I haven’t purchased a new car for 17 years. I am finding that every dealer has posted signs stating that they will charge $399 - $799 for document preparation. Did this come during the crazy covid market time? I am also finding published invoice prices that seem too high ($29K on a 30K car). What is the real story about dealer profit margins? Do they really just make it up in the service area?
They don’t make it up in the service area, they charge customers $800 to file paperwork and pay $50 in registration fees. They also make it up with pinstripes, paint sealant and ADP… additional dealer profit just like they always have. The bottom line is… the bottom line! I don’t care if I am paying $800 for title if they knock $750 off the price. Saves me sales taxes. If the number is a good one, I am a customer. If it isn’t and they won’t budge, I walk.
Seems like, to my observation, both new and used prices are dropping, in my area at least.
You can always say NO and walk out the door.
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Just so I’m clear, you mean a $29K markup, total $59K? I’ve seen that once or twice. I’m now seeing some listing at below MSRP. But I’m also seeing prices listed as “SRP”, no ‘M’, and they are too high.
Why is that any of your business? Do you ask your dentist what his profit margins are? Does the grocery store publish a document showing what they pay for a pound of green beans? Do you have a discussion with your accountant about how her hourly fee breaks down?
There are so many back-end incentives, hold backs, etc that dealer invoice doesn’t mean much. The price of a car is what the market will bear, so shop around and buy from a place that you feel good about. That may be the lowest out the door price, it may not.
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I paid a $400 document fee in 2000 when I bought a used car.
I paid a $250 document fee in 1991 when I bought a used truck.
This has been common practice in my area for decades. This the dealer’s administration fee only, the buyers in Nevada pay the title and registration fees directly to the DMV.
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I live in Minnesota and the amount a dealer can charge as a documentation fee is controlled by state law. It’s currently $275 and increases to $350 on July 1, 2024. When I bought my most recent new vehicle in April of 2023 it was only $125.
+1
The bottom line price can vary considerably, from one dealership to another. When I bought my current vehicle, in November 2022, I was outraged by the $5k “ADP” from the dealers closer to my home. To add insult to injury, one of those thieving dealerships offered me only $1k for my pristine trade-in.
By driving 70 miles, I found a dealership that didn’t add any ADP, and which offered me $7,500 for my trade-in. With that type of pricing differential, I wasn’t about to balk over an administrative fee for documentation, but that dealership’s doc fee was essentially the same as the other dealerships.
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Car Dealer Doc Fee by State – 2024
We’ve also included the average title and registration fee you should expect to pay in each state.
State Average Doc Fee Title Fee Total Registration Fees More Info
AK $299 $15 $245 More info
AL $489 $18 $393 More info
AR $129 $10 $28 More info
AZ $499 $4 $564 More info
CA $85 $25 $524 More info
CO $699 $7 $595 More info
CT $599 $25 $180 More info
DC $300 $26 $185 More info
DE $475 $35 $45 More info
FL $999 $75 $297 More info
GA $599 $18 $20 More info
HI $395 $5 $78 More info
IA $180 $25 $333 More info
ID $399 $14 $126 More info
IL $347 $155 $151 More info
IN $199 $15 $38 More info
KS $499 $10 $80 More info
KY $450 $6 $26 More info
LA $425 $77 $64 More info
MA $459 $75 $60 More info
| State | Average Doc Fee | Title Fee | Total Registration Fees | More Info |
|---|---|---|---|---|
| MD | $499 | $100 | $187 | More info |
| ME | $499 | $33 | $40 | More info |
| MI | $260 | $15 | $128 | More info |
| MN | $125 | $8 | $69 | More info |
| MO | $565 | $9 | $57 | More info |
| MS | $425 | $8 | $719 | More info |
| MT | $299 | $12 | $237 | More info |
| NC | $699 | $56 | $370 | More info |
| ND | $299 | $5 | $123 | More info |
| NE | $299 | $10 | $83 | More info |
| NH | $375 | $25 | $51 | More info |
| NJ | $695 | $60 | $271 | More info |
| NM | $339 | $3 | $60 | More info |
| NV | $499 | $20 | $49 | More info |
| NY | $175 | $50 | $146 | More info |
| OH | $250 | $15 | $31 | More info |
| OK | $289 | $11 | $100 | More info |
| OR | $150 | $106 | $169 | More info |
| PA | $449 | $58 | $39 | More info |
| RI | $399 | $53 | $58 | More info |
Our Ford dealer only charges title, tags, salea tax. Best price is on the tag in the windshield. No haggle but fair prices.
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No, I mean it suggests that the dealer paid $29K for a car he sells for $30K. I don’t believe it.
