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Is this "processing fee" legit?

  • Yes, this is a legitimate fee. Should be higher.

    Votes: 3 6.3%
  • Not a legitimate fee, but they do need to make a profit.

    Votes: 7 14.6%
  • Sounds kind of bogus to me.

    Votes: 20 41.7%
  • Now I know where the term "stealers" comes from! :mad:

    Votes: 18 37.5%
1 - 20 of 32 Posts

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Double Bimmers
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Discussion Starter #1
So when I odered my car I agreed to pay a set amount over invoce, but now I am told there will also be a $198 "Processing Fee"!

Here are the items:
Invoice & MACO
Dealer Mark-up or "Profit"
Tax
Title/Tag transfer
!!!Processing Fee!!!

Jon, tell me it is not true... my good dealer is attempting to take advantage of me!

Is this "Processing Fee" just a another way of getting $200 more out of me, or is this are real cost that should be included in the invoice cost of the car?
 

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Bimmerfest Founder
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15,265 Posts
Lets's hold a kangaroo court here...

What do you think?


:dunno:

:banghead:

Please vote in the poll...
 

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CD-55 said:
So when I odered my car I agreed to pay a set amount over invoce, but now I am told there will also be a $198 "Processing Fee"!

Here are the items:
Invoice & MACO
Dealer Mark-up or "Profit"
Tax
Title/Tag transfer
!!!Processing Fee!!!

Jon, tell me it is not true... my good dealer is attempting to take advantage of me!

Is this "Processing Fee" just a another way of getting $200 more out of me, or is this are real cost that should be included in the invoice cost of the car?
Hi CD-55 -- I will defer to Jon's wisedom, but my dealer also had something like that, and it was actually printed on the purchase order so they can point to it and say it's non-negotiable, yada yada. The breakdown was something like computer fee, document fee and one other thing I can't remember. In my case I had also negotiated a invoice plus price, and when he tried to slip that through I objected. I was pretty sure I could've convinced him to take the whole thing off (so it's definitely fully negotiable) but to be nice, and because I had already gotten a great deal, I offered to split it with him to close the deal. After all, I didn't want to spend another minute arguing over the price and he didn't want me to walk at that point either. Anyways, just my 2 cents.

Any chance the Don Juan will be docking tomorrow? the website says docking on the 9th . . . almost here . . . .
 

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Double Bimmers
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1,176 Posts
Discussion Starter #4
Hey nice poll you added there Jon!

Anyway if it is legit, then I would assume it is a fee tacked onto every sale at the dealership, but if that is the case, then when we worked the deal, it should have been disclosed to me!

I do not think it is legit, so I hope that all I will have to do is ask them to remove it.
 

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Bimmerfest Founder
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15,265 Posts
For what it's worth, we charge a $45 doc fee - which is what
all other california dealers charge...
 

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Double Bimmers
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Discussion Starter #6
Jon Shafer said:
For what it's worth, we charge a $45 doc fee - which is what
all other california dealers charge...
I see on my 2001 330Ci I paid $67.50.
 

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I didn't pay ANY fees. There were there but I told the dealer to take them out. I mean they have to do SOME work for making all this money on you. Mailing some form or punching something in a computer is part of their work towards this profit. Just disagree. Do you think they are not going to sell you a car and keep it on a lot until they find some buyer for it and start all the paperwork from a scratch again? All this trouble for $200? I don't think so...
 

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Color blind photographer
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Virginia law allows these fees to be charged and that amount is the current limit. Step across the border and MD also allows the processing fee but the current limit is $25. One more reason I bought in MD, though the real reasons were a much better deal and the dealership treated me respectfully and actually knew something about what they were selling.
 

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I negotiated a great price with a dealer in N.Va but he wanted to add a $200 processing fee on top. When I quizzed him about it, he said he was "required" to charge it by Virginia state law. Anyway, I got the same price from a MD dealer without the processing fee.

I wasn't charged the MACO fee either but that may be because I'm doing European delivery.
 

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CD,

Every dealer in VA charges this. Fairfax is 190 something, and Sterling as per you is 160. MD dealers do not have this.

