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Smart Shopper Documentation Fees
667 messages, Last post on Sep 18, 2009 at 3:24 PM
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In my most recent car purchase, I had a set minimum purchase price from my bank to get the ultra low intrest rate. During negotiation the price dipped $209 below the minimum price. This left me scrambling to think of dealer addons that would get me back over the minimum. Well then came the $250 doc fee, as the fee is added directly to the cost of the car (check the title) problem solved. Never thought I would be glad about the increased doc fee, it saved me well over $250 over the length of the loan. This vehicle was slightly used (approx. 700mi) and as such had $3000+ knocked off the the original MSRP, so going with a similar model near that price wasn't much of an option. I would've had to switch to a different brand to find what I was looking for at the price. |
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Brought over from another thread: This is an excerpt from a local (and somewhat nationally recognized) auto writer about the state of Illinois' soon to be almost tripling of the DOC fee. Sorry ISell but the "paperwork" a dealer does doesn't justify this ridiculous fee. As he suggests in the article, I negotiate a lower sale price to compensate. Then, as now, the DOC fee isn't mandated by law, the amount is. Dealers are free to charge the fee or not as long as everyone pays the same if it is charged and it doesn't exceed $58.48 now ($150 soon), says Jerry Cizek, president of the Chicago Automobile Trade Association, which represents more than 500 Chicagoland dealers and spearheaded the original DOC fee as well as the proposal for an increase. Bob Loquercio, chairman of the association and an Elgin Toyota, Scion and Hyundai dealer, insists the higher fee is justified. "The amount of paperwork and people needed to process it have increased. The cost has quadrupled since 1992, but the fee hasn't kept up," he said. Can't object to a higher fee if it costs $150 to process the paperwork--Loquercio won't say--but wouldn't hiring a staff that can dot and cross faster be a better solution? Loquercio argues that many dealers, himself included, weren't in business when the DOC fee was adopted and had no say in the amount. "I became a dealer in 1996. We probably had 10 documents to fill out on each sale then. Now it's more like 40. We've more than doubled our staff because [political] bureaucracy has increased the amount of paperwork to process even the simplest of tasks." For example, 9/11 adds to the load. "Dealers have been asked to do more, even checking to make sure they aren't selling to terrorists," said Cizek. Compliance with the Office of Foreign Assets Control mandates dealers don't do business with "prohibited persons," defined as terrorists or those who support them. A dealer can't sell a car to or even change the oil for a prohibited person. An office worker has to check the buyer's name against the people and organizations listed on the OFAC Web site with whom dealers can't do business. There are 262 pages of names, but it only took a couple of minutes to see that there's no Jones, Thompson, Williams and only one Smith (Columbia) on the list. What really gripes Illinois dealers? In at least 30 states dealers charge $400 to $900 in DOC fees--though anyone charging $900 must be using $100 bills for notepads. So what's wrong, they argue, with those in Illinois charging $150? Of course, that raises what surely will be the next question dealers ask: If other states charge from $400 to $900, why is Illinois charging only $150? Replies to this message: |
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This is from the Lexus website: " "Delivery, processing and handling fee" is based on the value of the processing, handling, and delivery services Lexus provides, as well as Lexus' overall pricing structure. Lexus may make a profit on the delivery, processing and handling fee." The fee for the RX 350 is $715 here in VA. Obviously, part of that is profit for the dealership. I wonder what the DPH fee is in CA, where there's a cap on doc fees?
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Replying to: khristina (Apr 13, 2007 6:03 pm) The "doc" or "processing" fee is added by the dealer; it's oftentimes pre-printed on the buyer's order (contract) to make it appear to be non-negotiable. This is really a back-door way of adding profit for the dealer instead of simply raising the sale price of the car slightly. So in this manner, it's no different than dealer-added "accessories" like pinstripes or "mop 'n glo" (glorified wax job). Unfortunately for the salesperson, the processing fee adds nothing to his or her commission.
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Replying to: 210delray (Apr 13, 2007 6:41 pm) Fishy, fishy...
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Replying to: khristina (Apr 13, 2007 8:11 pm) Most of us just compute an out-the-door (OTD) price we are willing to pay and offer it to the dealer. That price includes everything. If they accept, we buy the car. If they do not accept, we leave. We may later go to a different dealer and offer the same price or a higher price, or we may go back to the same dealer and offer a higher price. |
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"...or we may go back to the same dealer and offer a higher price..." Bobst, every time I have returned to a dealer I can almost hear the salesman say "gotcha" and dig his feet in as he prepares to bump the price. I guess they figure that once you come back you are now in a weak position. What would "The Patented Bobst Method" do if the salesman starts the bump and grind? Isn't your threat to walk taken less seriously at that point?
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Replying to: oldfarmer50 (Apr 15, 2007 6:17 am) When I was a young fella like you, I used to think too much. The golf pro Bob Toski accused me of "paralysis through analysis", and I was certaily very guilty of that. I don't try to figure out what the sales person is thinking. I don't care if they say "gotcha", dig in their heels, or start to bump and grind. I don't care if they take me seriously, but I am sure they take my money seriously. Thinking back, I can only recall one time where I went back to the same dealer and increased my offer. They accepted and I bought the car.
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Replying to: bobst (Apr 15, 2007 7:42 am) Thats great Bobst. I truly believe that allot of times people make the transaction much harder then it needs to be. There has been more then one occasion when a fellow manager has asked me why I did not make a particular deal and I tell them that the consumer was on information overload and was to informed to make a decision. It is true there are folks who are armed with so much information that they can't make a decision. I have had cases where people come with there spread sheets, print outs, lap tops, consumer digest articles, EDMUNDS PRINT OUTS  , and a slew of other info and if one thing deviates from the path they are on then they are just blown away, and are unable to make a purchase decision over the fear of getting taken for $1000 over a $300 option 
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Replying to: bobst (Apr 15, 2007 7:42 am) LOL, good one Bobst! |
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