Documentation Fees

cotmc

I have not seen any list. However, I believe you are correct about California dealers being regulated to a $45 doc fee. Unfortunately, in Arizona and Nevada, it's "wide open". The car dealers seem to be able to charge whatever the market will bear. We have a United Auto dealership group here in Scottsdale, AZ, now charging $398!

wilkens11

I guess I can understand a dealership, being confronted with an "X over invoice" customer, itemizing their costs and fees.

But if I pay MSRP, the doc fee is still there, to be paid in addition to the full retail price. I think they even charge California sales tax on the doc fee. My attitute is, either it's MSRP or it isn't. I don't mind sales tax, license, and registration fees. Those fees are clearly marked as fees paid to public officials. Doc fees are not.

What bothers me most about this is this pattern at some dealerships of finding what price you'll accept, and then raising it. My attitude is, We already agreed on the price. Making it a "fee" doesn't change anything as far as I'm concerned, it's just money. Decide on a number and tell me the number; this isn't rocket science.

Many people have said that negotiating OTD is the surest way to get around this nonsense; and I agree with that. Still bugs me though.

bobst

Why do dealers' tactics bother you, wilkens? As long as you know in advance what they will do, then you can develop a plan to counteract it. No problem.

Having a new car is wonderful, and, if we know what we are doing, we can thoroughly enjoy the car-buying experience.

wilkens11

Hi Bobst, great to see you here! Your sound advice must have helped a lot of people by now.

I think you're right. As long as one knows what a dealer's going to do, with a little planning one can stay focused on the bottom line. Assuming the dealer is willing to play ball, it will usually work out fine one way (walk) or another (buy). It does require a little care:

Salesperson: "the price of the car is $4000"
Buyer (thinking he can nail this down): "is that the total price?"
Salesperson: "Yes"
Buyer: "Sounds good"
Salesperson: "There'll be a $400 PDI charge"
Buyer: "I thought you said there were no add'l fees"
Salesperson: "It's a charge, sir---oh and you'll just have to buy this $2000 accessory"
Buyer: (walks)

I think what bothers me is the self-destructiveness in this kind of behavior. I mean in the end it's true you can stand there in the dealership and write up a contract around a good-faith deposit, defining what "price" means, and what "dollar" means, so that nothing possibly could go wrong. I might as well ask for a receipt every time I handed someone my credit card, just in case they ran off with it. A little trust can really help, here. Wouldn't it be easier if MSRP just meant MSRP? Or, to put it concretely, $4000 meant $4000? We all know what license, registration and sales tax is. Isn't the rest just the price of the car?

The good salespeople already know that playing around isn't a good idea, and they don't play these games. Their customers just wouldn't allow it. So, these salespeople are up front about the breakdown, just to make sure everyone's on the same page. This works well when the options haven't been decided yet.

atlgaxt

Thinking you have negotiated and reached an agreement only to have a big "doc fee" thrown in at the end is the kind of thing that really leaves a bad taste in a persons mouth and adds to the sleazy reputation of the car business. Its just a tactic to milk a few extra dollars out of the dealership's prey.

Not having bought a lot of cars, I forgot about doc fees and got hit with this the last time I purchased a car. Sure, the customer can always walk out, but walking out means you have to start the whole painful process somewhere else - like stopping midway through a root canal because you decided to change dentists. Continuing the negotiations after you think you have struck a deal is not a pleasant experience. Next time I go shopping I will be a lot more cynical about the process, wondering how the dealership will try to stick it to me this time.

driftracer

instead of playing like a scared sheep, say "I want to pay $xx,xxx for that Firebeast "OUT THE DOOR, ALL FEES INCLUDED, NO SURPRISES, OR I WALK".

If they meet your price, great; if not, and their return price works for you, great. Let me assure you that it's a stupid salesperson who would not disclose everything knowing that you're walking when some weird number gets added onto the pile.

Jeez, you guys make this hard!

dbgindy

Great post!OTD is OTD period.

