A word on doc. (Documentation) Fees....
The correct answer to the thread question is...."most states have a cap to how much a dealer can charge for miscellanious fee's. And dealer's are well aware of that cap." I am sure it is different for every state. Hope the other dealers on the forum will chime in here......
I charge a $25 doc. fee, which includes the title application fee. In our state you pay your tax, title , and license on your own. Keep in mind that you would have to pay for the title application at the state anyway. I think that is around $10.00
I feel that a small fee of $25 should be charged on any car deal, whether the car is financed or not. I think over $100 is excessive, but not 25-50.
Finance makes their money from the bank, sort of a kick back for signing up a customer. Usually salesmen get a small kickback as well. At my dealership the kickback for financing a deal is $25 to the salesman. So the I don't think the doc fee should pay the finance dept.
Just tossing out random thoughts here, but the shop charges $58/hr, and I know that it takes our ladies in the office some time to finish up sending things off to the proper places, making sure middle initials are in certain spots, etc....
that being said, yes it is all profit. It doesn't go into the profit I split with the dealership(commission base), but it is profit none the less. But why would I just add it into the price of the car, as someone suggested? Just as much of a gimmick IMO. that's like saying I will throw in ten free gallons of gas, and just adding $30.00 to the invoice. Senseless to add the doc. fee anywhere but right out front, usually when quoting the price...
"Mr. Becker, looks like only $23,580, plus our paperwork fee." .......
And why should a dealer have to eat that? Did you know that a dealer has to pay interest on every vehicle on his lot? Some of them he looses alot of money to sell, should he charge you that? Should he drop his advertising costs if you order the car, since he won't have it sitting around on his lot? Between the cars that sell right away and the cars that sit around, a dealer really just hopes to break even on the interest.