happened to the customer whilst riding his or her new bike - you can bet your ass Ducati USA would be pointing the finger at Ducati Austen to pay for the damages or worse, a pay-out to the deceased riders family. So why then are we being charged for this when clearly it is the responsibility of the accredited dealership?

According to Unhaggle.com "there are three parts needed to calculate the actual net cost of the dealer: including invoice prices, factory holdbacks, and factory to dealership incentive. Often it averages around 3-5% of the overall cost of the car." Furthermore, did you know that you could request the dealer to show you the factory invoice of the motorcycle in question? For further information on other mandatory fees check out the dealers cost report. Other fees to avoid are floor plan fees and especially additional dealer mark-up fees. I get that dealerships are in business to make money but there is a difference between making an honest living and out and out robbing customers.

Don't even get me started on documentation fees.  I have seen the price range from $200 USD to $500 USD alone. Some states in the USA have set some legal requirements where document registration and contracts are concerned. However, for the price that dealerships are charging for said documentation fees, you would expect them to be able to notarize your marriage/divorce/births for you as well. Its beyond scandalous and frankly, I am surprised that it is even legal. That being said in Canada this could be illegal so check with a local governing authority in your province or territory. Administrative fees, albeit a part of owning a business, are often a hidden fee added to the purchase price of a new vehicle that purchasers don't notice until its too late. Be sure to read your contract carefully before putting pen to paper.

Picture © Ducati
Some dealerships will not budge on these fees. This is partly because so many folks are just not willing to put themselves out and go further away to buy a bike. Especially in areas where dealerships are few and far between. However, call me crazy, but I'd sooner travel to other end of the country to buy my bike and make a road trip out of it than give some seedy dealership the satisfaction of taking my hard earned cash. Adding to my frustration is the fact that there is very little in the way of motorcycle information out there. Unhaggle.com for instance focuses on cars, trucks, and sub's.

Picture © USA Today
Nevertheless, ignorance is no excuse, do your research before stepping into a dealership. Whilst ideally we could all walk in and pay with cash, if your going to take a loan check with your local credit unions first or even the bank. The interest rates aside, being able to walk in with cash in hand will likely help you circumvent the issues described above. Finally, not all dealerships are out to rob you blind. There are unfortunately more horror stories than happy ones, but with due diligence you should be able to pick up an amazing deal. Just know your limit and stick to your guns. After all, patience is a virtue and I have no doubt that your dream bike can be had for the right price.

Special Thanks To Ducati Austen!

2 comments:

  1. Don't pay the Ferryman ... or the Stealership!

    ReplyDelete
  2. All I can say brother is buying a new vehicle is a major pain in the ass from the pocket books standpoint. Once was enough for me...

    Percy

    ReplyDelete