Duncan

driftracer

People have a way of doing research, then forgetting important wording in their statements, setting themselves up for failure, then crying about it afterwards - I simply choose not to let that happen.

Consumers buy cars every three years, on average - you have to treat buying a car like buying a house - in buying a house, you'd want all the details explained out to you and everything documented - why wouldn't a $20/30/40k car purchase be any different? WE'RE NOT TALKING ABOUT BUYING A $30 PAIR OF JEANS HERE!!

Look at it like this - if someone asks for the "best price on the car", and THEY GET IT AND AGREE TO IT, and the state allows dealerships to have a doc fee, and that store does, why should it be any surprise that the F&I guy tacks it on?

He's doing exactly what he's supposed to do in his job description and what the state allows - just because you weren't astute enough to ask about fees doesn't give you the right to whine or cry about it....

beachfish

How can a retailer, auto or otherwise, develop good will and repeat business? An earlier post mentioned padded mail order fees for shipping & handling as an example of how not to do it.

Earlier this year I bought a Cooper Arms .22 bolt action rifle as a gift for my father. Note that this is legal in VA as in many other states. I got it from a well known gun store in KY by the name of Whittaker's. They charged me exactly $12 for shipping and insurance on a $1600 rifle. Less expensive guns are only $10. That's how you build customer loyalty. Compare this method of customer service with the bogus doc fees so commonly seen at car dealers.

John

driftracer

are bogus - doc fees, depending on how the state allows these fees, offset costs on the part of the dealer to do your administrative work -

There are some dealerships, though, that push the envelope, and that's wrong.

There are two ways to handle it - ask up front when you call or visit to look at the vehicle you're interested in - just ask, it's that simple. If you don't like the answer, don't buy there, and you've only wasted 30 seconds of your time.

The second is to not worry if they want to charge you an $1800 car wash fee - if the price makes you happy, and is less than the dealer across the street, who cares how they arrive at their numbers?

dbgindy

Drift's last sentence is exactly on point. Let's do an example.
 Car XXX is selling for MSRP for $30,000. Dealer A is selling it for $500 under invoice. Dealer B is selling it for $1200 under invoice but they have a $300 Doc fee. If all other things are equal which dealer would you buy from?
 As long as the OTD price is right who cares how it's broken out.

Just my .02

Duncan

montanafan

How much would the shipping be if you asked to buy the gun for under invoice?

Or if the gun dealer was required to build a secure location with safe, dedicated computer, on-line access, dedicated bank account, overnight shipping, multiple trained staff and pay monthly fees just to get your registration?

Or if the gun dealer needed tens of thousands of dollars of equipment, taining, and fees to provide an inspection sticker for the gun?

Or if the gun dealer had to take the gun off site to fill it up with bullets?

Each industry is different. As long as many buyers are only concerned with howmuch under invoice they are paying, everything else will be an interesting mess.

driftracer

Also, to ship a 10-15 lb package with some value insurance shouldn't be more than $10-15, anyway - Where's their miraclous edge on customer service? All they did was not overcharge you on shipping!

mlsphd

Living close the state border in an area with lots of dealerships, the doc fees and advertising vary. Two dealers 15 miles apart can be in different regions. Since the "doc" fee is an added profit for the dealer, I do my invoice pricing and then come up with an out the door price. I have had dealers reduce the sales price so they could still show the doc fee on the sales contract--thats fine with me.

The last 7 cars i purchased were done over the phone/internet. The out the door price approach saves a lot of my time and grief.

atlgaxt

Nice. I said that I think it is poor business practice to throw an additional $400 fee at the very end of a negotiation, when the paperwork is being signed.

You call me a whining, crying, scared sheep who is not astute. Based upon your profile, I see you are not actually a salesman, but you work in the auto industry. This clearly shows the derision that many in the industry have for consumers, and points out why car dealers have such poor reputations.

