What is a dealer's "doc fee"?

I have just agreed to buy (but not paid for) a Neon from a local Dodge
dealer here in MI. He has added a $160 "doc fee" and I'm not sure exactly
what this is for. I am doing my own registration transfer and my own
insurance transfer so is this fee for something else? Is this a fair amount
or could I ask for it to be reduced/removed?

TIA

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Document fee = profit. Buy it somewhere else where they don't
charge it. I walked the last time someone tried to pull this on
me after we had negotiated a price that I thought was only plus
Tax Tags and Title.

 

From this page:

http://www.illinoisdealers.com/memberarea/vol02no9.htm

----------
DOCUMENTARY SERVICE FEE FOR 2003: $52.57

The maximum documentary service fee for 2003 will be $52.57. This is
an approximate 2.2% increase in the 12-month Consumer Price Index for
All Urban Consumers issued by the U.S. Department of Labor. The "doc
fee" is subject to Retailers Occupation Tax as part of the gross
receipts of the sale of the car.

Pursuant to 815 ILCS 375/11.1, every retail installment contract under
the Act shall contain or be accompanied by a notice containing the
following information:

"DOCUMENTARY FEE. A DOCUMENTARY FEE IS NOT AN OFFICIAL FEE. A
DOCUMENTARY FEE IS NOT REQUIRED BY LAW, BUT MAY BE CHARGED TO BUYERS
FOR HANDLING DOCUMENTS AND PERFORMING SERVICES RELATED TO CLOSING OF A
SALE. THE BASE DOCUMENTARY FEE BEGINNING JANUARY 1, 1992, WAS $40.
THE MAXIMUM AMOUNT THAT MAY BE CHARGED FOR A DOCUMENTARY FEE IS THE
BASE DOCUMENTARY FEE OF $40 WHICH SHALL BE SUBJECT TO AN ANNUAL RATE
ADJUSTMENT EQUAL TO THE PERCENTAGE OF CHANGE IN THE BUREAU OF LABOR
STATISTICS CONSUMER PRICE INDEX. THIS NOTICE IS REQUIRED BY LAW."

Please note that if your dealership is operating under a Consent
Decree related to documentary fees, the Consent Decree may have
requirements in addition to those set forth in the above law.
------------

Generally it seems that the sentiment about the doc fee is that you
have to weigh the cost of your time to perform the relavent
registrations with your local DMV vs having the dealer do it for you.
Some say that you need to budget for a day off work to do this
yourself.

Other info about the doc fee pertains to some state gov'ts determining
that this fee is essentially an addition to the cost of the vehicle
being purchased and as such, from the gov'ts point of view, is a
taxible item.

A survey of message boards shows that this doc fee ranges from as low
as $50 to several hundreds of dollars. The doc fee seems arbitrary
and in some cases has been increased steadily to a point where 90% of
customers do not complain about it (but apparently 10% do). This
seems to be somewhere between $150 and $200.

Click and Clack said this in 1994 regarding a question about a $40 doc
fee:
http://cartalk.cars.com/Columns/Archive/1994/June/05.html

"Actually, it's short for "Documents Fee," which is what the
dealership charges for standing in line at the Department of Motor
Vehicles to get your license plates and registration."

See also:

http://cartalk.cars.com/Columns/Archive/1998/June/14.html
http://tax.state.nv.us/taxnew/documents/ntn041998.pdf

I guess if you follow the rule of thumb that the price of things
double every 10 years then a $40 doc fee in 1994 would be $80 in
2004...

 

Thanks. I also found this:

http://www.michigan.gov/sos/0,1607,7-127-16302-38608--F,00.html

What is a "document fee"? Do I have to pay it?

Answer:
Michigan law allows a licensed vehicle dealer to charge customers a
"document fee" of $160.00 or 5% of the vehicle purchase price, whichever is
less for completing the paperwork necessary in a sales transaction.



Public Act 699 of 2002 can be found on the Michigan Legislature's
website at:
http://www.michiganlegislature.org/documents/2001-2002/publicact/pdf/2002-PA-0699.pdf



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And this:

http://www.thetimesherald.com/news/stories/20021214/topstories/575432.html

"Lawmakers let dealers raise auto paperwork fees"

 

you can try but don't count on it seems the lawmakers allowed the lobby to pass
a law allowing dealers to charge this fee for paperwork including used car
dealers

 

The key word there is "allowing". If it's not mandated by law - it's
negotiable, but be prepared to walk away from the deal if they won't
budge on it.

 

Once at a Mazda dealer I was getting a rough quote worked up on a Protégé 5
and they added a document fee. When we asked he admitted that it was just
another way to get money.

 

It is a fee that is allowed by law in several states-it allows the selling
organization-not only a dealer but any selling organization that has to
process credit applications to charge a fee for the service. This is not
limited to the Automobile Industry-and definitely not limited to
"Dealerships".

Washington, my home of record, does not allow such a fee--but if you want a
good deal from the big dealer in Idaho--you will pay the fee!