Documentation Fees

nobshere · February 2008

I work at a dealership here in Oklahoma where we put our best price in the window on both new and used cars. There are no "doc" fees, or anything like that. We have been beat on price a few times in the 8 months I have been here, but I have seen the gross profit on the vehicles and its about the same as some of the doc fees you guys are talking about. I am trying to figure out what the most important aspect of the dealership really is.

louiesmom · April 2008

I am about to close a deal on a Lexus GX470. Once I went over the paperwork, I noticed a hefty $795 acquisition fee and a $199 doc fee. Are these negotiable. I feel as thought the acq fee is a total rip off. This may break my deal. Help!

british_rover · April 2008

All leases have acquisition fees and they very from 595 to 995 depending on the leasing company. Are you leasing the GX470? Some leasing companies let the dealer markup the acquisition fee and some don't who is the lease through?

A 199 doc fee is pretty reasonable for most of the country and is actually kind of low for my area. It would also be low for Florida and most of California.

kyfdx · April 2008

In California, doc fees are capped at $55 by state regulation...

oldfarmer50 · April 2008

"...In California, doc fees are capped at $55..."

In New York it's $45. Which means that anything over $40-60 is pure profit.

I get a kick out of people who say they got their car at $200 below invoice and then paid a $600 doc fee. I guess they never look at the bottom line.

kyfdx · April 2008

... seem to be the worst...

$399-$699 is not unusual...

british_rover · April 2008

Hmhh what other state out there has high doc fees then? Arizona maybe? I know Florida can be crazy.

michaellno · April 2008

The Saturn dealer where I've bought my last two cars charges $489.95 for its fees. That's probably a bit on the high side for the state, but $200-400 probably isn't.

Fortunately, as someone who is entitled to a GM Supplier discount, it's capped at $75 for me.

fordfool · April 2008

> I noticed a hefty $795 acquisition fee and a $199 doc fee.

Read the lease contract carefully. The leasing company is going to want even more money when you turn in the car at the end of the lease: a disposal fee, milage fee, wear and tear fee...plus whatever else they can think of. :mad:

As far as negotiating the fees, it's easier to simply insist on another $1000 off the purchase price to offset the fees.

euphonium · April 2008

It stops me from buying from them immediately.

DOC fees are like paying an Usher to find your seat at the opera.

nobshere · April 2008

Acquisition fees are normal but I know with like Chrysler the fee is $75 only on a lease. If you are purchasing a vehicle there should be no fee for acquiring the loan unless you have real bad credit. the doc fees are bull most of the time that fee is sheer profit for the finance manager. Make sure that you dont have any credit issues and find out what the turn in fee is 75 dollars again should be average and as far as damage and mileage no more than five dings per panel and the have to be smaller than a credit card in size, keep under the agreed upon miles or if you find yourself needing more miles pay a little extra on the note ( call the leasing company to add miles they are cheaper that way ).

delta737h · April 2008

I was told by an F&I guy and an Internet Salesman from two different Ohio dealerships that the State of Ohio requires a $250.00 "DOC FEE". This is untrue and so I have elected not to do business with them because either they (a) lied or; (b) are misinformed and, therefore, incompetent. The F&I guy said "sorry for the confusion". CONFUSION???????????? There was no CONFUSION. He minimized his lie or his own incompetence! An F&I guy, more than anyone, should know better and should be held responsible for knowing better. Americans tend to be too tolerant, too lenient and too forgiving. NOT ME! Tolerance and leniency is a breeding ground for acceptance by enabling that type of behavior.

There is no such requirement or mandate in the State of Ohio nor; in any other state for that matter, that says a dealer must charge a "documentation fee". To some, the term "documentation fee" sounds "official" and may be somewhat intimidating. States like Ohio or California can and do regulate the maximum fee that a dealer can charge by imposing a ceiling. Unless it's a regulatory fee, in no way, does any state require or mandate a documentation fee; nor would they because it just doesn't make any sense. To wit...

Ohio BMV

"ORC Section 1317.07 Increases Document Service Fee to $250

On June 30, 2006, an amendment to section 1317.07 of the Revised Code, which governs retail installment contracts, took effect.

That section now provides that a seller entering into a retail installment contract can charge a fee of up to two hundred fifty dollars for preparation of documents related to the sale. Previously, the maximum fee that could be charged for document preparation was one hundred dollars.