Sorry that I am not an expert at buying and selling cars. I'm in the commercial real estate business. In real estate, you negotiate a deal and close it. You don't go to the closing table and suddenly add 1.5% to the sales price, which is what the doc fee I was presented with represented to the price of the car I was buying. It is poor business practice and in bad faith. But, if you think your customers are crying sheep to be shorn, you will do it to make sure you completely fleece every penny out of your "customers" pocket. Like I said, I have not bought a lot of cars and that was the first time I saw a doc fee. Now I know better. I'm just wondering how I will get jerked around next time, after I think I have negotiated an out the door price.

The comments about going in and asking for the best price and walking out in 30 seconds are really funny also. No dealer will work that way. I have even tried to buy cars via internet negotiation, only to get a bait and switch when you get into the dealer. This was on a previous purchase. When I told the salesman I wanted the deal (and truck, which he did not even have in stock) we had agreed upon and I told him that I did not want to start negotiations on a different vehicle with a different color and equipment that he was trying to ram down my throat, I walked out. The salesman gave me an obscene gesture as I was walking out for the benefit of his laughing henchmen in the store. Only he did not know my wife was in the lot and she saw him.

driftracer

"you work in the auto industry"

That's not correct in the least - I help consumers. Only consumers. I work in consumer plaintiff litigation AGAINST manufacturers and dealers, so I'll ask you to reel in your criticism, since I'm on your side, not "the dark side".

atlgaxt

Sorry to get that wrong. I see the lemon law and appraiser information, but your profile does also say something about consulting for a large dealer group in sales marketing and training, which I construed to essentially mean that while you may work on both sides of the fence, you do have associations with dealers.

rroyce10

........ It looks like the only exercise this guy is getting is Jumping to conclusions ..

               Hmm, I wonder how many times this real estate mogul watched his clients skirm at a closing when their figures mysteriously changed from $5,500 to $9,500 .. no bait and switch there .l.o.l...

                             Terry.

driftracer

dealer group, and I searched long and hard before accepting a consulting position with THAT group. I train salespeople (improve CSI and customer relations, which equals increased sales).

I wouldn't get involved, of course, if a dealership in the group I work for crossed the line, because that would be a conflict of interest - also, I'd look for another group to help rather than be associated.

If I were teaching salespeople how to perform the strangle hold, headlock, and other wrestling moves, I could see the "both sides of the fence" assumption - that's not the case.

driftracer

Real estate? Compared to car sales? The last time I checked, a car dealership doesn't charge the consumer the $3.00 it costs to run your credit, although a real estate agent will gladly do it if you pay a $75.00 fee....for a $3 service...

Oh, yes - Mr. Pot, I'd like you to meet Mr. Kettle...

atlgaxt

My whole point was that it is poor business practice to negotiate, reach an agreement, then hand someone a piece of paper to sign that has an additional fee. I'm on the commercial real estate side, primarily in appraisal, but I do brokerage and investing, and that is not how I do business.

For pointing this out, I have been called a whiner, a crier, a scared sheep and not astute (stupid). For Pete's sake, I ended up renegotiating to net the doc fee out, but having to do so made me angry.

Now I have been told that I "jumped to a conclusion" by reading that driftracer is under contract to do work for a dealer group.

What is your point? Hitting the consumer with hidden costs at the end of a negotiation process is a good thing? Are you defending this type of business practice?

Answering that the consumer should know beforehand to avoid this fee is not the answer to my question. Claiming that other practitioners do similar things in other industries also does not make it right to spring an unexpected additional cost on a car buyer.

driftracer

no retail business should ever add on fees or costs after a true deal has been struck. For me to make such an exclusionary statement, though, I have to ask if people know ehn a true deal has been struck.

A payment buyer who asked for "no more than $325 a month" and never asked about any other fees is setting themselves up for being upset. If every dealer in the state is allowed by that state to have a doc fee, and every dealer does, how can a consumer get angry because they didn't ask about it?

You asked for $325 a month - you got it! If you want us to disassemble the invoice down to the last penny, just ask. If you want to know why we charge a $5.00 new car "tire fee", ask the state, not us - isn't like we make any money on that!

The thing is, you can ask for all these fees up front - that takes their knees out and takes the wind out of their sales - plus, there's no surprises for you.

