Blog Post  President’s Day Weekend Car Shopping Tips

Annual President’s Day car sales are in full swing, and shoppers are expected to make big purchases. This holiday weekend consumers should prepare for high markups on vehicle prices due to inventory issues and chip shortages. Make sure to read the fine print while shopping auto deals this month and double check that your budget includes the fees within your sales agreement.

According to Edmunds the average price for a new car was almost $46,500 at the end of 2021—a 14% increase from the previous year.  Used car prices are also on the rise by nearly 30% with an average price of about $30,000.  On top of the price increases, in today’s market buyers are regularly paying above the vehicle sticker price. Auto dealers are legally increasing final sale prices through an additional dealer markup fee (ADM). This means the dealer is selling the car for more than its retail price. Ford and General Motors have both issued statements warning that dealers who artificially raise prices on their cars may bear repercussions.

Documentation fees, also known as doc fees, have also been inflated recently. Under Massachusetts law, there is no set cap limiting how high doc fees can be. These fees may be as low as $75 and as high as $1,000. Unlike ADM fees however, documentation fees are inevitable as they are set aside to pay office staff. Doc fees can differ from dealership to dealership, so call ahead to find which dealer may have the lowest fees.

However, documentation and ADM fees are not the only additional charges to be aware of. When heading to the dealership this month also keep in mind to look for the following three fees on your final transaction:

• Destination Fees which may be assessed to transport the car from manufacturer to dealer, usually indicated on the sticker. Shop around if you are being charged a destination fee since the amount can vary between dealers.
  • NOTE: You should not have to pay this fee on a used car.

• Floor Plan Fees which are often added to cars that have been on the dealer’s floor or within the inventory for more than 30 or 60 days. Buyers are not required to pay this fee passed on by the dealer, and you may ask that it is removed from your final sales agreement.

• Dealer Prep Fees might be added if the vehicle is being detailed or the gas tank filled. These services are perks offered by the dealer and you may decline the work/fee.

For more information on purchasing a vehicle in Massachusetts and the state’s Lemon Law visit the OCABR website at www.mass.gov/consumer.