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Discussion Starter · #1 ·
I'm being quoted at $500 over invoice on an Enclave, but the saleman is telling me that my invoice price (from Consumer Reports) is wrong because GM passes on a 2.5% advertising fee (National & Regional). He claims there's nothing they can do about that because that's what they get charged by GM when selling that vehicle. Is this on the up and up? I know I could negotiate with a dealer trying to pass on their own advertising costs to me, but is he snowballing me with this GM-administered fee, or is it really the case? Seems fishy. Please help.
 

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Jimbobwae said:
I'm being quoted at $500 over invoice on an Enclave, but the saleman is telling me that my invoice price (from Consumer Reports) is wrong because GM passes on a 2.5% advertising fee (National & Regional). He claims there's nothing they can do about that because that's what they get charged by GM when selling that vehicle. Is this on the up and up? I know I could negotiate with a dealer trying to pass on their own advertising costs to me, but is he snowballing me with this GM-administered fee, or is it really the case? Seems fishy. Please help.
I'm no expert, and I didn't stay in a holiday express -- so YMMV.....

Most dealers (and I read something about all GM dealers as of April are now being assessed)
a charge for Advertising (I heard it was 2% but that was on the internet -- so who knows).

Some argue that this is the cost of doing business and the dealership should eat this cost.
I wish it was just embedded in the invoice cost and then the dealership could show you
it in black and white -- that would at least alleviate some amount of mistrust.

Is it legit -- IMHO there is some advertising cost the dealership pays, so I believe it is a legit cost.
How it is accounted for, and should it be passed on to you/me?? I don't know --- to me that is like the delivery fee --
if everyone pays it -- just put it in the invoice!

Could you negotiate the amount down -- you can try --
I would not pay $500 over invoice for an '08 regardless of the advertising fee. That's just me --
I'm looking to order an '09 and I'm hoping to pay invoice and I have a GM Supplier code in my back pocket.

M
 

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IIRC, Tralfaz recently said his dealership is asking $100 under invoice on all Enclaves on the lot or in transit. Bottom line, shop around.
 

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Here's what Edmunds has to say about it:

"Advertising fees: Sometimes buyers look up invoice prices on Edmunds and find they don't match the invoice price given by a dealer. Is the dealer trying to put one over on the buyer? Not necessarily. This is probably because an advertising fee is involved. If an advertising fee is listed on the car's invoice we consider it a legitimate fee that should be paid. However, if the advertising fee is written into the buying contract by the dealer it is another example of a dealer trying to pass along his expense to the buyer. "

http://www.edmunds.com/advice/buying/articles/117494/article.html

My experience is that they are usually legit and average 1-2% of MSRP. But not all dealers participate in local/regional advertising programs so the ad fee is not going to be the same at every dealer. Dealers in large metro areas tend to have higher ad fees than ones out in the middle of nowhere. When I bought my Acadia, dealers in the metro Omaha area all had 2% ad fees on their invoices, while a couple dealers in smaller towns that I contacted had 1%.
 

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The advertising fee is completely silly IMO. It should make them a profit to advertise, so they should pay YOU!

I never allow an advertising fee to be written in on the contract. Sure, the dealer can charge me more, but at least its not BS, its negotiated!

TM
 

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Discussion Starter · #6 ·
Thanks, Loach, that nugget from Edmunds will help me diffuse my wife. I completely agree that the cost of advertising should be paid by the manufacturer, but in the end they get their money from us, the consumer, so it's in the cost of the vehicle anyway. But they should at least just lump it under the invoice cost and be done with it. GM shouldn't publish an invoice number and then change it to reflect advertising costs. The particular dealer I'm speaking about informed me that they do not charge out their advertising costs on the vehicles because it comes out of their own bottom line. Imagine that, honest, reputable business practices, in this century!

BTW, this pricing is for an 09 Enclave. I've offered to be in there right away when orders will be accepted and place our order for the vehicle. By getting that price they get a quick, no-hassle sale AND they get an Enclave sale right out of the gates, thus helping them get more allocations later in the year and helping them turn more profit down the road.
 

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Jimbobwae said:
Thanks, Loach, that nugget from Edmunds will help me diffuse my wife. I completely agree that the cost of advertising should be paid by the manufacturer, but in the end they get their money from us, the consumer, so it's in the cost of the vehicle anyway. But they should at least just lump it under the invoice cost and be done with it. GM shouldn't publish an invoice number and then change it to reflect advertising costs. The particular dealer I'm speaking about informed me that they do not charge out their advertising costs on the vehicles because it comes out of their own bottom line. Imagine that, honest, reputable business practices, in this century!

