[hinckley]

The post is a bit of a rant, a bit of information, and the hopeful start of a movement.

I've bought 20 cars in the past 35 years. I'm in the process of buying #21. About 15 years ago, a new line item began appearing at the bottom of new car sales contracts - Dealer Document Preparation Fee, $99. Since that time, this fee has increased to $400 - $500. And while many of us here scour the internet to be educated on retail and wholesale prices, and then pride ourselves on negotiating invoice +/- $x, how many question the Doc Prep Fee? I do. And I don't pay it. Ever.

Although this fee may have had its genesis in the need for dealers to employ "runners" to pick up new car registrations and license plates at the local DMV, none of that is necessary any longer. Yet the fee continues to grow. When pushed, dealers will admit that it is simply a profit line item. Sometimes it's their only profit. In the business world, we refer to this as a "claw-back" - negotiate one price and then claw-back lost profit thru ancillary profit schemes (older buyers will remember when dealers used to try to charge for undercoating).

Many younger salespeople don't even know how to defend the line item because they never need to. For some reason, new car purchasers have grown accustomed to and accepting of the Doc Prep Fee. But it's not necessary. Here's a typical conversation that I have had:

Me: What's this $395?
Salesguy: That's the Document Preparation Fee.
Me: What's it for?
Salesguy: That's what it costs for us to prepare the documentation for the sale.
Me: You mean it's kinda like buying a $2000 big screen TV at BestBuy, and the cashier telling me that it'll be another $100 to check me out?
Salesguy: Well, we need to get the new car registration and plates from the DMV.
Me: You mean you don't print out the registration on the printer over there and get a new set of plates from the safe out back?

Anyway, you get it. So help me end this lunacy. Don't allow yourself to win the car price negotiation battle and lose the total car price war.

STOP THIS MADNESS. DON'T PAY THE DOC PREP FEE.

One last point. My state, like most states, do not charge sales tax on services. However my state has specifically legislated that they do not consider the Doc Prep Fee to be a charge for any type of service. They recognize that it is simply an added component of the total price of the car and it's taxable in the same manner that the car is taxable.

Mic drop.

[Vitacura]

Of course it is dealer profit but I don't think you will be able to just not pay it, heck many dealers have that fee pre-printed on their forms. What you can do is after you have your selling price, have them deduct their doc fee from that price.

Here in FL it is not uncommon to see $599-$699 doc fees, so three of my last four BMWs I have purchased in the last two years have been from out of state dealers, including CA where they limit the doc fee to $80.

[hinckley]

Originally Posted by Vitacura

Of course it is dealer profit but I don't think you will be able to just not pay it, heck many dealers have that fee pre-printed on their forms. What you can do is after you have your selling price, have them deduct their doc fee from that price.

That's exactly my experience. The Doc Prep Fee is pre-printed so I end up requiring an additional discount to cover the fee. Really, can you think of any other purchase where you agree to a deal and the seller just unilaterally adds more to the price?

[jjrandorin]

Originally Posted by hinckley

That's exactly my experience. The Doc Prep Fee is pre-printed so I end up requiring an additional discount to cover the fee. Really, can you think of any other purchase where you agree to a deal and the seller just unilaterally adds more to the price?

Thats the only way you can avoid the fee (get an additional discount). If a dealer charges that fee, they have to charge it to everyone, or no one, legally. Its regulated in california at $80 (one of the VERY few things thats actually cheaper here than other places).

Since $80 is a fair fee to charge for "documentation preparation" to me, I dont dispute it. If it were 499 I would ask for most of that back in a discount on the car, like you are mentioning.

What you should be telling everyone to do is " Ask for an additional discount to cover the documentation fee!" because thats possible (depending on the dealer of course). You will still have a line item on the contract for it though.

What is NOT possible, is them just removing that line item from the contract entirely. They have to charge you because they charge everyone else.. you can just negotiate it out with an additional discussion / negotiation if they will do it.

[hinckley]

Originally Posted by jjrandorin

Thats the only way you can avoid the fee (get an additional discount). If a dealer charges that fee, they have to charge it to everyone, or no one, legally.

Don't forget that these things are regulated on a state by state basis, so there's no singular way to handle removal of the fee.

[SLOWER]

Agree, you have to take it out of the final negotiated number. I always get to where I want to be, then say ok deduct whatever that doc fee number is, and you've got a deal. They of course say they can't do that, blah blah blah. That's when you give them the old George Costanza.

[hinckley]

Originally Posted by SLOWER

Agree, you have to take it out of the final negotiated number. I always get to where I want to be, then say ok deduct whatever that doc fee number is, and you've got a deal. They of course say they can't do that, blah blah blah. That's when you give them the old George Costanza.

Ah yes, there is a Seinfeld scene for every problem in life.

And yes again - I just concluded my deal for a 440. We agreed on a price and the paperwork came back to me with an added $335 for doc prep. They couldn't remove the line item, but they did increase their discount by the same amount. I just don't know how this modern bogus "undercoating" fee has become so accepted. I better be careful though, or I'm going to have to find a rageaholics meeting.

[ggrr8t]

Always wondered how it was done. So they have sets of plates already and simply make an online request and print it out?

[hinckley]

Originally Posted by ggrr8t

Always wondered how it was done. So they have sets of plates already and simply make an online request and print it out?

That's how it works in Massachusetts. Dealers have unassigned sets of plates locked away and they go online to assign them and to print out a registration. I presume most other states are similar.

[ipilcher]

I don't consider myself a great negotiator, but even I know to negotiate the "out the door" price.