When Does a Dealer Prep Fee Become a Scam?

What is a Car Dealer Prep Fee?

A dealer prep fee is an excessive fee charged by car dealers for making the new vehicle prepped for sale. When a new vehicle arrives from the manufacturer, there are a number of procedures to be undertaken by a dealership to have the car ready for sale. The dealer is to remove the protective coating that covers inside and outside of the vehicle, install fuses, check the fluids, wash, wax, vacuum, etc. As usual, the dealers claim that it takes enormous effort to prepare a new car for sale once it is delivered to the dealership. The reality is a bit different. The total time spent on a preparation process in up to two or three hours. The same is true for used cars. What’s more, most manufacturers compensate dealers for the service. Yet, shrew dealers never miss the opportunity of defrauding you out of your hard-earned money. This trick allows a dealer charge extra money from consumers, ranging from $500 – $2000.

When a Dealer Prep Fee Becomes a Scam

Dealer prep fee is not a fraudulent act or illegal practice. It is not illegal as long as the dealer discloses the prep fee on the purchase agreement. It only becomes a scam when a dealer excessively marks up the fee over the cost.

Many dealers claim that this is just a way to recover their losses when they discount the car off MSRP retail price. However, if you inspect the MSRP sticker, you will most likely find the manufacturer’s statement on dealer prep fee verifying it includes manufacturer’s recommended re-delivery service. Thus, if the fee is already built into the vehicle’s price from the manufacturer, why to pay it again to the dealer?

If you don’t want to pay for a prep fee you can simply refuse to pay it. Usually, dealers will print the dealer prep fee on the buyer’s order. This is done with the aim to make you believe it is a mandatory payment. Know that you can have the dealer remove it by asking his/her credit it on the next line. If the dealer refuses to remove it, you can always opt out for another dealership.

In general, if you recently bought a car and suspect any wrongdoing by the dealership, chances are high you have become a victim of car dealer fraud. The skillful and knowledgeable attorneys at the Margarian Law Firm are eager to help you with dealer fraud issues and get the compensation for damages you suffered in the result of shrewd dealers’ fraudulent acts.