VOB as far as I know does not have one and Passport is 25 dollars.
 

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If the dealer is registering the car and getting plates for you, they would pass through that fee. In addition, they usually use a service bureau<sp?> to actually do this, and they charge a fee. I also don't doubt that they (the dealer) tack on something on top of that. This is how it usually works in NY.

I would make them break out the fee. If they can't justify it as payments to necessary outside parties, refuse to pay it.
 

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A sudden sense of liberty
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Ben Chou said:
CD,

Every dealer in VA charges this. Fairfax is 190 something, and Sterling as per you is 160. MD dealers do not have this.

VOB as far as I know does not have one and Passport is 25 dollars.
They gave us the same song and dance when we bought our VW in Springfield: $198 fee, non-negotiable, etc. Within ten minutes, it had been waived. Don't pay that fee. It's crap. Threaten to walk if they don't agree to waive it. As painful as it would be to wait again, it's worse to allow the dealer to slip in extra fees at the last minute, when they think they have you over a barrel. Remember, you want the car, but they also want you to buy it. If you don't, they have a somewhat oddly specc'ed 330 that they have to sell.

FWIW, Passport charged me the $25 document fee and no MACO or other miscellaneous fees of any kind. When I signed the papers, the deal (as agreed) was $1800 plus the invoice price of the car plus $25 for the documentation plus VA state sales tax. Nothing else.

I didn't realize until later how fortunate I was to have chosen Passport as my dealer.
 

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I like cookies.
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JST said:


They gave us the same song and dance when we bought our VW in Springfield: $198 fee, non-negotiable, etc. Within ten minutes, it had been waived. Don't pay that fee. It's crap. Threaten to walk if they don't agree to waive it. As painful as it would be to wait again, it's worse to allow the dealer to slip in extra fees at the last minute, when they think they have you over a barrel. Remember, you want the car, but they also want you to buy it. If you don't, they have a somewhat oddly specc'ed 330 that they have to sell.
Sorry, I'll disagree here.

It is not worth walking on a deal because of a standard processing fee as minor has $198. Urge them to waive it, but don't walk over this paltry sum.
 

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A sudden sense of liberty
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nate328Ci said:


Sorry, I'll disagree here.

It is not worth walking on a deal because of a standard processing fee as minor has $198. Urge them to waive it, but don't walk over this paltry sum.
It's not a paltry sum; $200 is a fair amount of money. But the thing that is motivating me is the underhanded fashion in which the "fee" was inserted. If I negotiate a deal for, say, $1400 over invoice, I expect that when I sign the papers, the deal will be $1400 over the invoice price of the car (plus taxes, of course). Document or processing fees of less than $100 might not upset me in that circumstance, but if there's a $200 processing fee, I want the dealer to tell me that up front. Suddenly a $1400 over invoice deal becomes a $1600 over invoice deal, and maybe there were other dealers that could have done better than that.

The worst part of this is that in addition to the "processing fee," it sounds like the dealer is ALSO charging MACO and some other fees. It's hard to negotiate if the presumptive $1400 over invoice deal suddenly becomes 1800 or 2000 over when you add all the fees in.
 

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Formerly CCs328Ci
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JST said:


It's not a paltry sum; $200 is a fair amount of money. But the thing that is motivating me is the underhanded fashion in which the "fee" was inserted. If I negotiate a deal for, say, $1400 over invoice, I expect that when I sign the papers, the deal will be $1400 over the invoice price of the car (plus taxes, of course). Document or processing fees of less than $100 might not upset me in that circumstance, but if there's a $200 processing fee, I want the dealer to tell me that up front. Suddenly a $1400 over invoice deal becomes a $1600 over invoice deal, and maybe there were other dealers that could have done better than that.

The worst part of this is that in addition to the "processing fee," it sounds like the dealer is ALSO charging MACO and some other fees. It's hard to negotiate if the presumptive $1400 over invoice deal suddenly becomes 1800 or 2000 over when you add all the fees in.
thats is a perfect explanation..and I agree with you 100%
 

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Car Junkie
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I also disagree with the "walk away" approach. The $200ish fee is meant to cover the various administrative costs associated with registering the car, licensing it, etc - I'm not intimately familiar with the details there. Just about every dealership in Northern VA has this fee, and many of them very clearly post a sign with the words "$200 PROCESSING FEE" in the sales office.

