Help! Please Share Your Input on Auto Dealer Advertising Assessments

Ford Explorer price msrp destinationOn June 17th, I tweeted and posted I’m Buying a 2011 Ford Explorer in Madison, WI. Who Wants my Business?.

I’ve reached an agreed price on a 2012 Ford Explorer, but with a dealer about an hour away from Madison, WI. It’s a great story, and I really want to tell the world, but I have one small problem and…

I need your input

Anyone who’s bought a new vehicle from a dealer knows there are some charges that are unavoidable, such as tax, title and license fees. In addition, you will always pay a destination charge, which is the amount auto manufacturers charge dealerships to deliver a vehicle from the factory to the showroom.

The destination charge is right there on the window sticker, and as you can see in the image above, it is also shown on the manufacturer’s website.

Here’s the problem

After reaching an agreed price for the vehicle and options, which I knew would would have the destination charge and tax, title and license fees added to it, the salesman emailed me the build sheet. After a close inspection, I found two additional charges:

  • Fuel Charge – $67.07
  • Adv Assessment $546.00

When I asked about these charges, I was told:

These are charges that come from Ford which are billed directly to the dealership for the vehicle. The Fuel Charge is the fuel that is put into the vehicle at the factory and allocated to each car. Advertising Assessments are the national advertising dollars allocated to each vehicle from Ford.

What really bugs me is that the last four vehicles I’ve bought have all been brand new (two Fords, a Honda, and a Nissan), and none required me to pay an advertising fee. In addition, Ford’s own website didn’t list this fee, and it doesn’t appear on the window sticker.

I was a little bitter about the surprise charges, and tweeted this on June 27th:

They told me the charge was not negotiable, so I agreed to it and placed the order for the vehicle. However, I’m not finished with my beef over the Adv Assessment.

Time for your input

I look at it this way. If the dealership is going include a line item to charge me $546 for advertising, I don’t think they should benefit from any “advertising” I might do on their behalf. For example, I’m considering the following:

  • No specific mention of the dealership in any of my blog posts or tweets
  • Block blog comments from readers mentioning the dealership
  • Delete past tweets where I mentioned the dealership
  • No free advertising: no dealership decals, license plate brackets, etc on the vehicle

Is this a reasonable position for me to take?

Is there a better way to handle the situation that could work to our mutual benefit?

What would you do?

Edited to add: I’d like to clarify that the salesman I worked with was nothing but professional and transparent. He’s new to the sales position, and was just the messenger regarding the Adv Assessment. I don’t blame him in any way for the timing of revealing it to me. I have no doubt that he was just following the guidance of his GM and the usual workflow of the dealership. He’s a great communicator and I’d recommend him to anyone who asks.

Comments

  1. Gary says

    When I buy from Wal-Mart, McDonalds or Lowes there is no Advertising fee’s. That’s like adding the electric bill or new she’s on to the car price. It’s business, Bull Sh*t. You can add it, but I want a exact line item deduction from the price of the car or add it onto the trade-in price.

  2. Laura McConnell says

    I know that this was posted a while back, but I actually work for a Ford dealership. Be very wary of this dealership that you are talking about. At my dealership there is no such charges, which makes it sound to me like the dealership added these fees, NOT Ford! At my dealership, we break everything down line by line so that you know what you are paying for (x amount for the car, y amount for the tax, z amount for the tags, etc..), but I have never seen anything like these fees before. It is the companys responsibility to pay for their advertising, not the consumers.

  3. Schoro says

    As a Realtor for many years , we as Realtors have to disclose up front to our buyers how much renumeration we make (law of agency) and on the contract what fees the buyer has to pay to buy a house, the car dealers should be required to disclose up front at the very least, all fees in the transaction and have them listed on a separate disclosure form to be presented to buyer to sign , and this should be done before signing any contract to purchase a vehicle. Thats the honest way to do things.. and if the buyer does not sign the disclosure form, the dealer cannot proceed with the sale… simple…IN my opinion, the car dealers are in direct violation of the Law of Agency which includes all transaction where there is a client relationship present. The government should be forcing the car dealers to comply, the government is not protecting the public in this sector, they force the Realtors to do this, it should be the same for car dealers, after all purchasing a home is the biggest investment of most peoples lives, purchasing a car is second…

  4. JJ _ says

    2 separate Des Moines area dealers are attempting to pull this same trick on me right now yet other dealers don’t mention it so adding it after the fact is bogus. The problem is that invoice prices are now well known and they are true. The only $ dealers make that any average Joe knows about is holdback which in the case of Ford is 3% of total MSRP (with options added in). So they’ve started this “advertising fee” BS as a means to bring back the old days of an uneducated consumer. Sad, very sad. It’s bogus as an additional fee. If a dealer of any manufacturer charges an advertising fee, it should be under $100 in my experience and even that’s a gift. But it’s a manageable gift. This is robbery at it’s finest and is the latest trend in dealer trickery. How they sleep at night I’ll never understand.

