What is the “Dealer Prep” fee?

I’m not sure if it’s because more people are shopping for vehicle online now with the pandemic or if people have finally started reading sales contracts. Either way, I am getting more inquiries as to what the “Dealer prep” fee is. Sometimes, dealer refer to this as the “Make Ready” fee, but it’s the same thing as Dealer Prep.

Basically, Dealer Prep is a fee dealerships charge to get the vehicle ready for sale. It is usually a percentage of the factory invoice. Sometimes the fee can range from several hundred dollars to several thousand dollars depending on what it includes. More expensive ones will include plastic coating on the exterior, or protective coating for the carpet and seats inside.

You should know though that manufacturers already pay dealers a fee to get the vehicles ready based on the manufacturer listed guidelines. Things that are essential to having the vehicle function such as fluid top ups for example, are paid for by the manufacturers. As such, the “dealer prep” fee is covering additional prep that you technically don’t need, depending on how you look at things. This makes the fee negotiable.