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OK, now I get it. Used to be that ‘invoice’ price was more meaningful, but now there are so many other ways the carmakers compensate the dealer (as noted above) the invoice price really doesn’t mean much. Comes down to getting the best price you can from 2 or 3 dealers (good luck finding ones not owned by the same company).
I haven’t purchased a new car in even longer than that, but I doubt the fundamental economics have changed. The dealership insisted to charge for doc prep fees, I insisted they not. We reached a mutually agreeable total charge, no doc fees. So whether I won on that point? I expect I lost, still had to pay, but just not a separate line on the invoice. Have you ever been in a business situation where you can’t seem to get the other party to cough up a single dime? The claim being there’s no money in the budget. But if you change the wording for what you need it for, all of a sudden there is plenty of money in the budget, & you can get as much as you like? … lol
It is well-known that some car dealers pull major tricks on their customers, sometimes even leading to racism and sexism in their pricing. Thus, the customer needs to gather any protection possible just to prevent a total waste a lot of time and energy dickering. For those of you for whom money is no object, I recommend using a buying service to get a small discount.
I suspect that sales tax is usually charged on the doc prep fee.
I live in Minnesota too and I have never noticed a fee for that. To me though the bottom line is the only important figure. It’s the price out the door. It’s like looking at a hospital bill where a bandage is itemized for $50 when it is $2 at the drug store. The only important figure is at the bottom called total.
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I agree. So keep it simple. If Main Street Oldsmobile will see me a W-30 Cutlass for $29,000 and Boulevard Olds will sell me the same car for $27,000 I’ll buy it from Boulevard. It doesn’t matter what the invoice price is or what the document fee is or how they got to that price.
I don’t think there’s anyone on this forum for whom money is no object. 
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Let’s be honest, there are some folks who get a new car bug, they will fall in love with a specific make and model and there will be nothing that can deter them from buying that one dream machine. They will forgo the rent, the groceries, the insurance, and this is not even considering the family, or even the family dog…
If you do not want to “pay the piper” then forget your dream car and buy one you can afford, one that you do not have to question the fees and add-ons; one that will let you pay the rent, feed the family, insure the vehicle, keep the family heathy (medical and dental…), and get your dog its shots…
Unfortunately, I am writing to the wind, they have stopped reading a long time ago and are probably surfing YouTube, watching videos of that dream car or on the dealer web site, drooling over the options that they can never afford anyway…
I do not know what they think is worse, never having the opportunity to buy that drema car, or having it repossessed for all those missed payments and still own thousands of dollars on that loan and having no car at all…
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Are you kidding me? A car is a machine which takes me and my cargo where I need to go. My “dream car” is whichever one which will perform the necessary function for the lowest monthly cost of ownership. And the very idea of writing a check each month for something which goes down in value the longer I own it is something that I can’t wrap my head around.
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I am not sure if you agree with me or disagree with me. I am saying no vehicle is worth the cost if you have to give up everything else or put yourself into financial ruin to buy that dream vehicle. And when I refer to the “Dream Car” I am referring to a vehicle that is so expensive to buy, to operate, to insure, to maintain, that if is a burden to your life…
I also know that some folks consider a car a status symbol, an extension of their ego, and without that symbol, they feel deprived and will do almost anything to achieve it…
As the old saying goes, “If you have to ask, you cannot afford it…”
And much of this posting has to do with various fees that dealers add on to increase their bottom line. I have written it before and I’ll write it again, the only expense that is not negotiable are the title and registration fees.
Everything else is negotiable. Yeah, even the taxes, they may be locked in based on what your state and municipality charges, but the actual tax is based on what you’ve negotiated as the final purchase price. If you do not want to pay so much in tax, then don’t pay so much for that car…
Every fee is negotiable, they dealer may say the cost is such and such; then you say I appreciate that but I am only willing to pay “X” number of dollars for this car…
So you tell the salesperson, if you are locked into that document fee, then you need to lower the price of the car…
And then you write the price again on a piece of paper with your phone number and get up, thank them for their time and if they are willing to sell you that car for that price in the next few days, you might still be interested, but you are not going to be siting at home, pining over that car, but you are in a car buying mood and you will be visiting other dealers in the area…
The rule is, “S/he who cares the least, wins…”
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Nothing to do with Covid directly - But everything to do with supply and demand. Covid may have been the catalyst that caused a lot of the shortages, but there have been other things in the past (and future) that caused/will cause a supply problem. By charging many of these fees to the customer increases the dealers profit margins. Dealer profit margins on new cars have doubled (more depending on vehicle and location) since before Covid.
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