  5. John says

    I would never pay ANY dealer advertising fees. Why should I? It’s the dealer’s business. Let him advertise it.

  6. Laurel says

    ALL businesses include expenses in their markups, or they wouldn’t be in business long. They’re just not usually this conspicuous. Usually they’ll be buried in some other fee or are part of the overall margin. I suspect that the “new” salesguy was anxious for the sale and didn’t want to inflate any of the other charges (so his price would look lower), so he thought he was being more “transparent” by itemizing those charges separately. As you can see, he didn’t do anybody any favors. Paying directly for a company’s advertizing is shocking and sure to get noticed – and not in a good way either. If this is dealership policy, they certainly should be encourage to re-think this. You could be instrumental in that by showing them your blog.

  7. Matt Wheeler says

    I think there are a few issues here, personally I would mention the dealership in your posts and reviews and let them get the benefit of the advertising. “At the end of the day” they provided a service other dealerships couldn’t and deserve credit for that.

    I would also however mention the detail about the advertising fee and give Ford the negative publicity that goes with it. Though you could argue you’ve already done this :)

    If I was Ford, I’d charge everything and break the price down into a tree diagram of everything that is rolled into the 1 window price if they really want to provide ‘transparency’. If they just want to push the price up after hooking a customer then they can continue doing what they do …

    • Lyle says

      The problem is always in the details. If you asked for bottom line out the door pricing they are wrong. If you asked for the price on the car and options only, you made a mistake. In any sales situation a certain level of trust is needed. When you ask for a price and use that as your only criteria for making the purchase you must educate yourself to the level so that you know what you are asking for. Most prducts have a level of service and quality that is priced into the product. It is up to the consumer to ask himself if he is williing to pay for that service or quality.
      My suugestions is that this was an interesting project to let people know of the options and pitfalls when purchsing a car. As long as everyone is aware of what you post and why and the information is accurate you would be wrong to delete any possible negative information.
            

      • says

        Thanks for you input, Lyle. I have no intention of editing my post or deleting any comments. The mistake I made was negotiating on the word “invoice” rather than on actual dollar figures.

  8. Rick Sturm says

    They’ve “always” done things like this.  The one that I find most outrageous is a fee for “additional dealer profit”.  When I see that, I know that it’s time to leave because it’s an old school, high pressure, low ethics dealership.

    It reminds me of the airlines.  They think that they are being really clever by adding more and more fees.  They need to wake up and realize that they aren’t fooling anyone.  Instead, they are just annoying (and driving away) their customers.  

    In the long run, local dealerships add very little value to the transaction.  In the long run, the manufacturers will be able to eliminate dealerships almost entirely, much like the airline industry squeezed out the travel agents.

    • says

      I have to disagree with your sentiment about local dealerships. I think they add tremendous value. Without them, where would you test drive a vehicle? Where would you have warranty work done after the sale? 

    • Craig from Wisconsin says

      My family has owned car dealerships for almost 60 years and we’ve owned a Ford store in Wisconsin for 4 years.  It makes me sad to hear that you’ve had bad experiences in the past.  Obviously, there are some businesses that will try to take advantage of a trusting customer, but for the most part, car dealerships are honest businesses.  We support community events and charities and are large employers in our towns.  We live in the same communities of the people that we sell cars to, and take pride in the fact that they wear our sticker on their cars.  Of course, we can’t help but come to a difference in opinion from time to time that can’t be remedied, but those are uncommon occurrences.

      Collin, I just stumbled across this on the web.  Thanks for your thought provoking conversation.  I can tell you that dealerships are charged this expense before they reach their final invoice price.  Ford dealerships only make the money they charge above invoice plus what they have on each invoices holdback.  For example, a $25,000 Fusion would have approximately $725 in holdback.  Therefore, if we sell the car for $300 above invoice (A common occurrence) we would make $1025.  That’s the hard truth.  Dealerships, by state law, can charge a documentation (or service) fee.  At our store, we charge $99.  With all the records we have to maintain and all the legal requirements for us to follow on each deal, I feel that is a very fair number.  If you’d like it lowered, then citizens need to band together to have the law changed or to have the legal process of buying a car simplified.  (Not very likely.) Thanks again.  I’ve enjoyed reading this conversation.

