How To Buy A Car With No Credit Or Bad Credit

“Dealer Prep or Excessive Fee” Scam

A better definition here might be "Excessive Charge", since this is not really a fraud, nor is it illegal. Most dealers do adequately disclose this fee on their paperwork. Many dealers even admit that it’s a way for them to recover some of their "losses" when discounting the car off MSRP retail price.

However, this fee can be too excessive, and since it is printed permanently on their buyers form, what about the case when you pay full price on the car, and you have to pay $600 more in fees?

Salespeople try to convince you that a team of NASA experts performed a 3 day 15,000 point check of your car. Dealer prep "covers their cost" of removing plastic from the seats, vacuuming, adding fluids, and preparing it for sale. Total time: 2 hours max.

If a dealer charges a $600 dealer prep charge, you’re paying them $300 an hour to make your car ready to go!  Who in the world besides perhaps Bill Gates gets paid $300 and hour?

Don’t fall for this.  You see, the factory pays the dealer for pre-delivery service and it is already included in the MSRP.  This is just a way for dealers to get extra money out of you.

Often, this fee is permanently printed on the buyer's order form to make you think it's mandatory, but many people make the dealer remove it by adding a credit on the next line. So if you see a $600 dealer prep on the form, have them add a $600 credit.

If they won't budge you need to decide how bad you want that car. You should have no problem walking out of a dealer over a $600 fee. Go to the next dealer on your list, and tell them "Here's the deal. Drop the dealer prep, and the deal is yours". Remember, Dealer Prep is not illegal, but it gives you zero intrinsic value. Either you agree with the fee, or you don't.

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