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Smart Shopper Documentation Fees
667 messages, Last post on Sep 18, 2009 at 3:24 PM
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 Regarding a recent used vehicle purchase with a $369.00 Doc Fee... An exerpt from the Arizona Attorney General's Office Website regarding Consumer Fraud and Car Purchases: Be cautious about purchasing aftermarket add-ons or treatments offered by the dealer. Examine the cost and need for such extras and whether you can afford it. Some add-ons are unnecessary or are significantly overpriced, and they may greatly increase the price or cost of your overall financing. Negotiate on an “out-the-door” basis. Explain that you want to know the dealer’s total price, including everything except the costs for which the dealer will send a check to governmental agencies (generally only sales tax and registration and title fees). If you don’t, you’ll likely agree on a price and learn later that it’s the dealer’s “policy” to add fees for “document processing,” weatherproofing, safety inspections, dealer “prep,” destination charges, etc. Copied and reprinted from the Arizona Attorney General's Office Website as Public Information currently available to any consumer. A written response from a local Dealer regarding "Documentation Fee's "The documentation fee is disclosed on the purchase order that all customers sign both during the negotiations and in the business office. The documentation fee represents a fee for services rendered on behalf of a motor vehicle purchaser for preparing, handling, and processing documents pertaining to the closing of a transaction and the subsequent titling of a motor vehicle. This fee is reported and validated with the state, and is mandatory on every car transaction at Dealership Name Undisclosed Here." Vehicle Edge's Viewpoint The "documentary" or "documentation" or "DOC" fee for the above mentioned transaction was in the amount of $369.00. None of the $369.00 was used in the course of titling or registering the vehicle. This is obviously a known problem, and the Attorney General's office clearly states that in the above exerpt. Why isn't anybody doing anything about this common fraud to consumers? To what extent is this fraudulent practice being abused? Consider the following: If this particular dealership sells 250 vehicles per month, and you multiply the $369.00 times the number of vehicles sold, this one dealership has just "scammed" over $92,000.00 from consumers. And that is just one dealership in one month! Yes, this is a serious problem. Reprinted with Permission from www.vehicleedge.com website
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Why isn't anybody doing anything about this common fraud to consumers? To what extent is this fraudulent practice being abused? Well since no law was broken, where's the fraud? I don't agree with documentation fees but if people agree to pay it, they agree to pay it. |
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First off, can't we agree to eliminate the sweeping generalizations and name calling? This serves no purpose, except perhaps boosting the posters ego. I can not think of any occupation that doesn't have its bad apples. And yes, some tactics are inexcusable. I would think the reason automobile dealers resort to various add on's like "Doc Fees", "Mop and Glow", and other such stuff is because buyers think they should pay actual dealer net cost plus a hundred bucks or so for their new $25k set of wheels. An infintesimal gross margin. Any more, and consumers think they are getting ripped off. How did it start? Don't know for sure, but its kind of like the chicken/egg question. Just like any business, they have to find a way to cover expenses to keep the doors open. If they price their merchandise realistically with no add on's, they are not able to compete with the merchants who do have the "after" or "up" charges. So we will have to live with it. But at least we can be civil. I enjoy reading this forum, with both the buyers and sellers input. But I really do think some folks get carried away, and I wonder why the car pro's keep coming back.
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Replying to: jwilliams2 (Jun 29, 2006 10:59 am) |
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Are doc fees negotiable? My local Infinity dealer says they charge these fees ($250) to cover the cost of the title of the car. This is in addition the motor vehicle fees (unspecified at this point). Can't I just go to the motor vehicle agency myself for the title and plates?
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Replying to: littlewonder (Nov 10, 2006 10:36 am) Short answer is yes. Long answer if you want them less be prepared to fight for it. Doc fees are almost pure profit. |
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Replying to: littlewonder (Nov 10, 2006 10:36 am) My view is simply to treat them as part of the price of the vehicle and negotiate accordingly. |
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I've got a question that might best be asked via a story. Let's say John Q. Grinder goes to a dealership and negotiates for over two hours on the purchase price of a new $22K Camcordima. This is his second trip to the dealer, having test driven the car two days prior. The sales guy has probably spent over 3 hours with this customer, and he really wants to make this sale. The negotiated price is $100 above dealer invoice, not including holdback and any possible bonus money. When it's time for Mr. Grinder to sign the Purchase Order, he notices a pre-printed $400 Doc Fee added to the negotiated purchase price. This fee, for whatever reasons, is much higher than he expected. When Mr Grinder insists this fee is too high, and threatens to walk out if the $400 Doc Fee is not reduced to a more "reasonable" $200, what happens? My guess is the typical dealer will eventually accomodate him (although I'm not convinced some dealers would stop him from walking), but where does that money come from? In other words, if an agreement is reached, is the sales guy probably losing some commission, or is the dealership eating this loss?  Edit: I intentionally asked this to present the Doc Fee negotiation as an "afterthought", after both sides had thought price negotiations had already concluded. With an adjacent state limiting its dealers to about $45 in Doc Fees, but several local dealers here in Arizona charging $388 or higher, I think this story might be a common scenario.
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Replying to: cotmc (Nov 10, 2006 4:45 pm) On the other hand if you are looking at a dealer and you notice their doc fee is very, very high(499-599-699-etc.) then keep in mind that the dealership is basicly stealing commissions from their salespeople. Most people that are somewhat informed are just going to work the doc fee into their OTD offer and so by having a very high doc fee the dealer gets added profit without having to give the salesperson his/her cut. |
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