California Car Fee Hike

New Doc Fees: A Hit to Californians?

There’s some chatter going around about new car doc fees in California, and it’s causing a bit of a stir. The state Senate passed legislation allowing car dealers to charge up to 1% of a vehicle’s purchase price in document processing fees, capping at $500. Now, to give a sense of the jump, this is a stark increase from the current $85 cap. Just think about this: the average new car price in May was around $48,656. So, these new fees are no small change (Cox Automotive).

Backing the bill is the California New Car Dealers Association, arguing the new fee structure helps them keep up with soaring business costs, something that $85 just doesn’t cover anymore. The paperwork pile-up includes loan documents, fraud protection forms, and DMV registration. Anthony Samson, lobbying for the dealers, remarked in April, “Sure, if we could just bake these costs into the car prices, we wouldn’t need this bill,” he told Cal Matters.

Skepticism Lingers

Not everyone’s buying into this idea, though. Senator Dave Cortese is already talking about negotiating a lower fee. On the flip side, Senator Henry Stern stood as the lone voice against the bill, convinced this move undermines California’s consumer and environmental protections. He’s not wrong to be cautious, considering how the car industry’s lobbying might has shaken past legislation such as the EV mandates.

Public’s Perspective

Taking a cue from car-buyers’ perspectives, some folks are pretty vocal about it. Senator Henry Stern put it this way, “The car dealers haven’t earned the trust to justify this major increase in junk fees,” going on to say more about how this plays right into that old idea that anyone with enough cash can sway political decisions in America. Ray Shefska from CarEdge didn’t hold back either, adding, “If affordability is the game, helping dealers doesn’t seem like the best play.” Digital Democracy reports that dealers have contributed nearly $2.9 million into political pockets since 2015.

California’s already a pricey place to snag a set of wheels with the highest sales tax rate at 7.25% and eye-watering registration fees. The document processing fee legislation came amidst this backdrop as dealers relied on incentives to keep profits steady, dodging a direct jump in vehicle prices after Trump’s tariffs. Interestingly, state-purchased vehicles sidestep these docs fees altogether—go figure.

What Next?

Let’s see how this plays out. The House Assembly is supposed to weigh in on these dealer fees next. If they give it the green light as is, it could end up on Governor Newsom’s desk for a final call. There’s a chance he might strike it down if the fee feels too steep, considering states like Florida set their fee cap at $999, while Virginia and Colorado clock in at $799 and $699, respectively. It’s a hot topic, and the final word’s yet to come.