Recent Legislative Research Division Report Shows Alaska Dealers Pay No Extra Shipping
FOR IMMEDIATE RELEASE
November 20, 2017
Anchorage – Today, Representative Les Gara (D-Anchorage) issued the following alert to help consumers avoid unfair car dealer practices and negotiation strategies. Consumers should know the truth as they negotiate one of the largest purchases they will ever make. It is no secret that car dealers often use strategies to overcharge consumers for a new car.
“I was once told by a salesman that he tried to charge rural people more, wrongly assuming they could be taken advantage of more easily,” said Gara. “His offensive comment aside, it was a reminder that there are some salespeople who look for angles to take advantage of car buyers.”
Prior to serving in the legislature, Gara did consumer protection work as a Board Member at the Alaska Public Interest Research Group and learned about car pricing there.
“Many people find car shopping frustrating, with good reason,” said Gara. “Negotiations often involve strategies that include dealers mysteriously walking into back rooms, saying they can’t meet the consumer’s price offer, and then telling consumers they’ll have to talk to another salesperson who walks into a back room. The games can be frustrating. I don’t want consumers to pay more than they need to for a car.”
Arming Consumers With Information So They Can Secure a Fair Price
A recent Legislative Research Division Report commissioned by Rep. Gara proves what was already known in the consumer protection world: Alaska dealers are charged the same price for delivery to their dealership as every other dealer across the country, even dealers located a mile away from a manufacturing plant. Dealer shipping costs are exactly the same as for cars shipped to Lower 48 dealers, and so is the price of the car. “Consumers, armed with true information, are in a better place to protect themselves and negotiate a fair car price,” said Gara.
In addition, some Alaska dealers try to charge an “Additional Dealer Markup” above the already high “sticker price” represented by the “Manufacturers Suggested Retail Price,” (MSRP) the nationally uniform price that is posted on new cars at dealerships. Consumer advocates advise consumers to negotiate a price below MSRP when possible. Resources like Consumer Reports and NewCars.com offer buying strategies, information regarding the approximate price a dealer pays for a car, and what price might be fair for the type of car you are shopping for. See https://www.consumerreports.org/cro/car-prices-build-buy-service/index.htm?ep=C1 and http://www.newcars.com/news/get-the-best-deal-on-your-new-car for more information.
Finally, Gara notes that a common charge at some dealerships – called the “Doc Fee” – is not a government fee, and is just an extra charge those dealers create to add more profit. “If you can’t negotiate that away, then negotiate a lower price on the car,” said Gara. The Alaska Attorney General’s Office’s Unfair Trade Practices section has expressed concern about the charging of doc fees and has filed unsuccessful litigation trying to stop that particular dealer practice. Similarly, Gara has attempted legislation to limit the practice.
“Car dealers have a right to charge what they think is fair for a car. But consumers have an equal right to know the truth about car pricing, and to negotiate a fair price,” said Gara.
For more information, please contact Rep. Les Gara at (907) 250-0106 or Drew Cason at (907) 575-2068.
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