I've had consumers ask, as soon as they're greeted, "does yor dealership have a doc fee?". Our folks respond "Yes, it's $55, like most other dealers in PA". There - all done.

Now, there's state set tax levels and license fees - all there is to negotiate (or demand) is the price of the vehicle, and they trade, if involved.

steine13

"In real estate, you negotiate a deal and close it. You don't go to the closing table and suddenly add 1.5% to the sales price, ..."

I sure hope you don't. But last time we refinanced, the title company tried to put one over on us, to the tune of $1,200, if memory serves.

When I sat down to negotiate for my first new car, I started by asking, "Hypothetically, if we agree on a price of $10,000 for the car, what will I have to pay to drive off?" One doesn't have to be an insider to do this.

-Mathias

rroyce10

.... ** last time we refinanced, the title company tried to put one over on us, to the tune of $1,200, if memory serves **

              It just Flat kills me .l.o.l. .. folks will offer $1,000 back of invoice, then they want the dealer to eat the sales tax, throw in the leather cashmere floor mats, free oil changes for life and a new service vehicle .. but Nobody pays attention to that $1,200/$2,500/$6,000 of extra closing costs of the refi or the purchase of the new home ..... Why is that.?

                   Nobody but Mathias .........

                                Terry.

montanafan

I recently was involved in a commercial loan situation. After several meetings/hours, we received the loan term offer letter. Then it was disclosed a 1% fee. At our next meeting,we were given an invoice for several hundered dollars for a valuation report that we had already paid in full for two months earlier. When I received the commitment letter there was thousands in closing fees. I wil post back when we finally get to the closing about any other surprises.

Every business is different but simular. ;-)

And I would have gone straight to the dealership owner about the salesperson's hand gestures.

montanafan

Opps, $24 to monitor any changes any changes in flood status through out the loan. And we now need a survey by a registered land surveyor to certify zoning law compliance.

bsumm

Got a quote for a 2000 Ford Crown Vic (8k miles) for $10,500.00 The Reg. Lic., Title, and "fees" are an additional $1,119.11. This is in Texas. Does this $1,119.11 seem reasonable? Thanks for any input...

mirth

...I don't know Texas DMV, and Texas does march to a different drummer, but I can't imagine that Reg, Lic, and Title are more than $40 altogether (less than $20 here in Michigan). Throw in another $50 for their doc fee, and you still have to account for $1000. You sure that doesn't include sales tax?

driftracer

on automobiles back home in TX - you'll need to break those fees down before anyone can know what "fair" is...

bsumm

I'm sorry....that DOES include sales tax

driftracer

tax only accounts for $630 of it, plus you have $30-40 for plates, depending on the county, then there's TX inventory tax, but it shouldn't be much at all on $10k.

Let's see what they are - Terry over in Real World Trade values borrowed my crystal ball this week, so I can't see clear to TX from here...

crkeehn

Tax $630 (6.25% of sale price)

Title Transfer fee $28 or $33, depending on County
  (Texas DOT)

License Tag $50.80 (Texas DOT)

Local Fee (Between $5 and $11.50, depending on County) (Texas DOT)

Financial REsponsibility Fee $1 (Texas DOT)

Might be 1 or 2 additional fees in there, but it sounds like $300 or so unaccounted for.

bsumm

My God, you're good, crkeehn! After I did the deal I closely examined the paperwork and they hit me with $300.00 for "window security etching." But I'm not too upset, they beat my ELoan 3 year dealer used (4.45%) with 3.99%, which is outstanding. I also got them to throw in a window tint. I know, it's only $100 or so for window tint, but I think I made out okay...

crkeehn

I went to the Texas Department of Transportation website. They give the information, however it's scattered all over creation. Luckily it was a slow day at work ;-D

driftracer

that you'd have to sign for on a separate form - didn't you read them papers, fella?

hbarad

When Edmunds calculates the TMV for a particular vehicle, does the quoted TMV price include Doc fees?

driftracer

Edmunds can't possibly take into account and keep up with the various doc fees at every dealer in the nation.

hbarad

I guess I should have been a little more specific. Edmunds description of TMV include the following:

The TMV price takes into account a number of factors, including the vehicle's invoice price, its manufacturer's suggested retail price, the current supply and demand for the vehicle, the vehicle's relative brand strength and actual transaction price data.

