Watching out for car dealership fees

Seven On Your Side
May 5, 2008 4:39:47 PM PDT
They're little fees that can add up to big bucks when you buy a car. And if you don't know the rules, a dealer can tack on hundreds to your bill. What should you know? Seven on your Side has the info to fight fees. Ayaz Soomru loves his new ride, but is furious about extra fees charged by the dealer.

"I think they are ripping off anybody whoever doesn't know about these fees," says Amal.

In January, Ayaz bought his beamer from Pepmore Auto Sales. but later he realized they charged him hundreds extra in fees.

Documents show he paid a document fee of nearly $400, license and title of $200, and a finance fee of nearly $700.

Eyewitness News' Tappy Phillips went to Pepmore and talked to a salesman.

Phillips asks, "He didn't finance with you, he got his own finance with you he got his own financing." After two days he told me he would finance for himself, and I think I told him I definitely need to charge $695 on it,said the salesman.

Pepmore never justified the fee but said since Ayaz signed the agreement, they wouldn't refund it.

A pre-printed finance fee was something, one expert had never seen before.

"There's two issues. one it's they're charging something to increase their profits the other is that it shouldn't have been preprinted that's definately a violation," said Mark Schienberg.

Pepmore said the $400 document fee was really for detailing Ayaz's car. We notified the DMV who started investigating this deal. They will even audit Pepmore's past deals to look for previous overcharges.

Experts say to question every added fee on a car contract and if you aren't satisfied, go to another dealer.

For information on what fees are allowed by law, see below:


Document fee:

This refers to the fee charged by the dealer for submitting the application for registration and title to DMV; see 78.19(2) below. If the dealer issued plates to the vehicle, or there is a lien to be filed, the dealer must submit the paperwork and can charge the fee. If the dealer did neither of those things he may still submit the paperwork, and can charge a fee, but there must also be a disclaimer indicating the fee can be avoided if the consumer applies for registration and title themselves. In addition, the dealer must disclose that this is not a DMV fee.

78.19(2) Such a dealer may charge a person who purchases a vehicle from such dealer a fee for assisting in securing a registration and/or certificate of title for such vehicle, provided the dealer actually performs the service of filing the application for title and/or registration with the Commissioner of Motor Vehicles or his issuing agent. The fee charged by the dealer may not exceed $45. Such fee does not include the fee required to be paid to the Department of Motor Vehicles for issuance of the registration or for issuance of a certificate of title, nor shall such fee include the fee charged for the motor vehicle inspection of the vehicle. (Amended 2/11/04)

*The optional dealer registration or title application processing fee ($45.00 maximum) and special plate processing fee ($5.00 maximum) are not New York State or Department of Motor Vehicles fees. Unless a lien is being recorded or the dealer issued number plates, you may submit your own application for registration and/or certificate of title or for a special or distinctive plate to any motor vehicle issuing office. (Amended 2/11/04)

License and title fees:

These are the fees paid to DMV, by the dealer or consumer, for registration and title. The dealer can estimate these fees but the Law requires the dealer refund any overages to the consumer.

Financing fees:

These are generally application fees paid to a finance company/broker as part of the application process, approved or not.

Inspection fees:

The dealer can pass the cost of an inspection on the vehicle purchaser. ($37 for used / $10 for new car)

There are additional fees required/allowed by other governmental agencies such as a tire disposal fee ($2.50 per tire) required by DEC in some instances.