Admin Fees - What's in it for the garage?

[Cheekster247]

Apart from the obvious (stinging an unsuspecting punter), what's in it for the garage?

I ask as I bought a new (to me) motor today. Agreed to pay £5k last week and paid the balance off today. When I got home I noticed the invoice states the price of the car was £4,850 and there was a £150 admin fee listed.

I'm not in the slightest bit bothered as i've paid what we agreed, but why would they do it this way...some sort of tax implications possibly?

Not the biggest issue ever but I'm simply curious.

[devnull]

Pure easy money, thats what it is. A lot of places will back down if you complain hard enough. £150 implies a days wages for an individual, there is not £150 work of labour involved in processing a deal.

[swisstoni]

A flounce off, in my case.

[Cheekster247]

I get that and that's always been my attitude to but what I don't understand is this..
Car is up for sale for £5,500
We agree a price of £5,000
The invoice says £4,850 plus an admin fee of £150....what's the point?

I suspect its going to be a case of don't worry and just move on

[hothatch1.6]

I had this recently. Agreed small discount on the car I was buying. The invoice states lower sale price plus added admin fee (total = the price we agreed) - perhaps its a retailer thing and their management have to see they are charging it?

[Nickp82]

I don't know for sure but possibly a wily sales person who knows they have to show the admin fee as being charged so probably told the sales manager they could do a deal at £4850.

[barryrs]

I assumed the admin fee was the salesman’s commission as the margins are tighter on the cars.

[Rozzers]

Last car I bought was a year old typical ex rental thing, 4 different places had basically the same cars in stock at the same price, I assume from the same manufacturer stock.

I bought from the one with this £200 admin tax, they even took a slice off and filled the tank, of the other two, one had a mandatory charge for a tank of gas whether you wanted it or not, the other charged for the PDI and valet.

[Mojooo]

The admin fee includes stuff that you would normally expect to be part of the cost of selling a car

Often admin fees are not included in adverts in the headline price - so its basically to make a car look cheaper than it is. You can put a car down for 9999 on auto trader when its in fact 9999 plus admin fee.

[Swoxy]

To reduce the margin under VAT Notice 718/1.

[grumpynuts]

Refuse to pay it, it's a very old school motor trade ploy of getting more profit from customers.

[Sheepshanks]

Cheekster247 said:

I get that and that's always been my attitude to but what I don't understand is this..
Car is up for sale for £5,500
We agree a price of £5,000
The invoice says £4,850 plus an admin fee of £150....what's the point?

I suspect its going to be a case of don't worry and just move on

I had a similar thing many years buying a nearly new Merc. Agreed a price of £23,500 on a car they'd had up for £26,995 and I still think it's one of the best car deals I've ever had.

On presenting the sales doc to sign it was £23250 for the car plus £250 for StarGuard (MB paint protection). I had to sign the StarGuard docs. I refused, and pushed it to the point where I seriously think they were going to let me walk away. They had the advantage of seeing my company lease car being collected by a driver!

So in the end I signed, then claimed it'd been missold. Got absolutuely nowhere.

[barryrs]

Why would you kick off over that?

Salesmen will regularly throw starguard or gap into an agreed deal at no additional charge as they get bonuses come the end of the month.

You were happy with the deal so starguard was effectively a freebie.

[Sheepshanks]

barryrs said:

Why would you kick off over that?

Salesmen will regularly throw starguard or gap into an agreed deal at no additional charge as they get bonuses come the end of the month.

You were happy with the deal so starguard was effectively a freebie.

I suppose a mixture of things - I didn't like the way it was sprung on me. The product has no value to me - I'm sure it wasn't actually done anyway. I saw an opportunuty to get the car for £250 less.


I did agree to it on the last new car I got for my wife as the salesguy told me it was important to him and he'd lose the cost in the deal.

[Pica-Pica]

Swoxy said:

To reduce the margin under VAT Notice 718/1.

This.

[Mojooo]

Pica-Pica said:

Swoxy said:

To reduce the margin under VAT Notice 718/1.

This.

What part of that specifically applies?

[Sc0tchland]

Mojooo said:

Pica-Pica said:

Swoxy said:

To reduce the margin under VAT Notice 718/1.

This.

What part of that specifically applies?

To my knowledge by reading the information available, it appears to reduce the amount of money to the taxman that the dealers pay on the sale of a vehicle, as it looks like the £150 as an example is deducted.

[Mojooo]

Sc0tchland said:

To my knowledge by reading the information available, it appears to reduce the amount of money to the taxman that the dealers pay on the sale of a vehicle, as it looks like the £150 as an example is deducted.

Yes but the consumer still pays the advertised price plus admin fee - so that must be the definition of the sale price - i.e the total amount recd from the consumer.

[DoubleD]

grumpynuts said:

Refuse to pay it, it's a very old school motor trade ploy of getting more profit from customers.

Is it? Would you rather they hid it in the overall cost of what they are charging? If its a good price including the admin fee then why would you care? All dealers have admin fees, but some seem to add them as an extra. It tells you on Autotrader now, so its not hidden.