  9. Rob Cuesta says

    Interesting that everyone is screaming at the dealer. If the charge is being passed on by Ford I’d be happy to have the dealership’s name on the plate or window decals or whatever. However I’d insist they remove the Ford name and badge ;) alternatively keep the badges and send Ford an invoice for advertising :)

    • says

      Interesting perspective, Rob. I think it all comes down to a business practice at both the dealer and manufacturer levels where they are itemizing an advertising fee that should just be included in the invoice price. I’ve done enough research to know that I’m not the only buyer who’s been bothered by this practice. Like I said in my tweet… what’s next? The phone bill? Will they start charging the buyer for the salesman’s time?

  10. says

    Colin may i ask you, did they add this two charges on the top of 44.469 or they were just build in ? Now as far as fuel price goes, if you are picking up the car from dealership then they can’t charge you for it. What your dealership is doing and is wrong, they are charging you for the things that Ford charge them and this should not be the case, as you did not sign the contract with Ford but with them. And UCC state that all cost should be disclosed in offer from seller before contract goes to binding.  
    You have here two options now:1. if they add the charges on the top of 44469 then they breach the contract and every court will tell them so and you don’t need to pay it if you dont agree! Only initial offer is valid once accepted. In legal world goes like this -offer – acceptance – consideration – contract. So what they did they offer, you accepted, contract was formated and then they breach the contract.  2. you might contact the Ford and tell them that they are doing false advertising themselves as client or potential buyer should be advice before accepting the offer with all details. In any case this contract might be violable by default, as the dealership break it with adding – increasing the price, which makes contrat void if you dont agree with the price. 
    What they did is part of fales advertisement and they might get big fines for it! 

    • says

      Jure – No, the charges were NOT added on top of the $44,469. I did not start at MSRP and negotiate my way down, but rather I started at invoice and negotiated my way up.

      What I’m finding out is that dealers handle the Adv Assessment differently depending on whether they are negotiating from MSRP or invoice. As I understand it, they consider it as included in MSRP, but they don’t consider it included in invoice, at least not the invoice price that is published on all the various websites that buyers use.

      I didn’t pay the deposit or sign the contract until AFTER the Adv Assessment was revealed and discussed, and I agreed to pay it. I can live with that.

      The point of this post is to get some input from my readers about whether, in exchange for charging me a $546 advertising fee, I should withhold the name of the dealer and refuse to let them advertise on my new vehicle.

      • says

        Hi Collin and thanks for referring me to your blog. I work for a non-Ford dealer in Madison, WI. All manufacturers have an advertising fee and the fuel surcharge built into the invoice price of the vehicle. When we quote an invoice price, we quote it with these charges included as the actual invoice of the vehicle. After all, it is what the dealers pay the manufacturer for the it. Not being privy to the actual details of the transaction, it seems to me that they may have backed those charges out of their quote to hook you with a low ‘invoice’ cost and then added it back in. The advertising fee is for the manufacturers regional and national ad campaigns, not specifically for the dealer that a buyer chooses to purchase from. Maybe Ford handles their charges differently, but our manufacturer has those charges listed on the invoice. Also, the advertising fee varies for different parts of the country depending on the advertising buys the manufacturer makes in that particular region to promote their brand. I have heard of dealers doing this which, if they do, it gives us all a bad name.

  11. Thom Pastor says

    Only truly exceptional businesses deserve the customer “advertising” for them. After you’ve paid for the service and product, you don’t need to do anything for them. 
    If they are a smart business they will work to solve this problem for the future. I highly doubt you are the first person to be frustrated with this.

    You are doing the right thing by not “advertising.” You are helping raise the bar on customer service; either by helping them realize the error, or by natural selection.

  12. says

    Hi Collin. It’s a bit of an awkward situation I’m in here. You don’t mention the dealership, so we have no way of following up with them, yet all of your negotiations and conversations were with them. Because we don’t own or control any of our dealerships (they’re all independently owned and operated), it’s s little hard to connect the dots.

    What I think would be completely fair would be to let the dealership know that you’ve written this post and what your take on it is. If I were a small business owner and someone were dissatisfied with how they were treated at my business, I’d want to know. But as of now, you’ve made it difficult for them to know they’re being discussed.

    That being said, it sounds to me like your concern is more one of how the fee was charged rather than that it was charged at all. I believe it’s usually included in the sticker price as the overall cost of the vehicle. In this case, it looks like the dealer chose to be more transparent about it, albeit late in the process. I would hope you give them the benefit of a public response, since you’ve taken them to task publicly (even if you want to keep their dealership name anonymous.

