No matter what you call it Buyers generally don't like it and Sellers never really seem to explain it. Here is a tidbit of information about those fees that is related to Virginia. Hopefully this link will work properly.
Once you open the .doc file you will want to look for the section titled: "LABELS MATTER" and in that section I think the most important section for the consumer to make note of is in paragraph 6.
1st let me say you are going to love this car. I feel like a rock star when I'm driving it. People will follow you to your work to lunch its kinda freaky.
any way
MSRP $18475 Loaded Cabrio
$349 to wash the car and fill the gas tank and print some paperwork they must use good paper and don't forget the stamp to mail this paper work to the DMV.
$564.72 Title tax
$10 online filing fee
$37.65 Dealer Bus Licence Tax
$2 temp tags
$283.75 License fee & Title fee
Total $19722.12
$-2500 on my credit Card
$-1600 Cash
$-99 March 17 deposit
$15523.12 Bank check
$298 payments each month 5.74% interest
I could not find any reference in the DMV or the MVDB about separate fee for the bus license tax and online fee.
Its been a while since I bought a car but why do we have to pay the dealers bus lic tax? And what the heck is this online filing fee.
So in truth the real doc fee from SCAlexandria is $397.
Virginia law allows a dealership to charge a processing fee, provided notification of the fee is properly posted, the fee is properly listed on the buyers order, and the amount is filed on a form of the buyers order with the Motor Vehicle Dealer Board. The law has no provision to allow a dealership to charge a document fee, a consumer services fee, a dealer administrative fee, or any fee other than a processing fee.
Dealers in Virginia are fortunate that the state legislature has allowed dealers to make their own business decisions as to the processing fees they charge, provided the fee is properly disclosed. It is important to protect that privilege. Dealers in other states that have not protected that privilege have found their abilities to charge processing fees either eliminated or severely limited. Protection requires some very basic steps:
1. Make your own independent decision whether you will charge a processing fee and, if so, the amount of the fee. Do not agree with other dealers as to the amount and to not discuss it with other dealers. The decision to charge it and the amount to be charged must be an independent business decision of each dealer.
2. Properly label the processing fee. It is a processing fee. It is not doc fee, a consumer service fee, or any other named fee. It should be listed as a processing fee on the buyers order. It should be listed that way in the retail installment sale contract. It should be listed that way anywhere else it appears in the deal. Other terms are not specifically allowed by statute. Other terms can cause confusion and can lead to legal action by plaintiffs’ attorneys claiming the dealerships are charging a fee not allowed by law. If the dealership has delayed changing the term that is printed on retail installment sale contracts and leases by the computer system to “processing fee”, it is time to change that. The law specifically allowing a processing fee was enacted fifteen years ago.
3. Make sure you are in compliance with the other requirements of the law. Post the signs required by the statute. Properly print the processing fee on your buyers orders as required. Properly tax the processing fee as required. File your processing fee with the Motor Vehicle Dealer Board each time you change it.
4. Make sure your employees understand what the processing fee is for. It is not for processing the customer’s credit since that would make it a finance charge affecting APR. Although originally it may have been for work on obtaining tags for the customer and while the language in the statute authorizing it notes that it may be for processing vehicle registration, that language predated the statute that allows you to pass along the charge for electronic registration activities. Consequently, the processing charge is no longer for obtaining a customer’s registration, since the customer pays separately for the service. VADA offers a brochure that explains processing fees. Whether you use the VADA brochure, or your own brochure, have a brochure that explains processing fees.
5. Train salespeople and F&I people. When the processing fee is presented and when a customer raises questions about the processing fee, the explanation of all personnel in the dealership must be consistent. It is not helpful to have twenty different explanations, some of them improper. The processing fee is an amount the dealership is allowed to charge for services provided to the customer by the dealership for which the dealership is not otherwise compensated in the transaction. That is the explanation. Customers who want to know more should be given a brochure or other written explanation.
6. Please note the operative word in the explanation we recommend for the processing fee is that it is a fee the dealership is “allowed” to charge. It is not one that the dealership must charge. It is not one the DMV requires the dealership to charge. It is not a fee that the governor has directed the dealership to charge. It is a fee that the dealership may charge.
I inquired to a salesman what a Processing Fee was and here is the reply:
Good evening. I am copying this information
directly from a form available by VADA (Virginia Automobile Dealers
Association).
What is a Processing Fee?
Some confusion exists about the "processing fee" charged by many dealerships. The processing fee is allowed by Virginia Law. This fee is similar in many ways to the additional fees charged by many other industries. The processing fee does not compensate dealerships for the costs they incur in doing business. As with most businesses, dealerships frequently provide services to customers for the benefit of the customer for which they are not compensated in the sale of a vehicle. Included Items : The sale of an automobile is very complex. Some of the services for which the process fee is charged are : Processing trade-ins, including tracking lost or faulty title and obtaining out of state or bank held titles. Assisting the customer in applying for refunds and entitlements due from traded or newly purchased vehicles. Providing advice concerning vehicle titling options and alternatives and providing assistance for out of state titling, including necessary paperwork and notary fees. Verifying loan payoff balances on trade-ins and insuring loan payoffs are made to the customer's bank. Assisting the customer in notifying their insurance company of the new purchase. Verifying customer identity and information to protect consumers against fraudulent and improper transactions in the consumer's name. Developing alternative payment methods for customers for the vehicle chosen. (Various lease options, cash, and loan combinations) Providing and preparing Power of Attorney forms. Creating and maintaining customer records to assure proper handling of the transaction, assist in documenting the vehicle's history, and insurance a satisfying ownership experience.
