What Type of Fees One Should Expect When Buying a Motorcycle From a Dealer
Before you set a budget for your new motorcycle, you need to factor in more than just the price tag. No matter where you buy your motorcycle from, there will be additional fees you need to account for.
For example, if you’re buying a motorcycle out of state, you’ll need to pay for shipping. If you purchase the bike from a private seller, you’ll need to meet a price that satisfies them. Their asking price can be influenced by a variety of factors like their sentimentality and the work they’ve put into the bike.
A dealership is no exception. If you choose to buy your motorcycle from a dealer, you will also rack up additional fees that are non-negotiable. These fees add up quickly but are mandatory if you want to legally ride off the lot with your new bike.
Profit and Commission
Like any business, the dealership needs to make a profit, which means they need to sell the motorcycle for more than they paid for it. This is known as a markup. Markups can vary depending on the dealership and the manufacturer.
A markup may seem unfair to you, but it is a common business practice and the only way for any business to be profitable.
If you want to avoid a markup, you can purchase a motorcycle second-hand from a private seller. You can find a wide range of used bikes in great condition online. But as we mentioned before, a private seller may have a hard time letting go and this will reflect in the price.
To get a motorcycle from the manufacturer to the dealership, the dealer is charged a freight fee. This fee is typically determined by the value of the motorcycle and the mileage from the warehouse.
For the dealership to cover that cost, they charge you for the freight fees. Once the dealer receives the bike, they must put it together, or at least get it ready to be sold. This is known as the set-up fee. These fees are also lumped in. Freight fees can cost an additional $300-$900.
While these fees are definitely justified, you will never know just how much the dealer actually had to pay. Some manufacturers disclose freight fees on their websites and marketing materials, but not everyone as they can be influenced by their relationship with the dealer and incentives.
The purchase of any kind of vehicle requires a title and registration. Being that you can’t leave the dealership without them, you’ll be charged processing fees. A title and registration are mandatory to secure your proof of ownership.
Document fees (or doc fees) vary depending on your city and state. When selling motorcycles in Texas, the dealer has to register the fee amount with the state. Other states, like California, have laws that limit the maximum amount dealerships charge for documentation fees. This fee can range anywhere from $100-$500.
No matter whether you make your purchase online, from a dealership, or from a private seller, you need to pay for registration. When you buy from the dealership, they collect slightly more money but save you the hassle of paying separately online or waiting in a long line at the DMV.
Sales tax is a given. Like registration fees, sales tax differs by state. Motorcycles are high ticket items, so account for a hefty amount of sales tax added to your bill.
How to Save
Every day a motorcycle sits on the showroom floor waiting to be purchased, it takes up space and burns money in the dealer’s pocket. From their perspective, the space can be used to sell newer models. So, if a bike has been sitting for a while, you can get it for a good deal. Don’t go in expecting to buy a 2023 Harley for a great deal. But you may be able to negotiate the price of an older model that will still be brand new to you.
The truth is that the dealer has the upper hand. It all depends on where their head is at. They may need to make room for an incoming shipment, they might be having a slow month, or they may offer a great deal to turn a quick profit.
But you can also put yourself at an advantage by doing your research. Look for the best deals and the best times to buy. Be prepared by setting an all-in budget that includes fees and saving towards that goal.
In terms of negotiating, don’t negotiate fees. Instead, negotiate an out-the-door price. While fees may not be negotiable, they may be able to knock off money from the cost of the bike to account for the fees.
Does this sound familiar to you? If you have additional advice for those purchasing from a dealer, leave a comment below!