    Scott Monty
    Global Digital Communications
    Ford Motor Company

    • says

      Thanks for stopping by again, Scott. I’ve actually been communicating with the salesman tonight via Twitter DM about this post.

      He’s been very professional and transparent. He’s new to the sales position, and was just the messenger regarding the Adv Assessment. I don’t blame him in any way for the timing of revealing it to me. I have no doubt that he was just following the guidance of his GM and the usual workflow of the dealership. He’s a great communicator and I’d recommend him to anyone who asks.

      Everything about the process with the dealer has been positive. The Adv Assessment, though, came as a very big surprise, and I would have walked away from the deal if I hadn’t been convinced that it was not negotiable.

      I have a very positive story to tell that will certainly lead to referrals, both from me directly and possibly as a result of a series of blog posts. My dilemma is that I’ll basically be advertising for the dealership by posting about them. They deserve it, but the $546 advertising charge has caused me to re-think my approach to providing free advertising and referrals.

      On the plus side, I’ve invited the salesman to come to Madison to meet you when you come to speak at Social Media Breakfast.

  13. Anonymous says

    I like the idea of continuing the social experiment with this – but instead of deleting/refusing to mention the dealership, I’d continue to talk about them naturally, review the dealership and the car, then send them a bill for advertising fees. That way the story has humor, and a fair-is-fair approach, and it might get some traction. 

    I just can’t wrap my mind around paying a specific surcharge for advertising that might or might not have attracted me to a potential purchase.  It could be fun to explore how that would work in other product lines, too!

  14. says

    From what I’ve learned, it’s a legit charge that Ford passes along to the dealer. The problem is that it wasn’t included in the price until AFTER I agreed on a price. Then they added it on and told me it was not negotiable. I’m still happy with the price I got, but this practice has to stop, and I’m going to be the one to make that happen. 

  15. Wendykf06 says

    I would walk away. I believe that falls under consumer fraud to not have the additional charges discussed up front. Especially since they KNEW about the charges.

  16. Kathy Morlock says

    I would walk away from the deal and see how fast they “take the charges away” in the form of extras added to vehicle, or price deleted for an option that is now free.  I would tell them that’s the only way I’m buying the vehicle.  There are millions of cares and dealerships out there.  Is this a standard practice?  I’ve never heard of it.

    • says

      Unfortunately, it’s too late to walk away. I placed the order a few weeks ago and they have my down payment and a signed contract. When I agreed to the Adv Assessment, I did it based on their assertion that it was not negotiable. I still tried, but failed, which is why I’m considering “punishing” them by not allowing them to advertise on the new car and by not mentioning them by name in a story that should be very positive for them.

  17. Jeff Broman says

    I have worked with dealers (not for them) for a long time and have never heard of an advertising fee.  Many dealers charge a Documentation/DOC fee if it is allowed by the state that can range from $200- $900.  This fee is pure profit but they get away with it because they charge it to everyone.  This Advertising Assessment sounds like a Dealer add on fee and does not come from the manufacturer.

    • says

      It appears that the Adv Assessment does, in fact, come from @Ford. I’d love @ScottMonty:twitter ‘s thoughts about it.

  18. Luke Allen McManamon says

    I would have walked unless they cut another $616 from the price. Arguably, I would have walked if they did not take the destination charge off the table also. Those charges should have been part of the social media experiment, to see if online price efficiencies could come from online auto sales. Those charges are also why I refuse to buy a new car. I am not responsible for your advertising and delivery architecture. 

    • says

      I really believe I got the best possible price on the vehicle that I could possibly get, even with the Adv Assessment. I just wish they had wrapped that fee into the price and been up-front about it rather springing it on me after we’d already agreed on a price.

  19. says

    All these charges (including destination charge) are BS and negotiable. Be willing to walk away and let them know that you are, see what they do. 

    P.S. Dealer Kickback is how dealerships make money…it’s not by selling cars. 

    • says

      Maybe I’m a fool for believing that it wasn’t negotiable. Unfortunately, I’ve already paid a down payment, and they start building the vehicle in 1 week, so it’s too late to walk away!

  20. says

    Fascinating! I am amazed that they are brave enough to charge and advertising fee. I mean, we all expect fees, but at least call it something else. I would have had a tough time paying that, but I think your response is completely fair. I would have liked to see what would have happened if you put some social media pressure on them. Would they have responded? 

