Car dealers are fond of their special dealer “Advertising Charge” added to your new car’s bottom line. It’s a great way for them to pull a few extra bucks from your wallet. But to us, it’s the dealership’s cost of doing business. Their cost of doing business, not ours.
The Advertising Charge was created to help dealers defray the manufacturer’s regional advertising buy-ins and promotions. Manufacturer-generated advertising is targeted at certain regions of the US. Beach scenes for coastal regions and snow scenes for the midwest are typical of regional commercials or advertising.
How much can an Advertising Charge be?
An Advertising Charge is usually between $250 and $1,000. But some manufacturers like Audi can see these fees hit close to $4,000. Sometimes it is listed as a “Sales Promotion Fund” or “DAA.” Or “ADA.” And if you’re buying a Ford product it is listed as “FDAF/LMDA.” An FDAF or LMDA charge stands for “Ford Dealers Advertising Fund.” And LMDA stands for Lincoln Mercury Dealer Advertising, even though the Mercury brand has been dead for years. Toyota’s is “TDA” for Toyota Dealer Advertising Fee.
Have you noticed all of the car insurance commercials running everywhere any night of the week? Well, guess what? If your insurance company is one that you see your monthly payments are paying for a small portion of that commercial. But there is no “Advertising Charge” to you. That cost is factored into everyone’s monthly rates.
The dealer’s Advertising Charge is a way to keep the price you pay for the vehicle artificially lower. You’ll end up paying more, but that extra isn’t baked into the car’s price. It is a separate line item. But you, the consumer, are still covering it. You’re not charged a separate fee for your tires being aired up at the factory? That is factored into the price you pay.
Do you have to pay the Advertising Charge?
Some dealers will waive the fee if pressed. However, most stand firm and won’t negotiate the number. But you should really be looking at the total cost you are paying rather than these extra fees. Negotiate that number down once all of the extra fees are determined. After all, that’s the ultimate goal; to get the vehicle for an overall lower price.
And don’t worry about the dealer’s advertising fee. After all, many dealers put their own sticker or chrome badge on your trunk. And most all take over your license plate with their dealer frames. You’re doing their advertising for free if you choose to keep their dealer bits scattered around your shiny new car. So think about that when all of the extra charges like “Documentation” and “Dealer Prep” gouge you for a few extra thousand dollars.