BTW, this pricing is for an 09 Enclave. I've offered to be in there right away when orders will be accepted and place our order for the vehicle. By getting that price they get a quick, no-hassle sale AND they get an Enclave sale right out of the gates, thus helping them get more allocations later in the year and helping them turn more profit down the road.
Sweet -- So are they charging you for advertising or not -- I am a bit confused....
Did they tell you when the '09 can be ordered - I'm in the same boat.

thanks,

mike
 

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Discussion Starter · #8 ·
Well, unfortunately I seemed to know than the salesman about the 09 Enclave. From other treads I've read mid-May is when orders will be accepted.

Am I paying advertising? I believe the concensus is that the added 2% (ish) to the invoice price is on the up and up and from GM/Buick. However, recommendations say I COULD go try a more rural dealership to see if I could get an invoice cost that's less, but I believe I'm already at that relatively rural dealership. In the end, though, when it comes to the hard numbers and haggling, that's my wife's call. She's a bulldog when it comes to that stuff, but I'm the one who has to start out with the dealers and work them on price and such, because the fact is that men just tend to have more success when it comes to haggling, at least over cars. It's a cultural thing but I've seen it already with my wife (when we tried to get into an 08).
 

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Jimbobwae said:
Well, unfortunately I seemed to know than the salesman about the 09 Enclave. From other treads I've read mid-May is when orders will be accepted.
I'm finding the same thing......... two dealerships I have talked to -- one said mid-May
the other July -- (I told that sales guy to recheck his sources).

Am I paying advertising? I believe the concensus is that the added 2% (ish) to the invoice price is on the up and up and from GM/Buick. However, recommendations say I COULD go try a more rural dealership to see if I could get an invoice cost that's less, but I believe I'm already at that relatively rural dealership. In the end, though, when it comes to the hard numbers and haggling, that's my wife's call. She's a bulldog when it comes to that stuff, but I'm the one who has to start out with the dealers and work them on price and such, because the fact is that men just tend to have more success when it comes to haggling, at least over cars. It's a cultural thing but I've seen it already with my wife (when we tried to get into an 08).
I just submitted a bid with exact 09 option codes to my preferred dealership and specifically
said I was not interested in paying for the advertising on an invoice purchase (figured it was
a good starting point). I'm waiting to here back from them.
I'm in a moderate size metro area -- and this dealership is in a small town on the fringes
of that metroplex --

m
 

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The advertising fees are not made up by dealers after the fact, but charged to them and right on the invoice straight from GM--with the extra fee going into a central advertising "account" to pay for regional ads, etc. Nearly every dealer participates.

This question comes up 10 times a day on various new car forums, yet still is not understood. Think of it as a piece of equipment--even though you can't physically use it--that's on your new car. Part of the pricing, from manufacturer.

What then makes for further confusion is that the percentage charged can vary from dealer to dealer and region, which is another reason why it can't legitimately be included on the various sites that give pricing--well, that, and the fact that MSRP/invoice in general can have fluctuations at different points of a model year, in general.
 

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Dealers get a 3% kick back from the manufacturers usually among other incentives. I'm sure that an "advertising fee" which I have never paid, is icing on their cake.

They stand to make more on servicing your vehicle and selling your used trade in.

TM
 

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Discussion Starter · #12 ·
Thanks Cadycruiser, that's a good explanation. I wish GM would just lump it into the invoice price and not mention a word of it. That way, it's really built into their own cost of the vehicle, like all other products we buy like Coke, Nike, etc. Really, they should do it like they should do it for their delivery charge. Make everyone in the US pay the same exact amount (like they do for the delivery fee, whether you live across the street from the factory or in the other corner of the country) and lump that into the invoice and never make a mention of it to the consumer.

Cadycruiser, you mentioned ALMOST every dealer participates in that regional advertising thing that increases the invoice cost. How might I find a dealer who doesn't? I have no problem driving a couple hundred miles to save 1500 bucks. It'd give me time to bond with the 'clave, but that drive over would be a long one.
 