I was wondering if the "actual transaction price data" included the Doc fees. I realize that including the exact fees each dealer charges would be impossible, but if they have actual sales data available, the TMV could include an average for the area.

Thanks

driftracer

regional advertising and freight costs, which, of course, vary by region.

cadillacmike

Doc fees can be fun, if you know how to deal with them, because they are not going away anytime soon. My problem is how they seem to grow by leaps and bounds. The Cadillac Dealer thinks I must be made out of money, because they have a whopping FIVE HUNDERD DOLLAR doc fee preprinted on their sales sheets. Now I knew about the fees but 5 big ones, that was too much. So last August when I had a trade in on a 2000 elDorado, I told the salesman, "I told you I would pay 25 thousand for the ElDorado minus 10 thousand for the Miata" so, you can either reduce the 25 thou by 500 or add 500 to the miata's trade allowance, but either way, difference is going to be 15,000 and they were ok with it. This was AFTER I informed them that they had to replace the entire trunk lining and spare tire kit in the ElDorado because the trunk had leaked (it's a convertible) and it smelled bad, plus several other cosmetic / minor mechanical items that I insisted were all done before I took delivery. They agreed (this was my second car purchased there).

 

The next time (this past week) I knew that the Doc fee was 500 and this time I had no trade, so I just went into the sales mgr's office (they all know me there by now) and went over their advertised "internet price" - supposedly a "great price" and the "best available" and told him that I would give them a check for 36,000 and I would pay the state sales tax and license plate charge with my mastercard, but that the 36,000 would be the TOTAL that they received (meaning that it would include the 500 bucks doc fee). Brief clarification (he thought I meant the 36,000 was to include the sales tax too), and he agreed in 10 seconds. The car had an "internet price" of over 37,000 - I'll bet the internet sales mgr is still steaming over this one.

 

But they still snuck in a $30.00 tag agency fee on me. I wasn't going to [non-permissible content removed] about thirty bucks (29.95) but I made sure that they were going to "earn" that fee, because when I came by two days later with the 36,000 bank draft (no I'm not made out of money - it was a pre-approved loan draft) I also handed the F&I person a completed Florida state application for a US Reserve / National Guard plate and told him to get me a US Reserve plate. That'll frost their a$$es and if they don't I'll let the GM know how their tag folks can't even do a simple tag application.

 

Tracer, you really should set the record straight and let the good person know that you ONCE worked as an F&I person at a dealership (oops I just did that).

 

Real Estate is NOT fun though. Earlier this year, after I got back from the desert, I decided to re-finance the house because rates had dropped quite a bit while I was eating SANDwiches. So I called my current bank first because they had provided good servicing in the past, but their rates weren't that great, and when I got to closing, I was EXTREMELY agitated with all the "junk fees" that they were trying to pack in to this re-fi package. I walked out of the title company's office. A month later I got almost 1% lower with not as many nuisance fees - but with a different lender, who promptly sold the servicing to Wells Fargo, but at least I don't have anymore escrows with the new loan. I'll take car buying any day.

CarMan@Edmunds

Good job on negotiating out the doc fee in your last purchase, cadillacmike. Five hundred dollars is a pretty steep doc fee, but I am sure many many consumers just sign off on it after they have already agreed to the price of the vehicle that they want. I always advise consumers to look at deals as a whole and to focus on the out-the-door price, either the true OTD price or one before tax, treating fees like this as though they are part of their vehicle's total price. If the price that they are able to purchase the car or truck that they are interested in for, including all of the fees, is attractive to them then go for it.

