When it comes to car ownership, expenses are already a given, from the car’s actual sticker price to the peripheral costs such as registration, maintenance, and insurance. However, there are other car-related fees that are not as prominent yet represent a drain on your budget as well.
Philkotse.com compiled just some of these lesser-known payments you might be making, to paint a clearer picture of the total cost of car ownership.
1. Processing fee
The car dealership will typically charge car buyers a processing fee, also known as a documentation fee; this is intended to cover the cost of processing the ownership documents. This fee ranges from PHP 5,000 to PHP 20,000 depending on the dealership and the location.
Dealers will most probably tell car buyers that the fee is non-negotiable, but it’s partly true - if you don't make a counteroffer. You can test them on their willingness to lower the fee, depending on the particular deal you got on the car purchase.
If the dealership readily agrees on a reduced fee, then it’s a clear sign that you would have paid a considerable extra for the car.
The processing fee in dealerships is also called the documentation fee
>>> Buying tips: 6 things you need to know about dealer's invoice.
2. Delivery charge
Since Henry Ford came up with the Model T, car manufacturers have been imposing a shipping charge (sometimes called destination charge) for delivering cars from the assembly plant to the car dealership, especially overseas.
Jake McKenzie of Chicago-based online parts retailer Auto Accessories Garage even states that shipping costs are expected to be directly passed on to the car buyer and that they can't be avoided.
Certain dealers, however, have begun to tack on a separate delivery charge above and beyond the existing destination charge; this means car buyers are charged twice for shipping the unit. If you notice a separate delivery fee on the breakdown of expenses, ask for the second fee to be removed.
The delivery charge is also referred to as destination charge
3. Advertising fee
Advertising and marketing the car costs money on the part of automakers, and this signifies yet another markup for every vehicle they deliver to the dealership.
While the advertising charge should already be included in the invoice price on the dealer, some unscrupulous would still try to make the car buyers pay twice, first as the part of the invoice and the second as a separate charge when they finalize the sale.
Be vigilant enough to check the final paperwork, and if you spot that they are charging you twice, you can ask the car dealer to remove it.
The advertising charge is already in the invoice price to the dealer
4. VIN (Vehicle Identification Number) etching
The etching is an anti-theft measure that involves having the car’s VIN (vehicle identification number) etched on the windows or side mirrors of their cars. A variant of this uses the car’s license plate details.
While etching itself is a sound idea to secure your car, it may end up costing a lot more if it’s done at the dealership. You might want to forego this service or at least negotiate the etching charge.
Third-party glass etching services are available for less, and sometimes local civic or car clubs do it for free. DIY etching kits are also available if you prefer to do the job yourself.
VIN etching is an anti-theft measure as recommended by insurance companies and police
5. Fabric protection plan
Fabric protection involves treating the car’s interior, in order to make it resistant to stains. Dealerships offer this as a premium service amounting to PHP 20,000. If you have a big family with kids who are likely to make a mess inside the car, then you might consider getting fabric protection.
A cheaper alternative, however, would be to buy a can of fabric and upholstery protector (which only costs a fraction of what the dealership is asking you to pay) and treat the car’s interior yourself.
6. Paint protection
Cars are every bit about form as they are about function, and you would naturally want your set of wheels to look constantly good despite the onslaught of the elements.
Paint protection is necessary to preserve your car’s paint job, and car dealers are all too happy to offer you their pertinent services – for a pretty penny, usually PHP 25,000.
Most car dealers persuade you to have paint protection for your brand-new car
Opting for paint protection is generally considered an easier alternative to washing and waxing the car.
But if you prefer something that’s relatively light on the budget, ditch the paint protection and just put in a little elbow grease in cleaning and polishing your car’s exterior. Not only is it cheaper, but it also provides you with a personal sense of accomplishment.
>>> Grasp your attention: 7 common mistakes when taking care of your car paint & ways to avoid them.
7. Dealer preparation
As the first destination outside of the factory, car dealers have the burden of preparing each and every unit delivered to them, making sure that everything on the car works and that nothing was damaged during transit.
Dealership staff also take care of cleaning the car and making it presentable to customers on the showroom floor, and all that labor and effort definitely translates into yet another charge, usually filed under Miscellaneous.
Car dealers have the burden of preparing each and every unit delivered to them
It’s doubtful if you can do away with this since it’s a necessary service after all (unless you’re willing to take ownership of a dusty, musty car that’s been sitting on the backlot for months).
>>> Check out: Car buying tips & tricks to avoid hidden fees from dealers.
To sum it up, car buyers need to be aware of the fees and charges they are paying at a car dealership; some of those fees are avoidable, others are not. Knowing which fees are necessary allows you to save money that can be used for other purposes, like fuel and accessories to customize your ride.
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