When comparing prices you always want to get a total cost—that includes all tax and fees so you know exactly how much you are paying for your next car. But some dealers are employing a questionable tactic to make their out the door price cheaper than the competition.
I was recently shopping for a crossover that retailed for $29,125 in the Maryland area for a client who wasn’t sure whether or not they were going to lease or buy. The dealer sent me the lease quote and a total purchase price $24,998 which included all tax and fees. I was a bit surprised when this quote came in about $2,000 lower than all the other dealers in the region. That is when I requested a breakdown of that total number and got the following -
As you can see the “total price” assumes a $2,000 down payment; it also includes the $895 freight, also called destination fee, after the discounted price. Now the reason why some of the dealers are sending quotes this way is that there are numerous “car buying hacks” and advice columns that tell buyers to “focus on total cost” instead of payments.
While that advice is sound, it doesn’t paint the full picture. Because a customer that is just focused on the end total is going to be in for a shock when they go to the dealer and find out later that their quote assumed a downpayment and/or essentially paying twice for the destination fee which is already factored into the base MSRP.
This is why a buyer should always request “itemized” out the door quotes the detail all of the components of the sale including the MSRP, sale, price, taxes, fees, applicable rebates and so on. The itemization is key because sometimes the car with the higher total cost might be the better deal
For example, I ran some pricing on a Nissan Murano for a customer down in Texas. One quote was based on a car with an MSRP of $39,830 and a total price of $38,595 with tax and fees, but another dealer had a car with an MSRP of $40,860 but a total price of $38,795. While the second quote is a $200 more expensive as far as the total goes, the car in question is almost $1,000 more, which means it’s the more aggressive deal.
Shopping for the best deal can be time-consuming and sometimes getting straight answers from dealers can be a chore, but diligence and some basic math skills are key to knowing which deal is worth taking.