Pesky new car dealer fees

[Quattro Pete]

Talking numbers with a local (Michigan) car dealer, I see his quote includes:
- Government Fee: $290
- Proc/Doc Fee: $260

I try to get him to drop these. He claims these are required by law and he has no control over them, and won't tell me what exactly they cover.

I know license/registration fees are buried in there somewhere, which is somewhere around $250-ish currently, and I don't mind paying that part.

Just curious if anyone recently bought a new car in Michigan and what fees you had to pay.

 

[tyman]

Documentary Fee Maximum (DIFS document)​

January 13, 2023: the Documentary Preparation Fee for 2023 and 2024 has been adjusted to $260.

The Director has reviewed the documentary preparation fee adjustment and has determined the maximum shall be adjusted to $260.00, which reflects the cumulative percentage change in the consumer price index for the past two calendar years. Accordingly, the documentary preparation fee shall not exceed 5% of the cash price of the motor vehicle or $260.00, whichever is less.

Also see DIFS bulletin 2023-01-CF for information. DIFS will next review the maximum allowable doc fee amount in mid-January 2025.

Can Fees Be Negotiated?​

It’s complicated. We can, for instance, negotiate on the vehicle’s price within reason, which can in turn lower the amount of the fees you pay. However, we cannot generally negotiate the fees themselves (which is especially true of sales tax).

They're not "required" in the sense that you have to pay it outside of the vehicle price but they're required in that the dealer has to file the documents/paperwork and whatnot but they do have a max cap of $260 on them. Also, the dealer "can" eat them as part of the purchase or split them but some dealers choose not to. When we bought our CR-V new, our dealer wanted $290 for doc fees...I said I'd split it with them cuz I know they gotta feed their kids too but I wasn't going to pay the full $290. They said, okay, we'll split the cost and knocked the $145 off the price of the vehicle as part of the sale.

 

[skyactiv]

Ohio regulates it to $250, which includes the license and registration.

I pondered buying a VW Alltrack from Alexandrea VW in Virginia maybe 5 years ago. That dealer had a doc fee of over $700. I looked into the expensive fee and it seems there is a Virginia auto dealers association that colludes to charge the same exorbitant fee.

 

[dishdude]

That's actually a reasonable doc fee.

Is the gov fee a real state required MI charge? Maybe one of our Michigan residents can weigh in.

 

[Quattro Pete]

Ohio regulates it to $250, which includes the license and registration.

Yeah, I don't think the doc fee includes license and registration here in MI. It's just pure dealer profit.

 

[Quattro Pete]

Is the gov fee a real state required MI charge? Maybe one of our Michigan residents can weigh in.

That's what I'm wondering, too. I could not find anything about it by googling. My guess is it's to cover title/tag/registration which would be legitimate, but I may be wrong.

 

[mosaud1998]

DOC Fee in IL is $347.47
EVR is $35
New plates and registration is $306~

 

[harbor]

One of my daughters is in the market for a new car, and we’ve been finding dealer add-ons around $1K over and above the doc / processing fees.

 

[Quattro Pete]

One of my daughters is in the market for a new car, and we’ve been finding dealer add-ons around $1K over and above the doc / processing fees.

Oh yes, this one had a bunch of add-ons listed as well (extended warranty, extended Sirius subscription, etc.). I got him to drop these, but those two fees that I listed in OP (govt. fee and doc fee) remain.

 

[RooflessVW]

Those fees are low

 

[2005jettatdi]

Talking numbers with a local (Michigan) car dealer, I see his quote includes:
- Government Fee: $290
- Proc/Doc Fee: $260

I try to get him to drop these. He claims these are required by law and he has no control over them, and won't tell me what exactly they cover.

I know license/registration fees are buried in there somewhere, which is somewhere around $250-ish currently, and I don't mind paying that part.

Just curious if anyone recently bought a new car in Michigan and what fees you had to pay.

The fees are NOT mandatory, except, if the dealership charges a document fee to anyone they must charge everyone the same amount. It is just extra dealer profit that is not subject to sales tax. The dealers negotiated this with legislatures across the nation quite a few years ago in order to stop opposing sales tax increases. Often they are $499.99.

 

[MrHorspwer]

Doc fee is legit at $260 but Michigan does not have a "government fee".

Quick way to tell what the dealership is doing is to look at where the fees are added in.

The doc fee and other "dealer adjustments" are taxable. In transactions without a dealer adjustment, selling price + doc fee = total taxable price. If they're adding the "gov fee" to the total taxable price, the money is going into the dealer's pocket, not the state's. It's a dealer price adjustment.

License, registration, and title are not taxed and will be added to the sale total after sales tax is calculated.

 

[Delta]

Ohio regulates it to $250, which includes the license and registration.

I pondered buying a VW Alltrack from Alexandrea VW in Virginia maybe 5 years ago. That dealer had a doc fee of over $700. I looked into the expensive fee and it seems there is a Virginia auto dealers association that colludes to charge the same exorbitant fee.

Yea, when I bought my GTI in 2017 from Sheevy VW in Springfield, VA they charged me that stupid fee. They still came in cheaper than local dealers and were the only ones with a blue 6MT GTI. Oh well.

 

[Spartanfool]

I just bought one here in Michigan in December before the maximum went from $230 to $260. Here's what I paid:

Doc Fee $230
Optional Electronic Filing Fee $24 (Otherwise I had to go to Sec of State to file manually)
Plate Fee $15
Plate Transfer Fee $10
Title Fee $16

Doc fee for GM Employee discount are supposed to be limited to $75 but they refused to cap their fee. I reported them to GM. I had to close by end of the week or a $1000 rebate would expire.

 

[JohnnyG]

The way it was once explained to me was, "It's your contribution to the franchise owners 401K".
That's probably a fair way to describe it, true or not.

 

[Spartanfool]

Also, I spoke to Michigan Department of Insurance and Financial Services at 517-284-8608. They were very helpful in explaining what is and isn't allowed. They are the folks that enforce the Doc Fee law.

 

[Quattro Pete]

Doc fee is legit at $260 but Michigan does not have a "government fee".

Quick way to tell what the dealership is doing is to look at where the fees are added in.

The doc fee and other "dealer adjustments" are taxable. In transactions without a dealer adjustment, selling price + doc fee = total taxable price. If they're adding the "gov fee" to the total taxable price, the money is going into the dealer's pocket, not the state's. It's a dealer price adjustment.

License, registration, and title are not taxed and will be added to the sale total after sales tax is calculated.

Yes, it looks like the "Govt fee" is being taxed, so it's more of a price adjustment than an actual govt fee. How can they get away with being so misleading?

 

[Hillbilly Deluxe]

The best way to get around these stupid add-on fees is to walk away. Just think, if 95% of the people did that, the fees would magically disappear in two weeks.

Also...when you buy a used vehicle from an individual, you don't pay those....

 

[Spartanfool]

Yes, it looks like the "Govt fee" is being taxed, so it's more of a price adjustment than an actual govt fee. How can they get away with being so misleading?

You might want to give the State a call. They don't think highly of dealers lying about what the State fees are. They offered to call the dealer on my behalf.

 

[alarmguy]

The fees are a way for a dealer to have you pay for their cost of doing business = more profit.