What is a dealer processing fee versus a destination charge? Do you usually pay both?

[Anonymous]

First time buying a car by myself and I am confused.

[Anonymous]

Yes, one usually pays both. Destination charge is added by the manufacturer for shipping the car to the dealer, and it appears on the window sticker. Dealer processing fee is added by the dealer, and is often a non-negotiable flat rate (sometimes capped by state law).

[Anonymous]

Anonymous wrote:Yes, one usually pays both. Destination charge is added by the manufacturer for shipping the car to the dealer, and it appears on the window sticker. Dealer processing fee is added by the dealer, and is often a non-negotiable flat rate (sometimes capped by state law).

The processing/doc fee is never non-negotiable unless you’re buying a Range Rover or GT3.

OP- negotiate an OTD price. Whether the dealer makes their cut via the doc/processing fee or less of a discount off MSRP shouldn’t matter.

[Anonymous]

I did not pay destination fee.

[Anonymous]

So much misinformation in a single thread with so few posts.

The destination fee is a part of the cost of the car. Regardless of whether it shows up as a separate item on the sales sheet you signed, it's there, you paid for the destination cost, just like you also paid for the wheels that came with the car, even though there is no separate item that says "wheels" on the sales sheet.

The dealer processing fee is something else entirely. Even though dealers will say they have to charge it to everyone, and this is factually true, but they can offset it with a discount on the price of the car.

The way to negotiate is not the so called "Out the Door" price. This is an idiotic way of negotiating on a car because it hides the true underlying cost of the car and makes the deal impossible to compare with other deals that are in different states with different tax rates.

What you should focus on is the "Price before tax, tags, and registration". This would include everything aside from the government-collected amounts.

Again, don't negotiate OTD price - it's the sign of someone who doesn't know what they are doing.

[Anonymous]

Anonymous wrote:So much misinformation in a single thread with so few posts.

The destination fee is a part of the cost of the car. Regardless of whether it shows up as a separate item on the sales sheet you signed, it's there, you paid for the destination cost, just like you also paid for the wheels that came with the car, even though there is no separate item that says "wheels" on the sales sheet.

The dealer processing fee is something else entirely. Even though dealers will say they have to charge it to everyone, and this is factually true, but they can offset it with a discount on the price of the car.

The way to negotiate is not the so called "Out the Door" price. This is an idiotic way of negotiating on a car because it hides the true underlying cost of the car and makes the deal impossible to compare with other deals that are in different states with different tax rates.

What you should focus on is the "Price before tax, tags, and registration". This would include everything aside from the government-collected amounts.

Again, don't negotiate OTD price - it's the sign of someone who doesn't know what they are doing.

the destination charge is part of the cost of the car. The manufacturer sells the dealer the car, the fact that they include a separate line item for shipping is irrelevant to the buyer. You should absolutely focus on the final price first and separately from any other part of the transaction (and run if you see them draw 4 boxes on a sheet of paper)