After so much research, thinking, discussions, numerous visits made to dealers showroom you zeroed down the car you want to buy. Then the D day comes when you went to the showroom to buy your dream car. After hours of negotiation all settlements have been done, you are about to sign the final documents. Within few minutes that shinning twilight purple metallic 4 wheel machine will be yours.
But as you read the papers and go down you will spot a fee of $595 which you were not aware with an unfamiliar phrase describing it as “Dealer Service Fee” or some call it “Delivery Fee” or some car dealers charge it as “Document Fee” or “Doc Fee”.First reaction of yours will be “What’s this is for?” ”Nobody told me about this earlier!”
If the dealer from whom you are buying the car doesn’t have
a Full Disclosure Policy, will not disclose this fee earlier. It will be introduced at the last moment. Exhausted you after spending half of the day in the showroom waiting for the deal to be closed, car to be ready, will pick up the pen and will sign after little bargain.
But do you have to?
Is it necessary to pay this fee? And what exactly is this thing called a “
Document Fee?”
It’s easy to answer the second question first. “Doc Fee” is a cost charged by dealers for preparing the documentation at the time of new car buy. To some extent, this is legit. We may not have given attention to it but there are line of people from lower level to high cadre whose job is to see that all the documents submitted dealing in car sale purchase are in correct order and accurate. So this is their labor fee. But being frank it also includes the profit margin of the dealers. In some cases it is huge, means huuuugee!!
Doc fee varies from location to location. In some places it ranges from from $295 to $695 whereas in some other it can cost up upto $2000. So it is clear the ones who are paying such huge doc fee the dealers of that area are earning huge profits. But to my surprise, in some states doc fee is being regulated by the state and can be charged maximum to $50. I am sure there will be some areas where NO “Doc Fee” is charged on new car purchase.
But the question arises how the car dealers get away with this? It’s pretty simple if all the dealers in your area will charge the fee. It will be horrible inconvenient for you to go and buy new car from some other state. So customers pay the fees demanded by the dealers.
But more important question is. Do you really need to pay this FEE?
It all depends upon dealerships in that particular area. In my experience 99 out of 100 dealers charge it so one left out will start charging it eventually. And if ardent customer refuses to pay that Doc fee, the dealers refuse to sell the car and you have to go home without your dream car. As a customer you can only equalize this not so required fee by doing good bargain in getting discounts from the car dealer. Like ask for $595 discount or equivalent free car accessories to make up for the $595 doc fee which you have to pay.
Now here comes the rider and the hidden cost. If you think you have managed to land an awesome deal for yourself. A deal which may only be break even or cost to cost for the dealer. You may still be required to pay the doc fee and this might be the only fees that the dealer would be earning on the deal. This might be the money that might be allowing him to stay in business and the dealer’s only profit source. Now you might think that is not a fair business practice and borders on the business ethics as all fees and charges should be disclosed to the customer before closing the deal. The customer should raise his voice for the deceptive tactic used by some. We provide a full disclosure and all charges and transaction costs are laid in front of the customer beforehand so that they do not feel cheated and shortchanged later on when they sign the cheque.
Bottom line is that don’t get caught off guard by this Fee introduced by dealer at last moment. Expect such thing to happen and be prepared to deal with them. Be upfront and ask your dealer for all the prices included in the final cost.
Good luck!
About The Guest Author:
Sofia Williams writes for Mark Kia. She is a freelance content contributor and likes to write about various spheres like Social Media, technology trends and her secret favorite – cars and automobiles. She is a keen observer and contributor for various auto forums and the online auto space.
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