As a result of the amendment, motor vehicle dealers selling motor vehicles to customers under retail installment contracts can charge the customer this two hundred fifty dollar document preparation fee in addition to other fees associated with the sale of the vehicle (taxes, registration fees, etc.). It is important to note that the dealership is not required to charge the document preparation fee.

The Department of Public Safety, Bureau of Motor Vehicles did not play any role in the adoption of the amendment to section 1317.07, and receives no portion of the document preparation fee. Instead, the fee is retained by the motor vehicle dealer."

The pertinent section of the Ohio Revised Code is...

"1317.07 Requirements of retail installment contract.

No retail installment contract authorized by section 1317.03 of the Revised Code that is executed in connection with any retail installment sale shall evidence any indebtedness in excess of the time balance fixed in the written instrument in compliance with section 1317.04 of the Revised Code, but it may evidence in addition any agreements of the parties for the payment of delinquent charges, as provided for in section 1317.06 of the Revised Code, taxes, and any lawful fee actually paid out, or to be paid out, by the retail seller to any public officer for filing, recording, or releasing any instrument securing the payment of the obligation owed on any retail installment contract. No retail seller, directly or indirectly, shall charge, contract for, or receive from any retail buyer, any further or other amount for examination, service, brokerage, commission, expense, fee, or other thing of value. A documentary service charge customarily and presently being paid on May 9, 1949, in a particular business and area may be charged if the charge does not exceed two hundred fifty dollars per sale.

No retail seller shall use multiple agreements with respect to a single item or related items purchased at the same time, with intent to obtain a higher charge than would otherwise be permitted by Chapter 1317. of the Revised Code or to avoid disclosure of an annual percentage rate, nor by use of such agreements make any charge greater than that which would be permitted by Chapter 1317. of the Revised Code had a single agreement been used.

Effective Date: 09-26-2003; 03-30-2006"

A documentation fee = ADP (additional dealer profit).

John

cccompson · April 2008

Well, John, you'll be buying outside Ohio because, as you've found, ALL the dealers are in cahoots on this.

Some dealers will "offset" it by "throwing in" accessories, etc., equate to or greater than the fee. All, however, will list the fee on the contract and the buyer has to pay tax on it.

It's sad, really. It was $30 until 1999, then it went to $50, then $100, and then the big jump to $250 in '06.

Guess which party controlled both the governorship and legislature from '99 through '06?

The tactic I'm going to utilize the next time I buy is simply to reply that their $250 doc fee is fine so long as they're willing to pay my $250 buyer fee. Doubt that will work though!

One last point: there is a legitimate question whether it's legal for them to charge this fee on ALL transactions. Note the statutory language that says it's applicable to retail installment sales. This law was originally set up for vendors who handled their own paper. A cash purchase clearly falls outside that scope. Further, it could be argued that a vehicle financed by any entity other than the selling store itself is not, in fact, a retail installment sale.

mikefm58 · April 2008

$250 in Ohio? Ha, You should what they try to get away with here in Florida, usually around $600 but I've heard some down in south Florida have seen $900. Now most will negotiate and knock the price down accordingly, but the purchase invoice still has it listed.

slackovic · April 2008

I have bought 27 vehicles in my lifetime, and recently, here in NC, I came upon a used passenger van sitting on a well known Ford lot here in HIckory/Conover, NC. area..

I had been looking a few months and though this vehicle had more miles than I was comfortable with, it was one owner and dealer serviced its whole life, etc with records and such. So with the price stated on the window, the salesman got his GM who said they woould be willing to drop it $500.00 more to move it on a cash deal- so I said OK. I had the cash and wouldn't need financing anyway.

So when we started to do paperwork inside, all of a sudden, outside of NC sales tax and title & plate costs, all of a sudden this "Doc Fee' came up which was an additional $500.00 or so basically bringing the car price back up to and just above what it was before the GM said they would take the $500.00 off the price to move it off the lot.