    • says

      I thought the tweet that I included in the post might help put a little pressure on them, but it didn’t work. They were adamant that it’s not an optional or negotiable charge.

  21. San says

    It seems bogus. I can’t believe that Ford would charge the customer SO directly for the advertisement (we all know that adv is indirectly charged but I have never hear this before). Another option is that Ford asks dealer for an X amount (that they call Adv Assessment) and that is supposed to be included in the price but they decided to get it out to give you “a better deal”. Now, if this fee IS true, I’m not sure that the dealer is to blame, but Ford. So I would just NOT buy a Ford again… 

    • says

      I think you’re onto something with the theory that it is supposed to be included in the price, but that it was left out to give me the perception of a better deal. 

  22. Anonymous says

    I’m guessing the advertising fee is a) new (you haven’t run into it before); and b) systemic (it is a Ford corporate thing that all dealerships have to recover from the buyer). I also think it’s unprofessional verging on unethical not to mention the charge until you thought you were finished with the negotiations. This smacks of what the airlines are doing (fifty cents to use the onboard bathroom is coming people, just wait for it).

    IMHO, there are two things to be done moving forward. First, ask yourself what will make you happy and comfortable in your new car? Will leaving the dealership name on the vehicle, OR not advertising the dealership, fundamentally improve the way you feel about the vehicle when you get in it? The last thing you want is to have even the slightest twinge of bad feelings when you whiff that new car smell. So I think you should do whatever will make you feel good about this transaction (short term) and the new vehicle (long term).

    Second, as I suggested earlier, if this is a systemic Ford issue, throwing this charge on top of the sticker price is unprofessional verging on unethical. We don’t pay a separate advertising fee for breakfast cereal, why should an expensive car be any different? But to create change you must take it to the top. Use your klout, your Twitter network, your Ford contacts (local and national), and create a surge of interest and even backlash to this outrageous business practice and demand that Ford stop it in the name of price transparency.

    Use your power for good, Collin, and you could change the world (for new Ford car buyers at least).

    • says

      Wow, Josh. Thanks for the incredibly thoughtful answer. You’ve given me a lot to think about as I move forward with my purchase and the story I want to tell about it.

  23. says

    How frustrating. I might consider calling another Ford dealership and confirming this advertising fee isn’t bogus. Oh, the fun that could be had if it is bogus.

    But assuming it’s legit, I would create some sort of disclaimer for each time you mention their name in a post. Let people know that this specific dealership has some issues with transparency and future customers should be aware. 

    Ford should take their $546 a car and use it to support and position dealerships in their local community. Scale back their national initiatives and move toward a community driven approach. 

    • says

      I actually confirmed with another dealership, with Ford customer service, and with the members of a couple of online forums that the charge is legit. The dealership came off as very transparent in all our dealings up to the point when I discovered this additional charge on the build sheet. 

  24. says

    That’s an interesting take on handing your own PR toward the car dealership. I can see how that may sour the transaction. I wouldn’t go so far as to delete past tweets about them. I would continue to list the dealership but not in a prominent way at most.

    Maybe you could turn the tables and ask if you can get referral kick-backs for anyone you send in from your social media “advertising”.

    Your goal was to purchase a car online and through social media. You achieved that. You didn’t need to buy the car from them if you didn’t agree with their charges. That was entirely your decision.

    In the end you need to ask yourself, are you writing this story for you
    and your readers or were you writing this for the car dealership to gain
    business?

    • says

      The idea of “referral kick-backs” is interesting, but once I put their name in a blog post, I really lose the ability to track it. 

      Yes, it was my decision to pay the Adv Assessment. I challenged it in every way possible, but was convinced that it was not negotiable and would be a deal-breaker if I chose not to pay it.

  25. says

    Unless there is a legal reason to explicitly list the fee, why don’t they just roll it into the price? I think we all understand that we pay for everything that goes into the creation of a product, including the advertising. However, to tell people how much it costs to market their product seems weird.

    To answer your question, I wouldn’t give the dealership any level of passive marketing: no word of mouth, no license plate holders, no stickers. You’ve clearly paid your advertising dues (it’s right there on the sticker!), so no need to do any more.

    • says

      My sentiments exactly. This is precisely why auto dealerships get a bad rap. Fine print that isn’t quite fine enough – and could sour the deal. I don’t understand not rolling it into the price either.

      Everything’s negotiable in today’s economy. 

    • says

      I agree that they should just roll it into the price. I can’t think of any good reason to separate out the Adv Assessment from the price other than to mislead savvy consumers who are aware of the dealer’s invoice price from the manufacturer.

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