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270 Posts
Bogus fees are bogus. In Canada they are usually called admin fees.
However, it seems the market for the RAV4 Hybrid is very different here, at least in Ontario. Few dealers actually have them on the lot, so there are a lot of custom orders, yet people are still consistently getting 4-digit dollar discounts off MSRP, and many if not most dealers don't charge the bogus admin fees.
The bogus admin fees are allowed, but I guess there is enough competition locally that dealers have moved away from them because the optics are bad. If I were given two identical quotes, one with say a price of $1000 over invoice and another of say $700 over invoice but with a $300 admin fee, I'd take the $1000 over invoice, just to discourage the practice of charging bogus admin fees. IMO, that line should not even exist on the contract.
Things may get tougher though, since as of yesterday, Toyota is on a reduced production schedule, due to their steel plant explosion last month.
I agree that freight and PDI are also bogus names for a part of the pricing that should just be put in the MSRP, but at least that's consistent. They're the same number for everyone, and they're from the manufacturer, not the dealer. Doc/admin fees OTOH are completely made up numbers at the discretion of each individual dealership that don't actually pay for anything. They're purely a means to hide a portion of the profit margin on the contract from the customer.
So in Ontario:
Negotiated price plus:
Freight - Legit, but stupidly separated out IMO.
PDI - Legit, but stupidly separated out IMO.
OMVIC fee - Legit and only ten bucks. It stands for Ontario Motor Vehicle Industry Council.
AC fee - Legit air conditioning tax.
Environmental fee - Legit. I think it was $28.xx for my Limited Hybrid
*Admin fee* - Totally bogus. This should not even be there. In fact my dealership specifically states "no added fees" meaning no bogus admin fee. The price you negotiate is the price you negotiate... plus freight, PDI, OMVIC, AC, environmental fee.
However, it seems the market for the RAV4 Hybrid is very different here, at least in Ontario. Few dealers actually have them on the lot, so there are a lot of custom orders, yet people are still consistently getting 4-digit dollar discounts off MSRP, and many if not most dealers don't charge the bogus admin fees.
The bogus admin fees are allowed, but I guess there is enough competition locally that dealers have moved away from them because the optics are bad. If I were given two identical quotes, one with say a price of $1000 over invoice and another of say $700 over invoice but with a $300 admin fee, I'd take the $1000 over invoice, just to discourage the practice of charging bogus admin fees. IMO, that line should not even exist on the contract.
Things may get tougher though, since as of yesterday, Toyota is on a reduced production schedule, due to their steel plant explosion last month.
I agree that freight and PDI are also bogus names for a part of the pricing that should just be put in the MSRP, but at least that's consistent. They're the same number for everyone, and they're from the manufacturer, not the dealer. Doc/admin fees OTOH are completely made up numbers at the discretion of each individual dealership that don't actually pay for anything. They're purely a means to hide a portion of the profit margin on the contract from the customer.
So in Ontario:
Negotiated price plus:
Freight - Legit, but stupidly separated out IMO.
PDI - Legit, but stupidly separated out IMO.
OMVIC fee - Legit and only ten bucks. It stands for Ontario Motor Vehicle Industry Council.
AC fee - Legit air conditioning tax.
Environmental fee - Legit. I think it was $28.xx for my Limited Hybrid
*Admin fee* - Totally bogus. This should not even be there. In fact my dealership specifically states "no added fees" meaning no bogus admin fee. The price you negotiate is the price you negotiate... plus freight, PDI, OMVIC, AC, environmental fee.