Why do dealers charge an administration fee?

Dealership Adminstration Fee

Let’s face it, nobody like paying fees, but it has become a part of life. Bank fees, service charges, activations fees, it is impossible to avoid them these days.
Car dealerships have them too. They usually range from $300 and go as high as $1000. Some dealers include items that add value and some do not. If you feel that an administration fee is unfair you are not alone but once explained, most people understand and accept them.
Car dealerships do not get rich on the sale of a vehicle. Profit margins are lower today than they were 30 years ago. In today’s competitive market it is not uncommon for a dealership to make $100 on the sale of a vehicle. That’s right, $100 on the sale of a $30,000 vehicle.
So here’s the thing. Years ago there was no administration fee and profits were huge and today you have low profits and a small fee to pay. In the long run the consumer is way better off today. So when you purchase your next vehicle, pay it and feel good knowing that you got a great deal.

 

Patrick Britton – Guest Blogger

 

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