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Jimbobwae said:
Thanks Cadycruiser, that's a good explanation. I wish GM would just lump it into the invoice price and not mention a word of it. That way, it's really built into their own cost of the vehicle, like all other products we buy like Coke, Nike, etc. Really, they should do it like they should do it for their delivery charge. Make everyone in the US pay the same exact amount (like they do for the delivery fee, whether you live across the street from the factory or in the other corner of the country) and lump that into the invoice and never make a mention of it to the consumer.

Cadycruiser, you mentioned ALMOST every dealer participates in that regional advertising thing that increases the invoice cost. How might I find a dealer who doesn't? I have no problem driving a couple hundred miles to save 1500 bucks. It'd give me time to bond with the 'clave, but that drive over would be a long one.
No way would the ad fee be $1500. $800-900 tops.
 

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loach said:
No way would the ad fee be $1500. $800-900 tops.
Don't ever pay an ad fee. It is BS. Every business advertises. It makes them money.

Next, they will sell you the Brooklyn Bridge.

TM
 

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Discussion Starter · #15 ·
Well see, when you say that, there's my problem. I refuse to pay for someone else to advertise to me. That's their cost to bear. But the fact is that I'm being told, and indications look that it's legit, that GM tacks on a certain amount of Regional/National advertising cost to the invoice cost. Thus, when I contact the dealer and we work things out, HIS invoice is different than the one I get from Consumer Reports or Edmunds. If it's really GM passing it on, which still sounds like GM passing the buck, it seems that I'm pretty much stuck paying it if I want an Enclave.
 

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Jimbobwae said:
Well see, when you say that, there's my problem. I refuse to pay for someone else to advertise to me. That's their cost to bear. But the fact is that I'm being told, and indications look that it's legit, that GM tacks on a certain amount of Regional/National advertising cost to the invoice cost. Thus, when I contact the dealer and we work things out, HIS invoice is different than the one I get from Consumer Reports or Edmund's. If it's really GM passing it on, which still sounds like GM passing the buck, it seems that I'm pretty much stuck paying it if I want an Enclave.
You're not stuck with paying anything. You can refuse and the dealer can decide if they want your business. Sometimes it takes some legwork, but I have found that the best dealers also tend to give you the best deals.

Reminds me of the guy at a Louisville dealership that quoted me $200/month more on a lease than I had calculated. He later said he added on $2000 worth of "extras" like paint sealant, interior protectant, and something else I forget. What a crock! I have been there and seen these people operate. It is a jungle out there, Jimbobwae!

TM
 

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Tin Man said:
You're not stuck with paying anything. You can refuse and the dealer can decide if they want your business. Sometimes it takes some legwork, but I have found that the best dealers also tend to give you the best deals.

Reminds me of the guy at a Louisville dealership that quoted me $200/month more on a lease than I had calculated. He later said he added on $2000 worth of "extras" like paint sealant, interior protectant, and something else I forget. What a crock! I have been there and seen these people operate. It is a jungle out there, Jimbobwae!

TM
TM,

That's called "packing" payments, and it's totally illegal here in Wisconsin. That guy is lucky he's still in business!
 

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Next time a dealer tells you they tack on a 2% advertising fee, tell them you are also charging them 2% advertising fee in return for the ugly dealer decal and license plate flame they send you on your way with.
 

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I have no idea why people get hung up on things like ad fees. You should focus on the overall price and whether it's competitive with other dealers. You are paying for advertising whether it appears as a line item or not. Just like you're paying for salaries, materials, overhead and everything else. Is the price of the vehicle competitive? Can you get a better deal somewhere else? If so, by all means take it. But don't walk away from a good deal because psycologically you don't want to pay for advertising.
 

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Discussion Starter · #20 ·
Well, the problem is we like the car, see the price, say it's worth it. We go through working the price down to where we want it (in our case right now we're at $500 over invoice), THEN we see their number and it doesn't match ours. :blob: WTF?! So we comb through it to find out that their invoice is different than ours because of an advertising fee. No, I don't like that. Now I was told 2.5% yesterday, although that sounds like more than what others are saying, and that's about $875 more. Someone is going to say "That's not that much, isn't the Enclave worth it?" I reply, "That's not the point, the question should be 'Isn't the 875 worth it?'" And the answer is NO! Advertising did NOT bring me in. I've been eyeballing the Enclave since very early in the 08 model year.

jr7243: I'm going to tell the dealer, whomever we buy from, when we order that if they put a sticker or decal or such with their name/logo/etc on the vehicle, I WILL NOT take delivery of the vehicle. If they want to put that on, we can negotiate an advertising fee for us.
 
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