 

Car_man

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Smart Shopper Forum

cadillacmike

At least this dealer doesn't try to stick on stupid things like ADM or ADP Additional Dealer Profit / Markup. There was a Ford dealer in Tampa notorious for that as well as several import dealers. This dealer has tried to put a "marketing adjustment" charge of nearly $10,000.00 on new XLRs (the 2 seat roadster that lists at around 75 thousand) I laughed when I saw that one. Admittedly the XLR is a limited marker car. I wonder what they finally did sell that car for?

driftracer

to ask whatever they like....what you pay and whether you buy the car is between you and the dealer.

boomer1b

We have a FEW smart lawmakers here in NY !!!!

 

DOC fees are limited to $50 bucks......

go323

I took the same approach as cadilacmike. All fees outside of the state's published $ for tags and registration are dealer mark-up. I didn't care how much was in the Buy Order for fees, so long as the bottom line was my number (which of course included $0 for fees). The $289 processing fee I allowed the dealer to include in the buy order - but which was not really there because my number excluded (was reduced) by it - has interesting aspects: I discovered after I had picked up the car 2 days later that the air that was supposed to be in the tires wasn't there. I.e., 12, 22, 25 and 26 PSI, instead of the 30 PSI recommended by Ford. Nor was my service record book there. Did the dealer not prep the vehicle at all, and pocket the $289 proceesing fee I didn't include in my number? Did cadilac mike have to put his own air in his tires? After i go back to the dealer's service department tomorrow and have the service department do the check they didn't do, do i go to sales and demand the $289 back for service that was included in the buy order (forget that it wasn't in my number!)?

Question: Is there any checklist (100 points) or otherwise that anyone knows of which is used by a Ford dealer to prep a vehicle for delivery? I would dearly love to get my hands on one... tay tuned.

go323

A question has occurred to me as to whether I should take the un-prepped car to the Service department of the dealer from whom I bought the car )i.e., the same service dept which did not prep the car, OR, should I take it to a competitor and have them run a prep check (ugh, - for a fee)? What, besides check for air in the tires do, they normally do in prepping a car to earn their fee? Anyone know?

cadillacmike

Was that a NEW car or used? I always make them go dig up all the manuals and portfolio covers for a used car that I'm buying. That hasn't been a problem. I also get the GM warranty service history and review any dealer service with the sales mgr before battling over the final price for the car.

 

Stealing your car's tire's air - That's a new one. A tire can be 10-15 PSI below spec and not be readily apparent. I know, because I have to run around my wife's car all the time with my portable compressor to fill them up (don't forget the spare - I did that once!).

 

If it's a new car, make them correct any problems. If it's used and still under warranty - ditto.

 

If it's used and you have serious questions or concerns about the car, take it somewhere else.

 

As far as a checklist, try visiting a different dealer, ask them about their "certification" process or checklist procedures. Ask the sales mgr or svc mgr. I did see the Cadillac 112 point list (they actually gave me a copy with my last car) and a lot of it is basic, but there are some "real" items on it. for example there is a item on brakes with pad thickness at all 4 wheels, of course mine was "checked" but had NO NUMBERS for pad thickness! Same for tires, "checked" with no numbers! Some items that I've seen dealers make excuses for are the lack of both sets of keys and remotes. That frosts me when they try to say "well, there's only one set".

 

If it's used, hold their feet to the fire for any missing items that you need! Usually this is best done before taking delivery.

craftycheetah

Hello,

I'm thinking of buying a new Honda Civic Sedan in Raleigh NC and I'm trying to figure out what a fair documentation fee would be. The dealers nearby are trying to charge me $398. I mentioned waiving the fee and one dealer wrote back that this would be illegal. Is that true, and what should the documentation fee be here? Thanks!

jb_turner

I am also in NC I will advise you to forget about the fees and shop around and get the best Out the door price.

craftycheetah

I got a good price for a 2005 Honda Civic EX Sedan Automatic (I think)...about $16,958, plus 3% tax, $398 documentation fee, and $62 title fee. The Edmunds invoice price is about $16,500 and that is before the destination fee (which Edmunds listed at $515) which I understand is the one legitimate fee there is. So, I think the only chance of bargaining down is on the documentation fee which seems way too high at $398. My out the door price would be about $17,926. What do you think?