So seeing this, I stopped signing papers and got upset asking what this is for, and they couldn't tell me except say it goes for the mechanics in the back for prepping the vehicle, etc. I told them I never saw such a doc fee in my life, and asked them to lower it and they told me it cannot be done. Still, owning many vehicles in my time, I NEVER paid more than perhaps 75.00 on any doc fee, and today seeing this huge amount seems very wrong and unethical to state a few points. How can these dealerships face customers with such a bogus fee for doing nothing but the required paperwork they must do under law? In my small business or any other business I know of, NOBODY can charge for paperwork processing fees as those are part of the normal business transaction, yet these dealers are charging people in my area these outrageous Doc Fees and it is a scam and does not seem liek they should be allowed to do so. I do know NC has no cap on any such doc fees, but in this time of economice troubles and high gas prices, how can these dealers charge such huge doc fees and expect to keep business going?

I wish I could charge all my customers a fee for writing an invoice or traveling miles on my time to give them an estimate, etc..

mikefm58 · April 2008

It's like your taxes and the phone bill. Politicians don't raise taxes, they assess fees. The phone company doesn't raise their rates, they assess this fee, that fee, and another fee. IMO it's a sneaky way of trying to charge more. Why not just sell the car for a dollar but then add on a $20K doc. fee?

It's just the trend nowadays. To save your time, when you offer a price for a car, say $X plus tax tag & title, includes all other fees. I'm going to be hitting the dealer lots this weekend and will see how that works.

otto8 · April 2008

YUP..........You gotta use the good old tied and true "Bobst method"
of vehicle purchasing !!!!!!!!!!!!!!!

No muss and a bit of fuss.........and time! But he swears it works for him!

jipster · April 2008

To save your time, when you offer a price for a car, say $X plus tax tag & title, includes all other fees.

You would save 2 or 3 seconds if you simply said, "$x Out the Door". Guys with busy schedules don't have a lot of time to waste at dealerships these days. :surprise:

cccompson · April 2008

I know all about Florida fees as I have family there and helped my dad when he bought an Odyssey in Brevard County in '06. The difference is that in Ohio there is no negotiation on the fee whatsoever by anybody.

delta737h · April 2008

The legal issue is a good question too. However, the thing that is most bothersome is that the Ohio dealers (now four) said that the $250 doc fee is REQUIRED BY THE STATE OF OHIO. This is blatantly false. So, either the dealers (a) lied or; (b) are misinformed and, therefore, incompetent. Either way you cut it, it doesn't reflect well on them. And, if they lied or are incompetent, then one has to ask what other falsehoods are they conveying? For instance, ask three different Honda dealers for the April money factor buy rate (0.00095) for a Odyssey Touring and you're likely to get three different answers.Too bad that the cost of money isn't a required disclosure by law.

John

hammuh · May 2008

Hello,

I am going to purchase a 2007 Infiniti G35 Journey in Texas tomorrow. We negotiated the price, pre TTL, this afternoon. I am aware of the 6.25% sales tax, but would be grateful for any information regarding reasonable document, title and registration fees.

Thanks!

jipster · May 2008

Title and registration usually around $50 total I believe. Doc. fees usually go from $0 to $599 (higher doc. fees in Florida)... depending on your negotiation skills. Doc fees are negotiable. I would try to get your title, registration and doc. fees for around $100-$150. Most dealership documentation fees are between $299 and $399... but again, this is their asking price.

Some dealerships have their doc. fees pre-printed on their contracts though. So, they may say they can't do anything about it. If you feel it is too high, then say fine, I'll pay your doc. fee... but I want the difference off the price of the car.

Of course you may have gotten a low price for your G35 because the dealership plans on springing a $499 doc. fee on you when you show up... to make up for any so called lost profit. Up to you to what you feel comfortable paying. Good luck with your G35. They are really nice cars.

edited: I'm in Louisville, Kentucky. Texas may do things a bit differently with their doc. fees.

the_big_al · June 2008

I like cars that are opted out like that... I would have bought had I been able to afford a brand new car like that while still in high school.... The 5 speed is what would have sold me too.