While negotiating a price for my wife's Civic, I made sure that I figured the fee into my final price. I also made sure to ask about any fees while working on a price on my 330Ci. Basically I took whatever price we were working on and added the $200 to reach the "real" price of the car. Maryland dealers charge about $25, and one of them just quoted me a price that included the fee.

The only exception to this rule was Auto Advantage, the pre-owned dealership from which I bought my M3. They have a $0 processing fee because they claim to do all of the paperwork in person at the DMV. Whether that's true, I don't know. They charge somewhat high prices for their used cars, so perhaps they just roll the processing into the price.

IMO, the $200 is something that any buyer should have in mind while shopping for cars in VA. I honestly don't know how much of that is profit but I would just figure that into the final price of the car. Hunter, don't take this the wrong way...but you should have thought about that before agreeing to a price. On the other hand, I'm a bit surprised that the salesman didn't make sure you knew about it before signing the paperwork.
 

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I like cookies.
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JST said:


It's not a paltry sum; $200 is a fair amount of money. But the thing that is motivating me is the underhanded fashion in which the "fee" was inserted. If I negotiate a deal for, say, $1400 over invoice, I expect that when I sign the papers, the deal will be $1400 over the invoice price of the car (plus taxes, of course). Document or processing fees of less than $100 might not upset me in that circumstance, but if there's a $200 processing fee, I want the dealer to tell me that up front. Suddenly a $1400 over invoice deal becomes a $1600 over invoice deal, and maybe there were other dealers that could have done better than that.

The worst part of this is that in addition to the "processing fee," it sounds like the dealer is ALSO charging MACO and some other fees. It's hard to negotiate if the presumptive $1400 over invoice deal suddenly becomes 1800 or 2000 over when you add all the fees in.
Relative to the total transaction cost, $200 is very minor. One hour of work for an experienced lawyer? Somewhat trivial when compared to the car's price.

Maybe CD (and you) should have discussed fees with your dealers before agreeing on a price. But $1400 over invoice, I would take that to mean the cost of the car itself (independent of fees) If state law allows them to charge the fee, you can bet that most dealers will take advantage of it...
 

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A sudden sense of liberty
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nate328Ci said:


Relative to the total transaction cost, $200 is very minor. One hour of work for an experienced lawyer? Somewhat trivial when compared to the car's price.

Maybe CD (and you) should have discussed fees with your dealers before agreeing on a price. But $1400 over invoice, I would take that to mean the cost of the car itself (independent of fees) If state law allows them to charge the fee, you can bet that most dealers will take advantage of it...
$200 will buy you a pretty cheap lawyer.

And I don't think you should think of it in terms of the total transaction price. The dealer is the one getting this money, so it's the dealer's pockets being lined. At the outset, CD and the dealer agreed on an amount that he would give the dealer as profit. Depending on what that amount was, the addition of this fee could increase that profit by 10-15 percent. Ten to fifteen percent is a big deal.

I agree that everyone should lay everything on the table at the outset, and I suppose consumers should ask about fees at the beginning. But at the same time, it's pretty sad when the onus is completely on the consumer. "So, we've got a deal, but are there any other hidden costs that you're going to try and screw me with later?"

IMHO, good business practice for the dealer would be to disclose, of their own accord and without prompting, the existence of such fees, ESPECIALLY when they are that large. If it were me, I'd be interested in teaching that lesson in forthrightness to the dealer in the only way they understand: through the use of economics.

And I wouldn't let the dealer give me this "state law" crap. State law allows the dealer to charge whatever they want for the car itself, but that doesn't mean they do. Just because the state caps the fee at $198 doesn't mean they have to charge it. The "processing fee" is pure profit, and nothing more.
 

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JST,

I agree with you on the processing fee. I turned down a deal from Fairfax for my friends car because they would not budge from the processing fee.

You math is exactly why, if you tack on 200+ maco to a 1200 deal then it is not a 1500-1600 deal and some other dealer could have done better.
 
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