Is the vehicle documentation fee a “taking of money?” NJ does not limit these car dealer fees like some other states.
Buying a car can be quite a painful process.
Even if you ignore the ongoing supply chain shortage that has driven higher prices for new and used cars, one charge is still an insult at the end: documentation fees.
The so-called “documentation fees” include the dealer’s fee to prepare contracts and other documents required for a sale. You can see more details of what’s included here.
In New Jersey, there is no limit to what car dealerships can charge for documentation fees. Indeed, you will see different loads from different dealerships across the state, even from the same brand name company.
This costly issue caught Bamboozled’s attention when a reader, who asked to remain anonymous, shared their experiences. He said he’s bought a variety of cars over the years and his doc fees still run into the hundreds, ranging from $299 for a Chevy to $799 for a used Ferrari.
“The cars are quite expensive, not to mention adding $400 to $800 to the price of the car,” he said. “It’s simply a scam and always has been a scam.”
His passion for costs was renewed when recently his son, who lives in New York, where the medical expense limit was recently raised to $175 from $75, couldn’t find the car he wanted. in this state. He did, however, find one in New Jersey and was charged a $799 doc fee.
“Just a simple cash grab,” he said.
THE LAW IN NEW JERSEY
Dealers can charge whatever they want for documentation fees as long as the fees are disclosed.
New Jersey law only requires documentation fees to be listed separately from fees collected by the dealer for Motor Vehicle Commission (MVC) transactions, including for temporary tags, registration, plates, and fees. title. These need to be detailed, said MVC spokesperson William Connolly.
The average doc fee in New Jersey is $531.91, according to data from TrueCar.com. Heavy, but not as bad as the highest in the country: Florida, which has an average fee of $833.56. The lowest is California, where they are capped at $82.
So why is New Jersey one of the states that does not impose limits to protect consumers?
We tried to ask some legislators why, but none responded to our requests.
A search of proposed laws in the state turned up no bills to limit doc fees as early as 1988.
By the way, since 1998, when the first registrations of the year are available, the New Jersey Coalition of Automotive Retailers (NJCAR), which lobbies on behalf of the industry, has made over $3.6 million in contributions from campaign to state lawmakers, according to data from the state’s Election Law Enforcement Commission (ELEC). The preliminary amount for the first three quarters of 2021 was $103,000, he said.
It’s not a simple question, said Matthew Hale, an associate professor in the Department of Political Science and Public Affairs at Seton Hall University. He noted that parking lots are a huge source of tax revenue for municipalities.
“I think one of the reasons you don’t see state legislators addressing this issue is that they recognize that for many municipalities having a parking lot is a very big source of tariffs compared to a retail business. ordinary,” he said.
It may be true. But car buyers, who are also taxpayers, might disagree with this logic.
“I’m sure most motorists would be interested in minimizing their costs regarding these fees, but any regulation needs to understand the issues before offering a specific solution,” said Steve Carrellas, director of government and public affairs for the New Jersey chapter. of the National Automobile Association. “The first thing is to define what document fees are. Part of the fee goes into the cost of things that dealers have to pay directly so they are able to cover their costs.
Okay. We’re not suggesting dealerships do this for free or even for California’s $82 fee, but $400? $500? $800? It is difficult to imagine that these are the real costs to be disbursed.
James Brian Appleton, president of NJCAR, argues that the state does not regulate professional service fees charged by lawyers, accountants, doctors, building contractors, barbers, nail salons or any of dozens other regulated professions serving the public.
“Anyone who has ever purchased or leased a vehicle knows the mountain of documentation required by regulators and funding sources,” he said. “The professional services provided by dealerships save consumers valuable time and spare new and used car buyers the aggravation of having to phone or wait in line to complete these necessary administrative tasks.”
“Government mandate caps on documentation fees will inevitably force dealers to charge higher prices for the cars they sell in order to cover costs and get a fair return on investment,” Appleton said.
Appleton said one of the benefits of a free market is that consumers can shop around for their best deal. Regulations requiring doc fee disclosure give buyers “plenty of opportunities to shop around and get the best price on the vehicle they want and the doc fee they will pay,” he said. declared.
Until and unless there are regulations capping charges, consumers will have to negotiate lower costs when buying a car.
Before you even start negotiating for a specific vehicle, you can shop around and select a dealership with lower application fees. Note that two dealerships selling the same brands can have very different fees.
And be creative. If the dealer refuses to lower the fee, they may make up the difference with a lower selling price on the car.
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