Market adjustment. "The dealer's making a profit adjustment," says Bartlett. "It's based on supply and demand."
You might see this add-on in the case of a vehicle that's particularly popular or scarce. "In the end, it's based on economics, but it feels rotten," he says, adding, "Technically, anything on the price can be negotiated."
This price hiking "can vary widely," Bartlett says. And not everybody does it. "Some manufacturers discourage the practice," he says.
ADM/ADP. Additional dealer markup or additional dealer profit. What is it: basically a fee to increase dealer profits on the car, says Ken Potter, vice president, automotive at CarsDirect.com. ADM or ADP is just a way to start the price negotiations "a little higher," he says.
Dealer fee/processing fee/paperwork fee. Typically, these fees sometimes appear if you apply for dealer financing and are "additional profit," says Potter.
Cost. Varies. And many dealers don't charge them at all.
Destination and delivery charges: Also called "shipping and handling" or "D and D," this is what the manufacturer charges to transport the car from the plant to your dealer. On most cars, this will range between $500 and $1,000, says Caudill. The average is usually somewhere between $695 and $750, says Potter.
It can be broken out on the MSRP or included in the total, says Caudill.
Dealer financing. A big chunk of the cost of any vehicle lies in how you pay for it. It's always a good idea to arrange your financing before you go shopping for a car and, of course, the interest rate and term of the loan affect your monthly payment.
But if you choose to finance through the dealership, remember the dealer isn't required to offer you the lowest rate that your credit history merits. "The rate could be inflated beyond what you'd get elsewhere," says Bartlett.
The dealer, "is the middleman connecting the lender to the customer," he says. While the markup can vary, it's typically "at least one-half of 1 percent," he says. The exception to this is some of those super-low rate offers. And often you can choose between the low rate and a rebate, Bartlett says.
Create a news alert for "auto"