The end of the year …\u00a0 time to review, cull, and shred old case files.\u00a0 A veritable trip down memory lane, reminding me of all the clients I helped and those I was unable to help.<\/p>\n
Some of those old files contain purchase orders and financing contracts for cars.\u00a0 Just on a whim, I pull them out and start perusing the columns itemizing the elements of the car purchase.\u00a0 Down towards the bottom is an item usually labeled “Documentary Preparation” or “Documentation Fee.”\u00a0\u00a0 The amount of the so-called “doc fee” is usually pre-printed on the dealer’s paperwork.\u00a0 That’s done to suggest that it is a government-required and non-negotiable charge.\u00a0 It isn’t.<\/p>\n
Here’s one from 2001 from Dartmouth Dodge.\u00a0 The doc fee is $195.\u00a0 Here’s a real nostalgia item,\u00a0 from an Abington used car lot in 2004\u00a0 — just $50.\u00a0\u00a0 Another small used car lot in Somerset in 2008: $99.\u00a0 Route 6 KIA, 2011:\u00a0 $289\u00a0 — printed in red, nice touch.\u00a0 McGee Chevrolet, 2010:\u00a0 $390.\u00a0 But the king of the doc fees, hands down, is Empire Hyundai, which since at least 2008 has been charging $495.\u00a0 It’s printed in bold type right above the $29 Inspection fee, which really<\/em> makes it look like a required third-party payment.<\/p>\n What is a “doc fee”? It depends whom you ask.\u00a0 McGee Chevrolet’s invoice uses the alternate term “customer service fee” to describe the $390 charge, while Route 6 KIA uses “Seller’s administration fee.” \u00a0Sometimes dealers claim that it’s for filing required documents with the Registry of Motor Vehicles.\u00a0 But that can’t be,\u00a0 because those charges are itemized separately.\u00a0 Sometimes they say it’s a fee charged to the dealer by the lender who buys the installment sale contract.\u00a0 That is inconsistent with the fact that the dealer charges the fee whether or not it is arranging financing.\u00a0 Sometimes they say it’s for the convenience of taking care of the registration paperwork rather than making you go to the Registry yourself.\u00a0\u00a0\u00a0 How much is that convenience worth to you?\u00a0\u00a0 In a case brought by the Ohio Attorney General’s Office, charging that a dealer’s “delivery and handling” fee was unfair and deceptive, the defendant dealer was claiming that the fee covered everything from key duplication, file folders, inspecting and detailing the car, and paying property taxes and insurance on vehicles in the dealer’s inventory.\u00a0 So it depends whom you ask, but the problem is, most buyers never ask at all.<\/p>\n The bottom line is that the “doc fee” is an additional charge for the dealer’s overhead.\u00a0 That’s deceptive. \u00a0 In the American marketplace, it’s generally understood that a quoted price includes the seller’s administrative overhead and profit margin.\u00a0 If carrots are $1.99 a pound, you don’t expect the cashier to add on 30 cents for the store’s refrigeration system! \u00a0 If blue jeans are labeled $40, you wouldn’t pay an extra dollar to the clerk for cutting off the security tag!\u00a0 Adding a “doc fee” to the agreed-upon price of a car amounts to the same thing.\u00a0 And as this practice has gone on unchallenged for years, the money involved has grown from a nuisance to a substantial burden.\u00a0 No one I know would suggest that a $495 bump-up in the price of a car is trivial.<\/p>\n Why doesn’t someone sue to stop this?<\/p>\n Well, to be worthwhile, a case would need a plaintiff buyer who was misled as to some aspect of the charge:\u00a0 that it wasn’t advertised, was slipped in after a bottom line was negotiated, was falsely misrepresented as being mandatory, or whatever.\u00a0\u00a0 But often, in the fog of car buying, juggling the trade-in value, trade-in payoff, manufacturer’s rebates, GAP, VSI, and other unfamiliar acronyms, customers just don’t see, don’t ask, and don’t try to negotiate the fees proposed by the dealer.\u00a0 Sometimes they don’t even try to read through the finance contract, beyond the disclosure of the monthly payment.\u00a0 If you don’t appear to care about the price, it’s hard to complain you were overcharged.<\/p>\n In 2012, resolve to be a smart car buyer.\u00a0 Read the contract and question the fees, especially the big ones, starting with the “doc prep” fee.<\/p>\n","protected":false},"excerpt":{"rendered":" The end of the year …\u00a0 time to review, cull, and shred old case files.\u00a0 A veritable trip down memory lane, reminding me of all the clients I helped and those I was unable to help. Some of those old … Continue reading