One of my faovrote drives was my old 95 Sonoma - power everything, cruise, stereo, alloys, extended cab, fog lights, V6 and 5-speed... it was a lot more fun than the slush box S-10 I drive now, even though the motor is more powerful.

annmarie4 · December 2008

Hi. I am trying to buy a used Toyota. When I thought the price was final, they threw a $300 Doc fee on it, with no explanation. At the time I planned on financing part of it. If I pay cash and credit card for the vehicle and do not finance through them, can they legally still charge such a fee? If not, how do I go about proving this? THanks for any advice you can give.
annmarie

imidazol97 · December 2008

Some dealers try to add on large fees for extra profit trying to make the customer feel they are mandated. Some even say they're required by state law. IN the case of Ohio, the last I saw, the doc fee allowed by state law was raised a few years back to $250. It does not mean they HAVE to charge anything. It just says it can't be over $250.

Just ignore the extra amount in your pricing. If you don't like the dealer pumping extra profit on you, find another dealer. There are lots of cars and lots of people can't get credit to buy them.

jipster · December 2008

Tell the dealership you'll pay no more than $100 for the doc. fee... take it or leave it.

mikefm58 · December 2008

Here in Florida where the typical doc. fee can be in excess of $600, the dealer will always say, "If we don't charge everyone for it, we can get sued by some minority, it's even pre-printed on the invoice, see", and they are probably right. On the last vehicle I bought with a doc. fee, I asked what the fee was upfront and simply deducted that from my original offer.

Tell them you'll pay the doc. fee but deduct that fee from the agreed on price since they were not upfront with it. Be ready to walk out though.

euphonium · December 2008

Just as you are not obligated to pay a "policy" fee on your car or home insurance, you are not legally obligated to pay a "documentation" fee on your new vehicle.

"Oh, you have a "DOC"? See me walk!

hulkedup · December 2008

I'm having a lot of problems with documentation fees in trying to buy a new Scion. It fact, it's been the deal breaker for at least three dealers already. I've already agreed to pay MSRP for the Scion, but the dealers in Massachusetts want an additional $300-600 in these fees. When I've balked at paying that they just say there's nothing they can do and decline to work with me. I've even been told it's a Scion fee!

It's bad enough to buy at MSRP these days, but paying a doc. fee is just an insult.

exb0 · December 2008

Do yourself a favor and call these guys: www.fitzmall.com. These guys sell Scions at invoice and only $100 processing fee. It is only 9 hour drive from MD to MA. For $1000 in savings, I am sure it's worth it.

mikefm58 · December 2008

I thought all Scions were sold at list price, kind of like a Saturn, no negotiation? The fees are usually non-negotiable, though on other brands you can sometimes get them to deduct from the price or add to the trade in amount to negate the fees, but they're still written up in the contract.

exb0 · December 2008

I thought all Scions were sold at list price, kind of like a Saturn, no negotiation?

That is incorrect. Scions have to be sold at a fixed price; however, dealer determines what that price is, as long as all customers get the same price. Most dealers choose to sell Scions at MSRP, fitzmall decided to sell them at invoice. CarMax discounts them $250 off MSRP.

As far as the processing fee, all dealers in MD are caped at $100.

travist4 · June 2009

The amount of Documentation Fee, set by a state, is pointless (gov't pretending to protect its sheep). Truth is: A dealer will determine what his/her profit will be or what profit and/or loss he/she is willing to take or endure. Let's say a dealer has 10k actual cost in a vehicle and a customer offers 10k - the dealer may think, hmm well at least I'll get my documentation fee, electronic filing fee and so forth - Whereas, if such fees did not exist - your offer would be rejected.. So what? You could just offer 10,500 (500 being the same as all the fees combined) - presto that should do it, right? Wrong! You see, 'evil salespeople' are not paid commission on doc fees, etc.. In larger Franchise dealers the profit decision process is worse.. for example, the 'main boss' may require all deals have a min profit of 1500 per copy.. So, the manager creates 500 in fees and (tells the salesperson the vehicle cost 1,000 more than it actually does - to avoid paying commission on 1k) - now the manager can cover what the Boss wants... so everything else is profit: the customer and salesperson sacrifice in order to pay the boss... The manager discounts the true value of your trade and so forth in order to make a profit (so he/she can get paid - more importantly so he/she doesn't get fired)... in short, "We don't Charge a Documentation FEE" - may sound great; but in truth it really doesn't matter if a Doc fee is charged or not.. Squeeze the balloon on one end and the air simply moves to the other end - all said and done! FEE or no Fee, retail cost or wholesale cost - none of it matters - What truly matters to you is where you will be squeezed; understand? Price doesn't matter to you, as much as how much you get for your trade right? (i raise the price and show it in your trade) - you refuse to pay a doc fee ( i devalue your trade or raise my price ) - All you care about is payment - hey, no problem = I'll stretch your term.. and so on.. happy motoring!

euphonium · June 2009

Can you list the states that by law require the dealer to charge a doc fee & if so what is it? I'm particularly focused on TX.