*
Well there it is in black and white the crux of information about this so called Processing Fee and it is my personal opinion that this Processing Fee is a LEGAL way for Dealerships in Virginia to overcharge a consumer on processing paperwork and any other reason that they can get away with to make a profit over and beyond the cost of a vehicle that already has a dealer profit margin built into the price of the car, specifically the smart car.
Other States have legislative mandated maximum "Processing Fees" set at a certain price and that is the maximum price the Dealership can charge the customer. I suppose that the Dealerships in those States try and recoup the loss of a mandated Processing Fee to another type of charge or the overall cost of the vehicle?
Many of us will moan and complain about a Doc Fee, Processing Fee, Ripoff Fee... but no matter what it is called when one State charges $50.00 and another charges $399 or more for THE SAME service then I see a problem with the system.
The only solution that I can see is complain and complain loudly and try and get Legislators to pass similar laws whereas the Consumer and the Automotive Dealerships can mutually benefit. I see no reason that a Dealership can charge a REASONABLE charge for a Processing Fee but 'what is reasonable'?
Dealerships bemoan that they have expenses such as property taxes, expensive equipment, people to pay to do the vehicle paperwork processing, insurance, background checks and verifications and are charged transaction fees per each sell of a vehicle. All this is for the consumers benefit so everything can be done at the Dealership and the customer can drive away a happy camper. There will be people who happily pay the high cost of the Processing Fee because they do not want to bother going to the DMV and stand in long lines, have the proper paperwork to do the same thing for FREE that a Dealership does for a charge.
In closing I for one will not be complacent when I purchase my smart car. Automotive Dealerships have had many years to perfect the snake-oil treatment given to customers and they are very good at what they do. Use the internet to your advantage, pick and choose what is believed to be truthful about Automotive Dealerships. Be armed with this information and in this knowledge use it to your benefit as well as you can and if you end up paying these outrageous so called "Processing Fees" then you will have done that on your terms as best you can rather than being a lamb going to slaughter.
I know the feeling about how car dealers gouge customers.
Everytime I go into Costco, with their high costs of maintaining the warehouse, paying for the guy who checks your receipt as you exit without charging a "security fee". Thankfully they don't charge the "parking lot retreival charge" for the service of returning your cart from the parking lot to the store for eventual reuse. And of course there is also that service of samples given out in the aisles that they don't charge a "sampling fee" for that. Natirally, there is the non-existant "scanning fee" for moving your purchases across the scanner at check out, nor a "packaging fee" for moving your purchases back into your cart, sometimes with bags or boxes.
Thank goodness other retailers aren't taking a clue from the auto dealers on how to pad their bottom line with excessive fees.
I know the feeling about how car dealers gouge customers.
Everytime I go into Costco, with their high costs of maintaining the warehouse, paying for the guy who checks your receipt as you exit without charging a "security fee". Thankfully they don't charge the "parking lot retreival charge" for the service of returning your cart from the parking lot to the store for eventual reuse. And of course there is also that service of samples given out in the aisles that they don't charge a "sampling fee" for that. Natirally, there is the non-existant "scanning fee" for moving your purchases across the scanner at check out, nor a "packaging fee" for moving your purchases back into your cart, sometimes with bags or boxes.
Thank goodness other retailers aren't taking a clue from the auto dealers on how to pad their bottom line with excessive fees.
Unbeknown to us all those fees you mentioned are already built in to the price of the items otherwise they couldn't stay in business and make a profit. I read somewhere that bread from the time the seed is planted till you purchase it you have paid taxes on a loaf of bread over a total of 10-15 times.
BTW: I was asked at a grocery store one time whether I wanted plastic or paper bags and I asked why and the cashier said that the store charges a different amount on which one is chosen.
Last edited by Razorback; 03-01-2008 at 12:39 PM.
Reason: Added Information
Yes well all true, however, you dont buy a car every day, like the super market food. If you go 2 weeks without selling something most businesses go out of business. Apples and oranges. Its a free society, capitalism at its best. We are not totally govt controlled yet thank god and socialism does not work where the govt controls everything. The states are free to make laws as they see fit for state commerce. Damn lets get past the fee sh** and complain more and look more as to why the cars are not getting here. It is moving at a snails pace and the major complaint is the doc fees. Give it a break already.
SP,
I must take exception to your comparison to Costco-Been in the food bus all my life. Costco's profit comes primarily from their "membership fees" The annual fee you pay to have the privilage to shop there. They essentially sell their product at a mark up that allows them to pay for the infrastructure you refer too and the profit margin comes from the fees!
I happen to love Costco-I think it's a great concept but don't get confused**-they do charge a fee (admittedly modest) and that fee is the source of their profitability.
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