Thank you.

kyfdx · June 2009

I don't think any states require that a dealer charge a document fee.. Quite a few states cap the amount a dealer can charge... Many times, the dealer will intimate that the amount is required, but that simply isn't so..

Texas, California, Ohio, NY, all cap the document fee (at varying levels). I'm sure there are others..

oldfarmer50 · June 2009

"...Texas, California, Ohio, NY all cap the document fee..."

NY has a cap of $45. They make up for this by charging a higher price for the car.

euphonium · June 2009

a DOC fee was listed in the paperwork. They still have the vehicle and I still have the money.

The ST rate in my county is 7.7% & their rate was 9.7% which I was willing to pay, but the listed DOC fee was the straw. :mad:

alamocity · June 2009

State law in Texas`limits the doc fee at $50.00.

jb_turner · June 2009

So what if the total OTD price is lower from the dealer with the DOC fee? Do you still purchase from the dealer without the doc fee even if their total OTD is higher?
Just go with the best OTD price... we all have to pay it.

volvomax · June 2009

A dealer will determine what his/her profit will be or what profit and/or loss he/she is willing to take or endure

That is all you really need to say. It's a business, not a charity or an exercise in building friendships.

volvomax · June 2009

So what if the total OTD price is lower from the dealer with the DOC fee? Do you still purchase from the dealer without the doc fee even if their total OTD is higher?
Just go with the best OTD price... we all have to pay it.

Good advice. Bottom line is all that matters.

euphonium · June 2009

The DOC fee cheats the commissioned salesman as it is not a "commission income" item. Having always been a commission only businessman, I don't like policy fees and DOC fees. I also don't like the surprise of it appearing at the close.

Have you ever seen a dealer advertise, "We have the lowest DOC fees."?

volvomax · June 2009

The DOC fee cheats the commissioned salesman as it is not a "commission income" item.

IF a salesperson was paid 100% commision I would agree. However, the vast majority of salespeople aren't just paid on commission. There are flat's,unit bonuses, CSI bonuses, demo allowances, all kinds of other ways for salespeople to get paid.
That money has to come from somewhere.

lrguy44 · July 2009

The Doc fee has absolutely nothing to do with the sales dept profit on a car deal. The dealer principal sets the fee and all customers are charged the same fee. If you negotiate the fee, they will deduct it from the price of the car (sales profit) and still show the fee on the paperwork. This is to avoid a class action law suit (i.e. charge one-charge all). In my state most Doc fees vary from dealer to dealer from about $149-$499. If I or any employee including the GM, etc. buys a car, they too will be charged the Doc fee.

euphonium · July 2009

DOC fee, Environmental fee, Tire disposal fee, Service fee, Policy fees are paid by the insecure, meek, & pushovers who haven't the testicular fortitude to object.

Extracurricular charges are not defensible by threats of avoiding a class action lawsuit. All fees like the above are imposed, but not enforced by any statuate. :P

cadillacmike · July 2009

I don't even want to THINK about what the local Cadillac dealers (FL) will be charging as DOC fees when i get home... :sick:

joel0622 · July 2009

Extracurricular charges are not defensible by threats of avoiding a class action lawsuit. All fees like the above are imposed, but not enforced by any statuate

Tell that to the dealers in Georgia who a few years ago had the FTC come in there dealerships, do a full audit and required them to send checks for the DOC amount to every customer they ever charged it to for (I belive) the last 3 years.. They found a paper trail of some paying and some not. As was said earlier, we may have to bend on it occasionaly but every deal you pull in our building will show we charged it.

Also how can you say they are not enforced when most states have a law stating what they can be?

euphonium · July 2009

What they can be and what they have to be are not the same.

jb_turner · July 2009

OTD is what matters.... we all pay it.

euphonium · July 2009

True, but when the dealer itemizes it, the message is, "Here is how much more you are being charged."

I don't honor "Additional Dealer Profit" statements either.

Documentation Fees

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